State Farm Road Corp. v. Commissioner
United States Tax Court
Petitioner was in the business of constructing and operating sewage disposal and treatment facilities and financed its construction costs by levying "tie-in" charges against prospective customers. Held, receipts from tie-in charges are not contributions to capital and are includable in petitioner's gross income.
1Opinion of the Court
OPINION
Since both parties seek to align the facts of this case with various legal formulations of what constitutes a nonshareholder contribution to corporate capital, including the test recently set forth in United States v. Chicago, Burlington & Quincy R. Co., 412 U.S. 401 (1973), a brief historical discussion is in order to determine the scope of that term for purposes of section 118(a).5
The exclusion from income of nonshareholder contributions to capital derives from Edwards v. Cuba Railroad Co., 268 U.S. 628 (1925), where it was held that Government subsidies to a railroad to induce the…
2Cases cited19 opinions
- Commissioner v. Glenshaw Glass Co.Supreme Court of the United States · 1955
- New York Trust Co. v. EisnerSupreme Court of the United States · 1921
- Commissioner v. LoBueSupreme Court of the United States · 1956
- United States v. Skelly Oil Co.Supreme Court of the United States · 1969
- Detroit Edison Co. v. CommissionerSupreme Court of the United States · 1943
14 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Nathel v. CommissionerCourt of Appeals for the Second Circuit · 2010
- Dialcab Taxi Owners Guild Asso. v. CommissionerUnited States Tax Court · 1981
- EPCO, Inc. v. CommissionerUnited States Tax Court · 1995
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
2 more not listed; retrieve them via the Exa API.