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and/or merchandise must be held for sale in addition to being
merely sold. There is no question here that petitioner
contracted to purchase the concrete, sand, gravel, concrete, re-
bar, anchor bolts and rods, expansion anchors, holddowns, straps,
and piping for sewer and drainage. Some of those items were
inventoried at petitioner’s place of business, some were stored
at the customer’s job site (sand and gravel). The concrete,
however, was ordered by petitioner in a contract relationship
between petitioner and a supplier. Petitioner controlled the
ordering of the concrete, its time of delivery, pouring, and
placement. Finally, although the concrete hardened in place,
petitioner remained responsible for any risk of loss until the
developer/customer accepted the finished product.
By way of analogy, some contractors precast and sell large
concrete structures that are transported from the contractors’
place of business to the buyers’ job sites. Would the majority
hold that such a precast product is not merchandise? Should the
place of casting the concrete dictate a taxpayer’s choice of
accounting method? In either case, the contractor is purchasing
the materials, casting the concrete shape (incorporating the so-
called hardware), then marking up the material and labor, and
selling it to the end user. Should there be a difference between
contractors who provide electrical, plumbing, heating, air
conditioning services and/or materials and those who provide
other structural components (e.g., concrete)?
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