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We approve of respondent’s use of the Lundberg report in
reconstructing petitioner’s diesel fuel gross receipts, with the
following two modifications: Firstly, the parties stipulated
that the combined California and county sales taxes rate was 6
percent during the period July 1 through November 30, 1989, and
was 6� percent during the period December 1, 1989, through June
30, 1990. Respondent’s determination to subtract 29 cents per
gallon to reflect the total excise and sales taxes is upheld for
the first 5 months of petitioner’s fiscal 1990. However, for the
remaining 7 months of petitioner’s fiscal 1990, when the 6�
percent sales taxes total was in effect, the shrinking out of the
excise and sales taxes shall be accomplished by subtracting 30
cents per gallon. Secondly, respondent rounded the Lundberg
report numbers to the nearest whole cent per gallon. This seems
to have resulted in a slight upward bias that appears to
accumulate to several thousand dollars. We direct that the
calculations shall be accomplished by rounding the Lundberg
report numbers to the nearest tenth of a cent per gallon.
At trial, Steve testified that petitioner marked up the
diesel fuel by an average of three cents per gallon. However, it
is clear from the last PLS and petitioner’s fiscal 1990 tax
return that petitioner reported a markup of more than seven cents
per gallon. See supra table 6. Once again, Steve’s testimony
contradicts petitioner’s books and records.
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