A zinc refining facility was held liable for Illinois use tax on its out-of-state purchases of metallurgical coke for use in the refining process. The taxpayer argued that the purchases qualified as exempt machinery and equipment used in the manufacturing process. Specifically, the taxpayer argued that the purchases qualified for the “chemical exemption” found in the state’s manufacturing machinery and equipment exemption. The pertinent tax law states that “Equipment includes chemicals or chemicals acting as catalysts but only if the chemicals or chemicals acting as catalysts effect a direct and immediate change upon a product being manufactured or assembled for wholesale or retail sale or lease.” The taxpayer argued that the chemical coke effected “a direct and immediate change” on the zinc and iron products during a process known as the “Waelzing process.” A tax tribunal had previously concluded that the coke did not qualify for the manufacturing exemption because, in the Waelzing process, the coke does not affect a direct and immediate change upon the product being manufactured. Additionally, the tax tribunal found that the taxpayer was attempting to collapse and conflate all steps within the Waelzing process into one continuous and singular chemical reaction and concluded that doing so would render the language “direct and immediate” meaningless and would allow any chemical that is used in the manufacturing process to qualify for the exemption. The Illinois Supreme Court agreed with the tax tribunal’s determination. Accordingly, the taxpayer was held liable for Illinois use tax on its out-of-state purchases of metallurgical coke. (Horsehead Corporation v. The Department of Revenue, Illinois Supreme Court, No. 124155, November 21, 2019)