The Kansas Court of Appeals has upheld sales and use taxes for oilfield machinery and equipment.

In a decision handed down Friday, the state appellate court affirmed an earlier decision by the Kansas Court of Tax Appeals. The tax court that denied oil and gas producers an exemption on down-hole machinery and equipment and surface pumping equipment.

The court concluded that such equipment is not an integral part of production operations by a processing plant and therefore not eligible for the exemption.

The decision comes in the lawsuit filed by Edmiston Oil Co. and other oil and gas producers.