Northville Dock Corp. v. Commissioner
United States Tax Court
Petitioner placed two new oil storage tanks (number 413 and number 212) in service during the taxable year. Tank number 413 was used to blend No. 2 oil with No. 6 oil to produce No. 4 oil. Tank number 212 stored No. 2 oil, and in connection therewith was used substantially, but not necessarily predominantly, for storing oil owned by oil refineries. Held: Both tanks qualify for the investment credit under secs. 38 and 46 of the Code.
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Petitioner placed two new oil storage tanks (number 413 and number 212) in service during the taxable year. Tank number 413 was used to blend No. 2 oil with No. 6 oil to produce No. 4 oil. Tank number 212 stored No. 2 oil, and in connection therewith was used substantially, but not necessarily predominantly, for storing oil owned by oil refineries. Held: Both tanks qualify for the investment credit under secs. 38 and 46 of the Code. Both were used respectively as an integral part of and in connection with a manufacturing or production activity during their first year in service. Revenue…
1Opinion of the Court
OPINION
Under sections 38 and 46 of the Code,2 a taxpayer is allowed as a credit against the income tax, a specified percentage of the cost basis of qualified property which has been placed in service during the taxable year. The qualified property is called “section 38 property” and is defined in section 48 of the Code.3 It is petitioner’s position that two oil storage tanks, numbers 212 and 413 purchased by it in 1963, qualified as section 38 property and that it properly deducted $20,444.85 as an investment credit on its income tax return for the year ended June 30, 1964.
Respondent’s…
2Cases cited3 opinions
- Murphy v. ArnsonSupreme Court of the United States · 1878
- Schuyler Grain Co. v. CommissionerUnited States Tax Court · 1968
- Dixon v. CommissionerUnited States Tax Court · 1973
3Cited by29 opinions
- World Airways, Inc. v. CommissionerUnited States Tax Court · 1974
- Lykes Bros. Steamship v. United StatesUnited States Court of Claims · 1975
- Minot Federal Savings & Loan Assn. v. United StatesCourt of Appeals for the Eighth Circuit · 1970
- Central Citrus Co. v. CommissionerUnited States Tax Court · 1972
- United Telecommunications, Inc. v. CommissionerUnited States Tax Court · 1975
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