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purchases the paper and ink from a manufacturer, the architect's
sale of services and materials to his or her clients includes the
paper and ink, and the clients purchase the blueprints from the
architect. The essence of the architect's business is providing
the service of designing buildings, not the sale of blueprints.
Cf. Knight-Ridder Newspapers, Inc. v. United States, 743 F.2d 781
(11th Cir. 1984) (paper and ink held by newspaper publisher for
use in producing newspapers for sale to customers is inventory).
We hold that the inherent nature of petitioner's business is
that of a service provider. Accordingly, we must determine
whether the materials petitioner uses are an indispensable and
inseparable part of rendering its services.
A. The Liquid Concrete
Petitioner relies upon our decision in Galedrige Constr.,
Inc. v. Commissioner, T.C. Memo. 1997-240, for its argument that
the materials are not merchandise. We agree that the rationale
of Galedrige applies to the liquid concrete in this case.
In construing the word "merchandise" in Galedrige, we
applied the rule that "'the natural and ordinary meaning of the
words used will be applied * * * unless the Congress has
definitely indicated an intention that they should be otherwise
construed'". Wilkinson-Beane, Inc. v. Commissioner, supra at 354
(quoting Huntington Sec. Corp. v. Busey, 112 F.2d 368, 370 (6th
Cir. 1940)). In Galedrige Constr., Inc., for the first time,
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