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FINDINGS OF FACT
Some facts are stipulated and are so found. The stipulation
of facts, with accompanying exhibits, is incorporated herein by
this reference.
Petitioner
Petitioner is a wholesale food purchasing cooperative that
resells a variety of products to retail grocery stores in Texas,
New Mexico, Oklahoma, Kansas, Colorado, and Arizona. At the time
the petition was filed, petitioner maintained its principal place
of business in Amarillo, Texas. Petitioner was incorporated in
1946 under the cooperative laws of the State of Texas to increase
the bargaining power of member stores in their dealings with
vendors.1 As of the time of the trial, petitioner had more than
239 shareholder-patrons, who operated approximately 715 member
stores. Petitioner does not own any interest in any member
store.
Petitioner computes its taxable income using an accrual
method of accounting and pursuant to the provisions of part I
1 The parties have stipulated that the term “member stores”
refers to retail grocery stores that individually or as a group
of related and associated retail grocery stores purchase food and
other consumer products from or through petitioner and that are
members of, or shareholders in, petitioner’s cooperative system.
They have further stipulated that the term “vendor” refers to
manufacturers or other producers of food and other products sold
to petitioner and member stores. We shall adopt those locutions
for purposes of this report.
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Last modified: November 10, 2007