- 11 -
title. Petitioner relies on the following language to support
its position that it does not have to include the materials it
acquires in inventory. Section 1.471-1, Income Tax Regs.,
provides in pertinent part:
Merchandise should be included in the inventory only if
title thereto is vested in the taxpayer. Accordingly, the
seller should include in his inventory goods under contract
for sale but not yet segregated and applied to the contract
and goods out upon consignment, but should exclude from
inventory goods sold, * * * title to which has passed to the
purchaser. A purchaser should include in inventory
merchandise purchased, * * * title to which has passed to
him, although such merchandise is in transit or for other
reasons had not been reduced to physical possession, but
should not include goods ordered for future delivery,
transfer of title to which had not yet been effected.
[Emphasis added].
Specifically, petitioner asserts that under Georgia law6,
title to the job site materials remains in the vendor until
delivery, and at delivery vests in the job site owner.
Petitioner claims that in essence, it was a broker or agent for
its customers, in that it merely coordinated the purchase, sale,
and delivery of materials to the job site for a fee. Thus,
petitioner contends that title passed directly from its vendors
to its customers at the point of shipment, here the job site. To
support its position that as a broker, it is not required to
6 Ga. Code. Ann. sec. 11-2-401(2) (1994) provides in pertinent
part:
Unless otherwise explicitly agreed title passes to the buyer at
the time and place at which the seller completes his
performance with reference to physical delivery of the goods
* * *
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011