Von Euw & L.J. Nunes Trucking, Inc. - Page 10

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          not an income-producing factor in petitioner’s business.                    
               Petitioner makes several arguments regarding why the sand              
          and gravel should not be considered merchandise (i.e., items                
          acquired and held for sale).  On brief, petitioner positions                
          itself as a service provider rather than as a seller of goods.              
          Petitioner argues that to perform its primary business activity             
          of delivering sand and gravel, petitioner merely accommodates its           
          customers by also procuring sand and gravel.  Further, petitioner           
          asserts that, because it does not have any sand and gravel on               
          hand at the beginning or end of the business day (due to the fact           
          that on the same day it procures and delivers the exact amount of           
          sand and gravel requested by its customers), it does not hold the           
          sand and gravel for sale.  Petitioner also argues that it does              
          not mark up the cost of the sand and gravel and that “it makes              
          the same profit whether it procures and delivers the requested              
          [sand and gravel], or simply delivers [the] sand and gravel which           
          the [customer] already owns or has purchased separately”.7                  
               We reject petitioner’s contentions.  When petitioner                   
          transports the sand and gravel that a customer already owns or              
          has acquired, petitioner does not realize the profit associated             
          with acquiring sand and gravel for a customer.  Based on the                

               7  Petitioner argues that because it designates the profit             
          it earns on the “procurement” of sand and gravel as a separate              
          element of its charge for acquiring and transporting 1 ton of               
          sand and gravel, petitioner does not mark up the sand and gravel.           

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