Noble v. Commissioner
United States Tax Court
Petitioner's businesses were located in Brentwood, Tenn. Brentwood built a new sewer system and enacted an ordinance requiring petitioner to disconnect his private sewage treatment plant, hook up to the new system, and pay the City a one-time "tap fee" to help cover the capital cost of the system, and a monthly service charge to help cover Brentwood's operating expenses. Held: The "tap fee" was a special assessment for an improvement benefiting petitioner's property.
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Petitioner's businesses were located in Brentwood, Tenn. Brentwood built a new sewer system and enacted an ordinance requiring petitioner to disconnect his private sewage treatment plant, hook up to the new system, and pay the City a one-time "tap fee" to help cover the capital cost of the system, and a monthly service charge to help cover Brentwood's operating expenses. Held: The "tap fee" was a special assessment for an improvement benefiting petitioner's property. It was a capital expenditure. It was not deductible as a tax or business expense. Held, further, the intangible asset (use of…
1Opinion of the Court
Hall, Judge:
Respondent determined a deficiency of $2,620.69 in petitioners’ income tax for 1973. Due to concessions by both parties, the sole issue for decision is the tax treatment of a sewer tap fee paid by petitioners to the City of Brentwood, Tenn., in 1973. Specifically, the questions presented are:(1) Whether petitioners’ sewer tap fee paid to the City of Brentwood is a nondeductible tax for local improvements within the meaning of section 164(c)(1);1(2) Whether petitioners’ sewer tap fee is an ordinary and necessary business expense, or a capital expense; and(3) Whether petitioners’…
2Cases cited9 opinions
- United States v. ScovilSupreme Court of the United States · 1955
- Abraham Teitelbaum v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1961
- Woolrich Woolen Mills v. United StatesCourt of Appeals for the Third Circuit · 1961
- Badger Pipe Line Company v. The United StatesUnited States Court of Claims · 1968
- Lee Wilson & Co. v. CommissionerUnited States Board of Tax Appeals · 1932
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3Cited by3 opinions
- Estate of Klosterman v. CommissionerUnited States Tax Court · 1992
- Estate of Klosterman v. CommissionerUnited States Tax Court · 1992
- Noble v. CommissionerUnited States Tax Court · 1978