Gumpert v. United States

• Decision Date: 07 March 1962
• Docket Number: No. 361-59.,361-59.
• Citation: 296 F.2d 927,155 Ct. Cl. 721
• Parties: Armand A. GUMPERT, Personally, and also Trading and Doing Business as Sightseeing With Gumbo, and also Trading and Doing Business as Gumbo Sightseeing Tours, and also Armand A. Gumpert and Richard J. Batt, Jr., A Partnership Trading and Doing Business as Sightseeing With Gumbo v. UNITED STATES.
• Court: U.S. Claims Court

155 Ct. Cl. 721, 296 F.2d 927 (1961)

Armand A. GUMPERT, Personally, and also Trading and Doing Business as Sightseeing With Gumbo, and also Trading and Doing Business as Gumbo Sightseeing Tours, and also Armand A. Gumpert and Richard J. Batt, Jr., A Partnership Trading and Doing Business as Sightseeing With Gumbo v. UNITED STATES.

No. 361-59.

United States Court of Claims.

December 6, 1961.

Rehearing Denied March 7, 1962.

David W. Palmer, Panama City, Fla., for plaintiffs.

Earl L. Huntington, Washington, D. C., with whom was Asst. Atty. Gen. Louis F. Oberdorfer, for defendant. Lyle M. Turner and Philip R. Miller, Washington, D. C., on the brief.

LARAMORE, Judge.

This is a suit to recover amounts paid by the plaintiffs to the United States as excise tax on the transportation of persons in connection with the operation of a sightseeing business. Said tax was allegedly illegally and erroneously collected for the years 1953 to 1957.

For the purposes of this opinion, we shall treat the petitioners, Armand A. Gumpert and Richard J. Batt, Jr., as though they were a partnership for the period involved, and will hereinafter refer to petitioners as plaintiffs.

Throughout the period involved, plaintiffs were engaged in the business of operating sightseeing tours by means of limousines to various points of interest in the City of New Orleans, Louisiana. During this period plaintiffs paid excise taxes for each year involved, totaling $12,754.37. In 1957, plaintiffs ceased paying this excise tax on the assumption that the tax was imposed illegally and erroneously. This suit is the culmination of plaintiffs' efforts to have returned to them the tax collected from them for the years in dispute.

The pertinent sections of the Internal Revenue Code of 1954, 26 U.S.C.A., under which part of the tax collected was imposed, state:¹

"§ 4261. Imposition of tax.

"(a) Amounts Paid Within the United States. — There is hereby imposed upon the amount paid within the United States for the transportation of persons by rail, motor vehicle, water, or air within or without the United States a tax equal to 10 percent of the amount so paid.

* * * * * *

"§ 4262.^* Exemptions.

* * * * * *

"(b) Commutation travel, etc. — The tax imposed by section 4261 shall not apply to amounts paid for transportation which do not exceed 35 cents, to amounts paid for commutation or season tickets for single trips of less than 30 miles, or to amounts paid for commutation tickets for one month or less.

"(c) Small vehicles on nonestablished lines. — The tax imposed by section 4261 shall not apply to transportation by motor vehicles having a passenger seating capacity of less than ten adult passengers, including the driver, except when such vehicle is operated on an established line."

Hence it is the contention of the plaintiffs that their enterprise falls within the exemption granted by section 4262 (c), and consequently it follows that the tax should not be imposed. The plaintiffs contend that the services furnished by them were not subject to the transportation tax because (1) the statutes do not impose any tax on "sightseeing," (2) their limousines were not operated on an "established line," (3) the cost of the transportation element of the tour amounted to less than 60 cents per fare (§ 4262(b) was amended by Act of Aug. 7, 1956, which substituted "60" for "35" cents), and (4) the doctrine of estoppel should be applied in their favor.

Whatever merit may lie in plaintiffs' contentions is not now considered by the court, because we are of the opinion that it is not only unnecessary to consider these issues, but inappropriate to do so. It is our view that plaintiffs have failed in their burden to show that they have a proper standing to bring this suit. Sections 3471 and 6415 of the 1939 and 1954 Internal Revenue Codes, respectively,² allow a collector of the tax to seek a refund thereof only if he establishes that he has repaid the amount of such tax to the person from whom he collected it, or has obtained the consent of such person to the allowance of the credit or refund. However, plaintiffs do not allege that they made a refund to their passengers of the transportation taxes involved, or that they have obtained the consent of the passengers to the allowance of the refund sought in this suit. They admit that they have not complied with either of these provisions; instead they argue that these provisions are inapposite to their situation because they paid the tax themselves instead of collecting the tax from their passengers, hence plaintiffs contend that they bore the economic burden and are entitled to relief. In support of their position, plaintiffs cite Abbott et al. v. United States, Cong. No. 5-57, decided July 13, 1959, Ct.Cl., 175 F.Supp. 917, wherein it was held that taxpayers were entitled to a refund on the theory that they had borne the economic burden of the tax where it was found as a fact that taxpayers had paid the tax out of their own pockets. However, the only evidence in the instant case that plaintiffs have borne the economic burden of the tax is a naked allegation by the plaintiffs that they carried the tax as an expense of doing business, hence they paid the tax. The evidence does not substantiate this contention. It was shown (1) that the basic ticket price was $4 or $5 plus 10 percent or 15 percent depending on the appropriate amount of the excise tax rate currently then in effect; (2) that the price of the ticket changed with a corresponding change in the tax rate; and (3) that the tour tickets themselves reflected the tax, in that there was a place for the price of the tour and a place for the amount of the tax. Where an...