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provisions in order to determine whether we can conclude that
petitioners are entitled to summary judgment on the matter before
us.
a. Legislative History--Sec. 936(h)
Subsection (h) was added to section 936 by section 213(a)(2)
of the Tax Equity and Fiscal Responsibility Act of 1982
(hereinafter sometimes referred to as TEFRA 82), Pub. L. 97-248,
96 Stat. 324, 452. The bill (H.R. 4961) as passed by the House
of Representatives did not have a provision corresponding to
subsection (h). H. Conf. Rept. 97-760, at 504 (1982), 1982-2
14(...continued)
as a result that these activities amounted to production within
the meaning of sec. 993(c)(1)(A). In each of these cases it
appears that all the relevant work was done directly by employees
of the company whose qualifications were in dispute. The
question before the Court in each of those cases was whether
there was manufacturing or producing. In the instant cases,
respondent states on answering brief: “Respondent does not
dispute that there was manufacturing. The issue is, rather, who
did the manufacturing.” We do not believe that either Dave
Fischbein Manufacturing Co. or Webb Export Co. is helpful in
deciding whether EAPR manufactured or produced the video games
here in dispute; neither side cites either of those opinions.
Both sides cite Bausch & Lomb, Inc. v. Commissioner, T.C. Memo.
1996-57. We conclude that that opinion is not helpful in
resolving the issue presented in the instant cases for the same
reason that Dave Fischbein Manufacturing Co. and Webb Export Co.
are not helpful--they focus on whether there was manufacturing or
production, not on whether the subject corporation could properly
be considered to be responsible for the manufacturing or
production.
A recent review of some of the materials in this area does
not deal with the significance of (1) variations in statutory
language and (2) the analysis in Spalding v. Commissioner, 66
T.C. 1017 (1976). Levine et al., “Assessing the Manufacturing
Exception to Subpart F Through Contract Manufacturing
Arrangements”, 1 Taxation of Global Transactions 37 (2001).
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