McNamara v. Stauffer Chemical Co.; City of Baton Rouge and Parish of East Baton Rouge, et al. v. Stauffer Chemical Co.

506 So. 2d 1252 (1st Cir. 1987) · Court of Appeal of Louisiana, First Circuit · April 14, 1987 · No. Nos. 86 CA 0822, 86 CA 0823

Summary

The Louisiana Court of Appeal, First Circuit, held that Stauffer Chemical Company's process of regenerating customers' spent sulfuric acid constituted a taxable repair service under Louisiana's sales-tax statute and applicable local ordinances. The court also rejected application of the further-processing exclusion to sulfuric acid used to transport oleum, upheld a $50,000 attorney-fee award, and affirmed the trial court's judgments. A dissent argued that treating the chemical regeneration process as a repair impermissibly expanded the taxing statute.

Holdings

  1. Stauffer's restoration of spent sulfuric acid to a usable condition constituted the furnishing of repairs to tangible personal property and was taxable as a service under LSA-R.S. 47:301(14)(g) and the corresponding local ordinances.
  2. The sulfuric acid was tangible personal property because it was corporeal movable property under Louisiana law.
  3. The reprocessing or further-processing exclusion did not apply because the restored sulfuric acid did not become part of the customers' final products.
  4. The $50,000 attorney-fee award was reasonable and was not manifestly erroneous or clearly wrong.

Questions Presented

  1. Whether Stauffer's regeneration of spent sulfuric acid constituted a taxable repair service under LSA-R.S. 47:301(14)(g) and the corresponding local ordinances.
  2. Whether the customers' sulfuric acid was tangible personal property subject to the repair-service tax.
  3. Whether the reprocessing or further-processing exclusion in LSA-R.S. 47:301(10) applied to the oleum or fuming sulfuric acid transactions.
  4. Whether the $50,000 attorney-fee award was excessive or unreasonable under LSA-R.S. 47:1512 and the corresponding local ordinance.

Disposition

affirmed

Cases Cited (10)

  • City of Baton Rouge v. Stauffer Chemical Co., 500 So. 2d 397 (La. 1987)(followed)
  • Graeme Spring and Brake Service v. De Felice, 98 So. 2d 314 (La. App. 1957)(followed)
  • Exxon Corp. v. Traigle, 353 So. 2d 314 (La. App. 1st Cir. 1977), writ denied, 354 So. 2d 1385 (La. 1978)(followed)
  • St. John the Baptist Parish School Board v. Marbury-Pattilo Construction Co., 254 So. 2d 607 (La. 1971)(followed)
  • American Sign and Indicator Corp. v. City of Lake Charles, 320 So. 2d 234 (La. App. 3d Cir. 1975)(followed)
  • Traigle v. PPG Industries, Inc., 332 So. 2d 777 (La. 1976)(followed)
  • McNamara v. Oilfield Construction Co., Inc., 417 So. 2d 1311 (La. App. 3d Cir. 1982), writ denied, 422 So. 2d 157 (La. 1982)(followed)
  • Arceneaux v. Domingue, 365 So. 2d 1330 (La. 1978)(followed)
  • Hibernia National Bank v. Louisiana Tax Commission, 196 So. 15 (La. 1940)(distinguished_from)
  • South Central Bell Telephone Co. v. Traigle, 357 So. 2d 610 (La. App. 1st Cir. 1978), rev'd on other grounds, 367 So. 2d 1143 (La. 1978)(distinguished_from)

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