Beruflich Dokumente
Kultur Dokumente
161
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162
Same; Gross selling price does not include the sales tax billed
as a separate item.—lf a manufacturer, producer, or importer, in
fixing the gross selling price of an article sold by him, has
included an amount intended to cover the sales tax in the gross
selling price of the articles, the sales tax should be based on the
gross selling price less the amount intended to cover the tax, if the
same is billed as a separate item. Unless billed to the purchaser
as a separate item in the invoice, the amounts intended to cover
the sales tax shall be considered as part of the gross selling price
of the articles sold, and deduction thereof will not be allowed.
163
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165
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166
167
168
169
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exactly the same price and under the same terms as had
been previously agreed upon between the corporation and
the Fines.
The return filed by the Court Holding Co. with the
respondent Commissioner of Internal Revenue reported no
taxable gain as having been received from the sale of its
assets. The Millers, of course, reported a long term capital
gain on the exchange of their corporate stock with the
corporate property. The Commissioner of Internal Revenue
contended that the liquidating dividend to stockholders had
no purpose other than that of tax avoidance and that,
therefore, the sale by the Millers to the Fines of the
corporation's property was in substance a sale by the
corporation itself, for which the corporation is subject to the
taxable profit thereon. In requiring the corporation to pay
the taxable profit on account of the sale, the Commissioner
of Internal Revenue, imposed a surcharge of 25% for
delinquency, plus an additional surcharge as fraud
penalties.
The U. S. Court of Tax Appeals held that the sale by the
Millers was for no other purpose than to avoid the tax and
was, in substance, a sale by the Court Holding Co., and
that, therefore, the said corporation should be liable for the
assessed taxable profit thereon. The Court of Tax Appeals
also sustained the Commissioner of Internal Revenue on
the delinquency penalty of 25%. However, the Court of Tax
Appeals disapproved the fraud penalties. holding that an
attempt to avoid a tax does not necessarily establish fraud;
that it is a settled principle that a taxpayer may diminish
his tax liability by means which the law permits; that if the
petitioner,the Court Holding Co., was of the opinion that
the method by which it attempted to effect the sale in
question was legally sufficient to avoid the imposition of a
tax upon it, its adoption of that method is not subject to
censure; and that in taking a position with respect to a
question of law, the substance of which
179
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181
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cedure would in certain cases elevate the bracket under which the
tax is based. The late payment is already penalized, thru the
imposition of surcharges, by adopting the theory of the Collector,
we will be creating an additional penalty not contemplated by
law."
Decision modified.
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