Bailey v. Commissioner
United States Tax Court
Ps purchased two boats (one in 1979 and the other in 1980) for business purposes. They paid California State sales taxes in connection with such purchases, and claimed deductions for such taxes. Respondent denied the deductions, contending that the incidence of the California sales tax falls on the retailer, not the consumer, and therefore such taxes must be capitalized as part of the cost of the boats.
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Ps purchased two boats (one in 1979 and the other in 1980) for business purposes. They paid California State sales taxes in connection with such purchases, and claimed deductions for such taxes. Respondent denied the deductions, contending that the incidence of the California sales tax falls on the retailer, not the consumer, and therefore such taxes must be capitalized as part of the cost of the boats. Held, the California State sales tax is a tax imposed upon the consumer (United States v. California State Board of Equalization), 650 F.2d 1127 (9th Cir. 1981), affd. 456 U.S. 901 (1982),…
1Opinion of the Court
JACOBS, Judge:
Respondent determined the following deficiencies in income tax and additions to tax:
Petitioners Year Deficiency Additions to tax sec. 6653(a)1
Walter and Mary Bailey 1976 $954 $48
1977 1,472 74
1979 2,436 122
1980 • 693 35
Fidel and Wilma Garcia 1979 4,503
1980 4,133
After concessions, the sole issue for decision is whether California sales taxes paid by petitioners Walter and Mary Bailey2 in connection with their acquisition of two boats (one in 1979 and the other in 1980) for business purposes can be deducted (as claimed by petitioners) or must be capitalized as part of the cost of…
2Cases cited9 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Western Lithograph Co. v. State Board of EqualizationCalifornia Supreme Court · 1938
- United States v. California State Board of EqualizationCourt of Appeals for the Ninth Circuit · 1981
- Diamond National Corp. v. State Board of EqualizationSupreme Court of the United States · 1976
- De Aryan v. AkersCalifornia Supreme Court · 1939
4 more not listed; retrieve them via the Exa API.
3Cited by4 opinions
- Marcor, Inc. v. CommissionerUnited States Tax Court · 1987
- Bailey v. CommissionerUnited States Tax Court · 1987
- Downing v. CommissionerUnited States Tax Court · 1989
- Marcor, Inc. v. CommissionerUnited States Tax Court · 1987