Standard Knitting Mills v. Commissioner
United States Board of Tax Appeals
The petitioner spun yarn from baled lint cotton; also purchased cotton yarn. The two classes of yarn were commingled by it in further processing, first into cloth and then into garments, which it sold.
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The petitioner spun yarn from baled lint cotton; also purchased cotton yarn. The two classes of yarn were commingled by it in further processing, first into cloth and then into garments, which it sold. Held: (1) That in making the marginal computations under section 501(e)(2) of the Revenue Act of 1936 to determine the extent, if any, to which petitioner shifted to others the processing taxes imposed upon it in 1935 but not paid, there should be included as the "selling price" of "articles with respect to which such Federal excise tax was imposed" the entire amount for which the garments,…
1Opinion of the Court
*302OPINION.
Disney:
Section 501 (a) (1), Revenue Act of 1936,1 provides wbat is known as the “unjust enrichment tax”, being 80 percent of net income of every person “from the sale of articles with respect to which a Federal excise tax was imposed on such person but not paid.” Two limitations are, so far as here material, set on the amount subject to tax: (1) It shall not exceed the amount attributable to shifting the tax to others, and (2) it shall not exceed net income for the entire taxable year from sale of the articles with respect to which the excise tax was imposed. Section 501 (e) (2)2…
2Cited by10 opinions
- Standard Knitting Mills, Inc. v. CommissionerCourt of Appeals for the Sixth Circuit · 1944
- Taylor v. CommissionerUnited States Tax Court · 1987
- Barnette v. CommissionerUnited States Tax Court · 1992
- Louisville Provision Co. v. CommissionerUnited States Tax Court · 1943
- Dependable Packing Co. v. CommissionerUnited States Tax Court · 1945
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