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components because they relate to the operation or maintenance of
the hospital buildings. Respondent maintains that the boilers
are designed to generate hot water and pressurized steam
primarily for heating purposes and secondarily for use in various
hospital equipment. Respondent also asserts that the boilers
are not removable or reusable.
Section 1.48-1(e)(2), Income Tax Regs., includes as an
example of a structural component "all components (whether in,
on, or adjacent to the building) of a * * * heating system,
including motors, compressors, pipes and ducts." Specifically
excluded, however, is "machinery the sole justification for the
installation of which is the fact that such machinery is required
to meet temperature or humidity requirements which are essential
for the operation of other machinery * * *". Id.
Petitioners contend that the steam boilers are, in all
material respects, the same as the boiler facility analyzed in
Rev. Rul. 70-160, 1970-1 C.B. 7. In that ruling, a furniture
manufacturer constructed a separate boiler facility to produce
steam for use directly in the furniture manufacturing process,
for heating make-up air needed to maintain proper humidity and
temperature conditions in the machine, veneer, and cabinet room
areas of the factory, and for incidental heating of other areas
of the main factory and adjacent buildings. Id. Respondent
ruled that the boiler facility (excluding the building)
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