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tangible personal property” for the purpose of Indiana Code § 6-2.5-5-5.1 (the consumption exemption).1

For the reasons stated below, the Court GRANTS Interstate’s motion for summary judgment and DENIES the Department’s cross motion for summary judgment.


Interstate is an Indiana corporation that operates two refrigerated warehouse facilities in Indiana – one in Indianapolis and the other in Lafayette.  Food manufacturers and retailers, such as Kroger, Marsh, and Nabisco, deliver frozen agricultural goods to Interstate’s warehouses, where Interstate provides refrigerated storage areas to them.  Interstate produces the conditioned air that is used in the refrigerated storage areas by chilling ammonia to –20° Fahrenheit using electrical compressors, refrigerant condensers, expansion valves, and evaporators.  Chilling ammonia to that temperature changes it from a gas to a liquid.2  The conversion of the gas ammonia to a liquid transforms the ammonia so that it is capable of cooling and conditioning the air in its customers’ storage units.  

The chilled ammonia is circulated through a closed loop cooling distribution

1    Interstate also argued that it is entitled to an exemption of sales tax under Indiana Code § 6-2.5-4-5.  (Pet’r Br. at 12-17.)  Because this Court finds that Interstate is entitled to an exemption of sales tax under Indiana Code § 6-2.5-5-5.1, the Court will not address this other issue.  See infra.

2    In its brief, Interstate states that the chilling of the ammonia changes it from a liquid to a gas.  (Pet’r Br. at 3.)  However, Interstate’s designated evidence in support of its motion for summary judgment states that the ammonia is transformed from a gas into a liquid during the chilling process.  (Pet’r Supplemental Affidavit of John V. Tippman, Sr. at 1.)  The Court notes that Interstate’s designated evidence is correct because chilling the ammonia refrigerant would change it from a gas into a liquid.  See Michael J. Moran & Howard N. Shapiro, Fundamentals of Engineering Thermodynamics 514-19 (4th ed. 2000).

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