Dairy Queen of Oklahoma, Inc. v. Commissioner
United States Tax Court
1. In 1939 an individual obtained from a patentee of a freezing and dispensing machine "the exclusive right and license to the use, manufacture, sale and distribution of all machines built" under the patent within 24 States, including Oklahoma. The individual invented a formula for an ice cream mix and registered the product under the trade name "Dairy Queen" in Oklahoma.
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1. In 1939 an individual obtained from a patentee of a freezing and dispensing machine "the exclusive right and license to the use, manufacture, sale and distribution of all machines built" under the patent within 24 States, including Oklahoma. The individual invented a formula for an ice cream mix and registered the product under the trade name "Dairy Queen" in Oklahoma. In 1946 petitioner Copelin obtained from the above individual and his then partner the sole and exclusive right and franchise for the manufacture, preparation, sale, and distribution of the product within the State of…
1Opinion of the Court
OPINION.
ARUndell, Judge:
The main question is whether the amounts (both the lump-sum and gallonage payments) petitioner corporation received during the years 1948 and 1949 from the second parties in the 36 franchise agreements represented proceeds from the sales of capital assets and are taxable as long-term capital gain under section 1173 of the Internal Revenue Code of 1939, or whether such amounts were royalties taxable as ordinary income.
In its returns petitioner corporation reported the lump-sum payments as capital gain and the gallonage payments as royalties. It now contends, however,…
2Cases cited8 opinions
- Waterman v. MacKenzieSupreme Court of the United States · 1891
- Myers v. Comm'rUnited States Tax Court · 1946
- Kronner v. United StatesUnited States Court of Claims · 1953
- Hopkins v. CommissionerUnited States Tax Court · 1950
- Hugh Smith, Inc. v. CommissionerUnited States Tax Court · 1947
3 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Rodgers v. CommissionerUnited States Tax Court · 1969
- Vern H. Moberg and Reta N. Moberg v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1962
- United States v. WernentinCourt of Appeals for the Eighth Circuit · 1965
- Dairy Queen of Oklahoma, Inc., Dissolved v. Commissioner of Internal Revenue, L. H. Nehring, Trustee v. Commissioner of Internal Revenue, Priscilla Nehring, Trustee v. Commissioner of Internal Revenue, L. E. Copelin, Trustee v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1957
- Dairy Queen of Oklahoma, Inc. v. CommissionerCourt of Appeals for the Tenth Circuit · 1957
14 more not listed; retrieve them via the Exa API.