PROVIDENCE — A ship sets sail from Rhode Island — north to Nova Scotia, south to Puerto Rico or due east to an unidentified location some 300 miles offshore.

Its mission: secrecy-enshrouded work, under government contract, involving submarines.

Is this the plot for a new thriller?

No. Just one piece of a complex tax case that was decided last month by a Providence court.

The case also offered a glimpse into the sort of work done in Rhode Island by defense industry giant Raytheon Co., of Waltham, Mass.

At issue was the company’s bid for a refund of more than $400,000 in sales and use tax.

Raytheon said it paid $414,153 in those taxes to Rhode Island for materials the company had used in connection with U.S. Department of Defense contracts at the company’s plant in Portsmouth.

Raytheon asked the state Division of Taxation for a refund, but the agency refused. The company then appealed to Sixth Division District Court in Providence.

Judge Walter Gorman rejected Raytheon’s appeal. “The court is not persuaded that [Raytheon] is entitled to relief . . . ,” he wrote in his 49-page opinion on April 10.

A spokesman for Raytheon declined to comment on the decision, saying, “We don’t comment on litigation.”

State Tax Administrator David M. Sullivan said, “The court issued a very detailed, well reasoned and comprehensive decision. The Division of Taxation was pleased that our position was upheld.”

The case stems from a routine audit that the state tax agency conducted at Raytheon’s operation in Portsmouth.

The audit, which took nearly three years, resulted in a determination that Raytheon owed sales and use tax to Rhode Island for items the company bought and used for its work on government contracts, principally for the Navy.

Raytheon argued, among other things, that the items were exempt from the sales tax because they were used for research and development.

The state argued — and the court agreed — that the exemption applies only if there is an element of risk associated with the work.

In Raytheon’s case, there was no risk associated with its work, because the activities that the company performed “were merely the execution of a contract that incorporates detailed specifications,” according to Gorman’s opinion.

Raytheon also contended that items it bought were exempt from state sales tax because they were purchased for resale to the government.

Those items included copier supplies, toilet paper, coffee cups, a magazine subscription, jewelry, catering charges and electricity, according to court documents.

But Gorman said, “If Raytheon’s interpretation of the contracts and the statute is adopted, the purchase of millions of dollars of materials would not be subject to a sales or use tax at any time because the taxpayer’s ‘resale’ to the government would not be a taxable event.”

The government contracts covering Raytheon’s Rhode Island operations “required the company to design and fabricate sophisticated electronic devices,” Gorman wrote.

Over a four-year period, Raytheon bought materials on more than 1,200 occasions, paying more than $414,000 in sales taxes, without notifying the seller that the items were to be resold, Gorman said in his decision.

Another issue involved about $5,000 in tax (and interest) that the state said the company owed for the purchase of fuel to power Subsig II, a vessel owned by Raytheon and leased to the Navy.

Two of the leases were with the Military Sea Lift Command; the other two were through the Electric Boat shipyard unit of General Dynamics Corp., which runs a yards in North Kingstown and Groton, Conn.

The 120-foot vessel was equipped to conduct research at sea, but it was also used to support and test submarine operations.

Its crew was made up of Raytheon employees, but government officers aboard the ship “basically [directed] the entire show. They would tell us when to depart, where to run, what tasks to perform, and when to return to port,” according to a court transcript quoting Raytheon employees.

The vessel traveled from Rhode Island as far north as Nova Scotia and as far south as Puerto Rico, according to court documents.

At times, the vessel traveled up to 300 miles offshore. Always, the Subsig II departed from and returned to Rhode Island. The length of voyages varied from one day to a month.

Gorman said that state tax in this regard was properly applied.

ndowning@projo.com