Fruit Growers Supply Co. v. Commissioner
United States Board of Tax Appeals
1. A corporation which acts as purchasing agent for the purpose of purchasing supplies for the members of a cooperative association at cost, but at the same time carries on a substantial amount of business with nonmembers at a profit, is not exempt from taxation under the provisions of section 231(11) of the Revenue Act of 1921. 2. Where a corporation of the character referred to above pays patronage dividends to its members on the basis of purchases made for such members,…
Read the full summary
1. A corporation which acts as purchasing agent for the purpose of purchasing supplies for the members of a cooperative association at cost, but at the same time carries on a substantial amount of business with nonmembers at a profit, is not exempt from taxation under the provisions of section 231(11) of the Revenue Act of 1921. 2. Where a corporation of the character referred to above pays patronage dividends to its members on the basis of purchases made for such members, such dividends which are paid out of profits from nonmember business may not be considered a reduction of the cost of the…
1Opinion of the Court
*323OPINION.
Sea well :
The primary question here presented is whether the petitioner is exempt from taxation under the provisions of section 231 (11) of the Revenue Acts of 1918 and 1921. In its brief, the petitioner admits (and we think properly so) that the Revenue Act of 1918 does not include corporations which act as purchasing agents among those exempt from taxation under its provisions, and therefore the petitioner can not be considered exempt for 1919 and 1920. This leaves for consideration the applicability of section 231 (11) of the Revenue Act of 1921, which reads as follows:
Sec. 231.…
2Cited by26 opinions
- Farmers Cooperative Co. v. BirminghamDistrict Court, N.D. Iowa · 1949
- Union Equity Cooperative Exchange v. CommissionerUnited States Tax Court · 1972
- Consumer-Farmer Milk Cooperative, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1950
- Puget Sound Plywood, Inc. v. CommissionerUnited States Tax Court · 1965
- Farmers Cooperative Co. v. CommissionerUnited States Tax Court · 1959
21 more not listed; retrieve them via the Exa API.