Peterson Mortuary, Inc. v. Vinal
| Decision Date | 04 February 1965 |
| Docket Number | Civ. No. 01714. |
| Citation | 238 F. Supp. 346 |
| Parties | PETERSON MORTUARY, INC., Plaintiff, v. Richard P. VINAL, Defendant. |
| Court | U.S. District Court — District of Nebraska |
Eugene P. Welch, of Gross, Welch, Vinardi, Kauffman, Schatz & MacKenzie, Omaha, Neb., for plaintiff.
Howard N. Singer, Atty., Dept. of Justice, Washington, D. C., for defendant.
This is an action instituted by the plaintiff Peterson Mortuary, Inc., a citizen and resident of the State of Nebraska against Richard P. Vinal, the District Director of Internal Revenue for the District of Nebraska for a refund of taxes paid. The United States of America has filed a supplemental complaint in intervention for the payment of additional excise taxes and interest arising from the same transactions and having questions of law and fact in common with the main case. This Court has jurisdiction under 28 U.S.C.A. § 1340.
The facts have been stipulated between the parties. On December 29, 1958, the taxpayer purchased a Chrysler automobile from Gamboni Motors, a car dealer in Nebraska City, Nebraska. The automobile was ordered by the dealer from Chrysler Corporation in Detroit, Michigan, with instructions to deliver it to the Memphis Coach Company Memphis at Memphis, Tennessee. The taxpayer had contracted with the coach company to make certain alterations to the automobile so that it might be used as an ambulance. The work was done and materials furnished by Memphis at a cost to the taxpayer of $1,870.25. The weight of the vehicle was increased by between 750 and 1000 pounds. Thereafter, an employee of the taxpayer took delivery and drove it to Omaha from Memphis. Since that time the vehicle has been used in the taxpayer's business as an ambulance.
On January 14, 1960, the taxpayer purchased another Chrysler automobile from the said dealer. However, this time an employee of the taxpayer took possession from the car dealer and drove the automobile to Memphis, Tennessee. Taxpayer had previously contracted with the coach company to supply labor and materials to convert the automobile into a hearse. This was done at a cost of $4,194.00 to the taxpayer, and the weight of the vehicle was increased by about 2000 pounds. The employee of the taxpayer then took delivery of the hearse from Memphis and drove it to Omaha where it has since been used in the taxpayer's business as a hearse.
Although more work was required on the hearse, both conversions required a substantial amount of rebuilding. The taxpayer had no control over any of the labor or materials furnished in this activity. The title to the automobile remained in the taxpayer at all times after the purchase thereof.
On July 30, 1962, taxpayer filed two Quarterly Excise Tax Returns with the defendant, one for the first quarter of 1959, the other for the first quarter of 1960. Payment with the returns was made as follows:
Quarter Ending Quarter Ending
March 31, 1959 March 31, 1960
Manufacturer's Excise Tax $177.03 $399.40
Interest 34.52 53.92
Penalty 44.26 99.85
_______ _______
$255.81 $553.17
A refund claim has been made for these amounts, and no action was taken by the defendant thereon. Later the penalty referred to was abated.
On June 28, 1963, the Commissioner of Internal Revenue assessed additional excise taxes on the transactions in question of $367.79 plus interest of $66.58. From this amount has been subtracted the amount of the penalty abatement, which was never returned to the taxpayer, leaving a balance of $290.26. This is the amount prayed for in the intervening complaint by the United States of America.
The statutes involved are from the Internal Revenue Code of 1954 26 U.S. C. and read in pertinent part as follows:
There are basically three questions that are to be resolved in this case. The first is whether or not the conversion of these automobiles into, respectively, an ambulance and a hearse, is a further act of manufacture so as to place the activity performed within the meaning of the cited statutes. The second question is whether the taxpayer itself may be considered to be a manufacturer under the circumstances of this case. The third and, in a sense, subordinate question is whether or not the tax imposed, if imposed at all, should be computed on what would be considered the sales price of the ambulance and hearse or on the conversion cost alone. Each of these questions shall be separately resolved.
The first question to be considered, then, is whether the transformation of the automobiles into a hearse and an ambulance was an act of manufacture. We must agree with the Government that it is. There is no necessity that a "new and different" article result from the process undertaken. United States v. Armaturs Exchange, Inc., 116 F.2d 969 C.A.9th., 1941. The fact that the article was a vehicle before and remains a vehicle after the transformation is in no way determinative of the question. The automobiles were substantially changed by the conversion. They are no longer suited for the activity of carrying passengers for which they were originally made. Conversely, the automobiles were not suited for use as an...
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Keasler v. U.S.
...automobiles and through "a substantial amount of rebuilding" had converted them into a hearse and an ambulance. Peterson Mortuary v. Vinal, 238 F.Supp. 346, 347 (D.Neb.1965). The district court concluded that the transformation of these two vehicles was an act of manufacture because a new a......
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Vinal v. Peterson Mortuary, Inc.
...for additional excise taxes arising out of the same transactions involved in the refund suit. The trial court's opinion is reported at 238 F.Supp. 346. Timely claim for refund of the taxes has been made. Jurisdiction exists in the trial court under 28 U.S.C.A. § 1340 and in this court under......
- United States v. Blackwell, Civ. A. No. 4275.