- 11 -
Initially, respondent argues that petitioner's red
landscaping rock should be classified as "stone" under section
613(b)(6) because the red landscaping rock was not used for its
chemical or metallurgical properties; this classification would
result in a 5-percent depletion rate. Prior to the enactment of
the 1954 Code, the predecessor to section 613(b) provided a 5-
percent depletion rate for sand, gravel, and stone; a 10-percent
rate for dolomite; and a 15-percent rate for chemical and
metallurgical grade limestone. Sec. 114(b)(4)(A) of the 1939
Code, as amended by the Revenue Act of 1951, ch. 521, sec.
319(a), 65 Stat. 452, 497; G. & W. H. Corson, Inc. v.
Commissioner, 54 T.C. 668, 675 (1970), affd. 453 F.2d 578 (3d
Cir. 1971). However, in section 613(b) of the 1954 Code, the
qualifiers "chemical grade" and "metallurgical grade" were
dropped from limestone, dolomite was added to the 15 percent (now
14 percent) depletion rate category, and the "use test", i.e.,
"when used, or sold for use, by the mine owner or operator as rip
rap, ballast, road material, rubble, concrete aggregates, or for
similar purposes", was added. Thus, whether limestone is of
chemical grade is no longer a factor. G. & W. H. Corson, Inc. v.
Commissioner, supra; see also C. J. Langenfelder & Son, Inc. v.
Commissioner, 69 T.C. 378 (1977) (chemical attributes test
rejected for use of oyster shells). Accordingly, the chemical
and metallurgical properties foundation of respondent's argument
falls by the wayside.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011