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Rul. 81-272, 1981-2 C.B. 116) and on Rev. Rul. 75-7, 1975-2 C.B.
244, to show that EAPR was the manufacturer. Petitioners contend
that what EAPR did satisfied the congressional purpose of
creating jobs in Puerto Rico.
In response to respondent’s “expressio unius” contentions,
petitioners maintain that the Congress’s inclusion of “contract
manufacturing” as a consideration in section
936(h)(5)(B)(iii)(II) that limits the ability of a corporation to
qualify for significant business presence treatment, should
properly lead to a conclusion that contract manufacturing does
not otherwise limit the ability of a corporation to so qualify.
In response to respondent’s contention that the video games,
or some of them, were manufactured in the Dominican Republic,
petitioners rely on the stipulation that the video games were
manufactured in Puerto Rico.
On opening brief, petitioners state that EAPR satisfied the
first prong “and Respondent does not contend otherwise.”
Respondent states that “Respondent did not contend otherwise,
however, until having obtained the unsigned Declaration of Miguel
Orlando Alvarado.” The only objection that respondent then
states as to the first prong is that “it is highly likely that
some of the direct labor costs claimed by Petitioners to have
been expended in the possession were really expended in the
Dominican Republic.”
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