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FINDINGS OF FACT
Some facts have been stipulated and are so found. The
stipulation of facts, with attached exhibits, is incorporated
herein by this reference.
Petitioner’s Business Operations
Elmo J. Harrison (Mr. Harrison) and Mrs. Harrison entered
into the trash or waste pickup and disposal (trash hauling)
business (sometimes, the business) in 1932. They incorporated
the business (i.e., petitioner) in the State of California in
1967. At the time it filed its petition, petitioner’s principal
place of business was in the State of California. During the
audit years, petitioner performed its trash hauling services
pursuant to contracts with various municipalities in Ventura and
Santa Barbara Counties in the State of California. Those
contracts provided to petitioner the exclusive right or franchise
to pick up and dispose of residential and commercial waste.
Under the contracts, petitioner was permitted to charge a per-
barrel or per-bin trash hauling rate as set by the municipality
from time to time. Some contracts also provided a “management
fee” based upon petitioner’s cost of performance. In
consideration of the grant of the franchise, petitioner was
typically charged a “franchise fee” by the customer equal to a
specified percentage (e.g., 5 percent) of its gross receipts
under the contract. The municipalities with which petitioner had
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Last modified: May 25, 2011