- 3 -
Member stores purchase food and other consumer products from
petitioner. Petitioner purchases these goods from manufacturers
and suppliers. Petitioner purchases directly from sales
representatives of some manufacturers, and it purchases other
manufacturers' products from independent brokers. Brokers
typically represent a variety of manufacturers or distributors.
Unless otherwise specified, we use the term "vendor" to refer to
manufacturers' sales representatives and brokers.
During the years at issue, manufacturers provided vendors
with promotional funds. These promotional funds were to be used
by the vendors to increase retail sales. Many vendors deposited
their promotional funds with petitioner. In our original
opinion, we concluded that these funds deposited with petitioner
were properly taxable to petitioner. See Affiliated Foods, Inc.
v. Commissioner, supra. The Court of Appeals for the Fifth
Circuit reasoned that, under the circumstances of this case, the
promotional account funds were not taxable to petitioner. See
Affiliated Foods, Inc. v. Commissioner, 154 F.3d at 533.
Petitioner also conducted annual food shows.
Representatives of member stores would attend these shows and
place orders for various products from the vendors. Each vendor
entered into an agreement with petitioner governing the vendor's
participation in the food shows. One of the conditions of
participation was that the vendor would offer approved special
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011