- 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