- 10 -
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.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011