Court Opinion

ID: 9448736
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:44:06.748745+00
Date Added: 2024-06-11T17:31:32.602865
License: Public Domain

WOODBURY, Chief Judge
(dissenting).
With reference to the predecessor statute, in substance similar to the 02ie under consideration in the case at bar, the Court in F. W. Fitch Co. v. United States, 323 U.S. 582, at page 584, 65 S.Ct. 409, at page 411, 89 L.Ed. 482 (1945), said:
“In essence, all manufacturing and other charges incurred prior to the actual shipment of an article and reflected separately or otheinvise in the f. o. b. wholesale price are to be included in the sale price underlying the tax, while all charges incurred subsequent thereto are to be excluded. Hence any additional charge which a purchaser would not be required to pay if he accepted delivery of the article at the factory or place of production may be so excluded.”
And again at page 585, of 323 U.S., at page 411, of 65 S.Ct. the Court said:
“Pre-shipment charges relative to coverings, containers and placing an article in condition for shipment are specifically included in the determination of the selling price. But a subsequent ‘transportation, delivery, insurance, installation, or other charge’ is to be excluded if properly established.”
The reduced transportation costs here were incurred subsequent to shipment and they were not charged to a purchaser who accepted delivery at the factory or place of production. Therefore they were properly excluded according to the standard set forth by the Supreme Court in the F. W. Fitch case.
It is conceded that the cost of transporting bowling balls to a specific, identified purchaser is not to be ificluded in the base upon which the tax is calculated. The question is whether reduced transportation costs, also paid by the purchaser, and incurred as much for the benefit of the seller as for the buyer, to ship balls in quantity to the west coast in an*682ticipation of sales should be treated any differently. I see no basis in the statute itself or in the Fitch case for a distinction which causes exclusion to turn upon whether the shipment is pursuant to a completed sale. The issue as I see it is rather whether the costs were incurred prior or subsequent to shipment.
My associates place great weight upon G.C.M. 21114, 1939-1 Cum.Bull. (Part 1) 351-4 and the fact that Congress has had over twenty years to change that ruling had it so desired. Conceding that the silence of Congress may be used as a make-weight argument, I think that its silence can as well be construed as indicating approval of the rationale of F. W. Fitch Co. v. United States, supra, which laid down a test contrary, so far as here relevant, to the administrative ruling. I would affirm on the opinion of the District Court.