The Tennessee use tax exemption for industrial machinery does not cover the catalysts used by a chemical manufacturer in its manufacturing process. In a recent case, a manufacturer paid use tax from 1995 – 1997 and sought a refund for those tax years. The Department denied their claim, so the manufacturer filed suit, where the court determined a refund of $1.25 million was due to the manufacturer. The Department appealed and the Tennessee Court of Appeals found that the catalysts do not qualify for the exemption and the tax was in fact due to the state. (Eastman Chemical Company v. Loren L. Chumley, No. 99-2327-III, Filed January 12, 2004)