Opinion ID: 308206
Heading Depth: 1
Heading Rank: 6

Heading: Excise Tax on Jaguars.

Text: 20 Taxpayer argues that it should be entitled to exclude $30 of the consideration received from its Jaguar distributors during the relevant period, on the basis that these payments were paid to Jaguar Co. and used by it to reimburse local dealers for local advertising. Taxpayer relies upon this court's language that the consistent administrative practice of the Treasury from 1932 to 1956 permitted [local advertising] to be credited as readjustments of the sales price. Waterman-Bic Pen Corp. v. United States, 332 F.2d 711, 715 (2d Cir. 1964). 8 While the applicable statutes (and regulations) in effect from November 30, 1958, through March 31, 1960, were construed in Waterman-Bic not to permit the exclusion of a manufacturer's local advertising allowance, 9 the tax years here in question were 1955 and 1956 and hence fall within the period permitting administrative exclusionary treatment under the language above quoted. If the basis for the trial court's decision were that Waterman-Bic was controlling for these taxable years, we might be forced to remand. The court below found, however, that the taxpayer never proved that $30 deduction by checking the distributors' records, produced no details of any records of the advertising spent, and failed to produce proof that the advertising charge collected was for local purposes rather than national and failed to demonstrate that all of the monies collected were in fact collected. 21 On the strength of these findings and the record below we agree with the alternate conclusion of the district court that the taxpayer had not sustained its burden of proof. Only vague and undocumented testimony was offered below to substantiate taxpayer's contention that the money was actually spent for local advertising. No copies of the advertisements and no dealers' or distributors' records were submitted. 22 Judgment affirmed as to excise taxes on Jaguars. Cause remanded as to excise taxes on Porsches imported by Hoffman-Porsche and Mercedes imported by Eastern and sold at retail by Hoffman Motor and as to excise taxes on Alfa Romeos imported by Hoffman Motor and sold at retail by Western, for findings in accordance with opinion.