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Finally, the majority’s reliance on Hospital Corp. of Am. v.
Commissioner, 107 T.C. 116 (1996), to support its proposition
that petitioner’s income is attributable solely to services and
not to some combination of services and merchandise is puzzling.
In Hospital Corp. of Am., we did indeed find that, for purposes
of section 448(d)(5), the use of medical supplies is part of the
medical services furnished patients by the hospitals in question.
See id. at 144. In the same breath, however, we found “the cost
of those supplies is an incidental cost of the health care
services provided by the hospitals.” Id. Given that finding,
the fact that Hospital Corp. of Am. involves a different section
of the statute, and our specific reservation in Hospital Corp. of
Am. that we were not deciding the question of whether the
furnishing of medical supplies by the hospitals as a part of the
rendering of services to their patients could be considered to be
a sale of inventory, I do not consider that case as persuasive
with respect to the issue before us today.
The majority cannot escape an examination of the particular
facts of this case in light of the relevant provisions of law.
4. Finding of Fact
We find the instant setting distinguishable from
the setting of those cases in which we have held that
goods utilized by a service provider were merchandise
for purposes for the inventory rules. We give
significance to the uniqueness of the industry in which
petitioner operates in relation to the other service
industries we have addressed on this issue and bear in
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