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this Court considered the issue of whether a person in the
business of only laying emulsified asphalt sold merchandise or
maintained an inventory of emulsified asphalt.7
In Galedrige Constr., Inc. it was clear that the taxpayer,
an asphalt paving contractor, provided a service to its clients;
if its clients had wanted only to purchase emulsified asphalt,
they could have done so by dealing directly with the emulsified
asphalt supplier. Similarly, in the case at hand, it is clear
that petitioner provides service to its clients; if its clients
wanted only piles of fill sand, drain rock, liquid concrete, and
miscellaneous hardware items, they could obtain them directly
from the various suppliers. It is evident that petitioner's
clients could order the various materials directly from the
7In Akers v. Commissioner, T.C. Memo. 1984-208, affd. in
part and revd. in part sub nom. Asphalt Prods. Co. v.
Commissioner, 796 F.2d 843 (6th Cir. 1986), this Court considered
the issue of whether a taxpayer in the business of manufacturing
and selling asphalt and asphalt products, who maintained
inventories including oil byproducts and other raw materials, in
addition to performing some paving work, must account for
inventories and use the accrual method of accounting.
In contrast, the taxpayer in Galedrige Constr. Inc. v.
Commissioner, T.C. Memo. 1997-240, was not in the business of
manufacturing asphalt and maintained no inventory of asphalt, oil
byproducts, or other raw materials. Moreover, unlike the
taxpayer in Akers who had large tanks in which it was able to
preserve the emulsified condition, and therefore the marketable
quality, of its finished product, the taxpayer in Galedrige
Constr., Inc. was unable to prevent or delay the asphalt from
becoming rock hard and worthless within a very few hours.
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