The issue before us is whether three rear dump trucks sold by appellee to Big Rock Stone & Material Co. are subject to our sales tax act. The chancellor enjoined the imposition of the tax, finding that the trucks were used directly in the manufacturing process of the purchaser. Appellant contends that the trucks are not so used and that in fact they are transportation equipment which is not included in the exemption provisions.
Big Rock is engaged in the extraction and processing of stone from a quarry site in Little Rock. The stone is blasted from the face to the floor of the quarry and loaded by crane into these rear dump trucks. The loaded trucks are driven around a ridge a distance of three-quarters of a mile to the primary crusher. At all times the trucks travel on the private property of Big Rock. The load of rock is dumped into the primary crusher and the truck returns for another load.
From the primary crusher the stone is 'conveyed along a vibrating chute which screens out all stone less than four inches in size. These small pieces, consisting of one percent of the quarry sales, find their way to bins from which they are sold as “four-inch base”. The larger pieces go to a secondary crusher. From there the material is transferred by overhead conveyors and stock piled. It then is passed through a third crusher, through a transfer point, and then to the finishing mill where it is washed and screened to size; The finishing mill produces some seven different stone products. Some of the stone is loaded into railroad cars under the mill and some is loaded into trucks from a chute under the mill.
The applicable exemption provisions are found in Ark. Stat. Ann. § 84-1904 (r) (Supp. 1971):
(2) Gross receipts or gross proceeds derived from the sale of tangible personal property consisting of machinery and equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in the State of Arkansas, but only to the extent that such machinery and equipment is purchased and used for the purposes set forth in this subsection.
(C) It is the intent of this subsection to exempt only such machinery and equipment as shall be utilized directly in the actual manufacturing or processing operation at any time from the initial stage where actual manufacturing or processing begins through the completion of the finished article of commerce and the packaging of the finished end product. The term “directly” as used in this Act is to limit the exemption to only the machinery and equipment used in actual production during processing, fabricating or assembling raw materials or semi-finished materials into the form in which such personal property is to be sold in the commercial market. Hand tools, buildings, transportation equipment, office machines and equipment, machinery and equipment used in administrative, accounting, sales or other such activities of the business involved and all other machinery and equipment not directly used in the manufacturing or processing operation are not included or classified as exempt.
(E) For the purposes of this subsection, the terms “manufacturing” and/or “processing”, as used herein, refer to and include those operations commonly understood within their ordinary meaning and shall also include mining, quarrying, refining, extracting oil and gas, cotton ginning, and the drying of rice, soy beans and other grains.
The taxpayer carries a rather heavy burden to establish a right to the claimed exemption. “As stated, this court has consistently held that the burden is on the taxpayer to establish clearly that the legislature intended the claimed exemption since taxation is the rule and exemption is the exception. An exemption cannot be implied.” Cheney, Comm’r. v. Georgia-Pacific Corp., 237 Ark. 161, 371 S.W. 2d 843 (1963). In Wiseman v. Madison Cadillac Co., 191 Ark. 1021, 88 S.W. 2d 1007 (1935) we said the burden is on the claimant “to establish clearly his right to exemption”. In Peterson Produce Co. v. Cheney, Comm’r., 237 Ark. 600, 374 S.W. 2d 809 (1964) we said: “Let it also be remembered that a tax exemption must be strictly construed, ‘and to doubt is to deny exemption’ ”. Most of the recited principles were reiterated in Hervey, Comm’r. v. Tyson’s Foods, Inc., 252 Ark. 703, 480 S.W. 2d 592 (1972).
We have no Arkansas case in which trucks carrying materials from the blasting area to the first crusher operation have been claimed as an exemption. The nearest case in point is Cheney, Comm’.r. v. Georgia-Pacific, supra. There it was held that a towmotor and carrier used to -transport materials between processes in the plant were not exempt. We said the item was removed from exemption by the last paragraph of Ark. Stat. Ann. § 84-3106 (Supp. 1961). That provision as amended is now included in Ark. Stat. Ann. § 84-1904 (r) (2) (C) (Supp. 1971), the last sentence of which is very similar to the repealed section above cited and reads: “Hand tools, buildings, transportador! equipment, office machines and equipment, machinery and equipment used in administrative, accounting, sales or other such activities of the business involved and all other machinery and equipment not directly used in the manufacturing or processing operation are not included or classified as exempt”.
Appellant and appellee cite several cases from other jurisdictions which are persuasive but far from conclusive. In the first place, we are unable to find where any of those jurisdictions have statutes identical with ours. In the second place, we have not one, but three sections, of the statutes which must be harmonized to find the legislative intent. In the third place, the cited cases do not tell us whether those jurisdictions follow our rules of evidence governing the burden of proof, strict construction, and resolution of doubt, all of which have heretofore been recited in this opinion.
The cited sections of the applicable law emphasize that to be exempt the machinery must be used directly in the manufacturing process. Section 84-1904 (r) (2) (C) tells us that to be exempt the machinery must be used directly in manufacturing and must be utilized “from the initial stage where actual manufacturing or processing begins...” The same section excludes transportation equipment from exemption. Section 84-1904 (r) (2) (E) says the terms “manufacturing” and “processing” shall include those operations commonly understood to be such within their ordinary meaning.
We hold that the recited statutes, considered in their entirety, leave substantial doubt that the trucks are exempt from the tax.
Reversed and remanded with directions to enter judgment consistent with our conclusion.
Harris, C.J., and Fogleman, J., dissent.