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West Laurel Hill Cemetery Co. v. Rothensies

November 19, 1943

WEST LAUREL HILL CEMETERY CO.
v.
ROTHENSIES, COLLECTOR OF INTERNAL REVENUE.



Appeals from the District Court of the United States for the Eastern District of Pennsylvania; Harry E. Kalodner, Judge.

Author: Jones

Before BIGGS, MARIS, and JONES, Circuit Judges.

JONES, Circuit Judge.

The question here involved is whether the plaintiff taxpayer is entitled to claim exemption, as a cemetery company, from liability for capital stock taxes for the years 1933, 1934 and 1935. The taxpayer, after disallowance of its claims for refund, filed three separate suits in the District Court against the collector to recover the disputed taxes which it had been compelled to pay for each of the respective years mentioned. The cases were consolidated for trial and came before the court below on motions by the respective parties for summary judgments on the pleadings supported by a stipulation of facts. From the judgments entered by the trial court in favor of the defendant collector, the plaintiff took the pending appeals.

The statutes pertinent to the plaintiff's claims are Section 215(c)(1) of the National Industrial Recovery Act of 1933, c. 90, 48 Stat. 195, 207, Section 103(5) of the Revenue Act of 1932, c. 209, 47 Stat. 169, 26 U.S.C.A. Int. Rev. Acts, page 506, and the cognate provisions, Sec. 701(c)(1) and Sec. 101(5), of the Revenue Act of 1934, c. 277, 48 Stat. 680, 26 U.S.C.A. Int. Rev. Acts, page 787 and page 688.

Sec. 215 of the National Industrial Recovery Act, which imposed a capital stock tax on domestic corporations for each year ending June 30, provided in subsection (c)(1) thereof that, -

"(c) The taxes imposed by this section shall not apply -

"(1) to any corporation enumerated in section 103 of the Revenue Act of 1932;"

Sec. 103 of the Revenue Act of 1932 granted exemption to certain organizations from the income tax liability imposed by that Act upon corporations, among such exempted organizations being, "(5) Cemetery companies owned and operated exclusively for the benefit of their members or which are not operated for profit; and any corporation chartered solely for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily incident to that purpose, no part of the net earnings of which inures to the benefit of any private shareholder or individual."

By Sec. 701(a) of the Revenue Act of 1934 a capital stock tax at the same rate as had been imposed by Sec. 215(a) of the National Industrial Recovery Act was imposed on domestic corporations for each year ending June 30, beginning with the year ending June 30, 1934, and Sec. 701(c)(1) of the Act of 1934 provided that, -

"(c) The taxes imposed by this section shall not apply -

"(1) to any corporation enumerated in section 101."

Among the corporations enumerated in Sec. 101 of the Revenue Act of 1934 (see subsection (5) were cemetery companies supplying qualifications similar to those specified in Sec. 103(5) of the Revenue Act of 1932 as above quoted.

The question which we have for consideration is whether the court below erred in concluding that the instant taxpayer did not qualify during the years in question as a cemetery company within the intent of Sec. 103(5) of the Revenue Act of 1932 or the similar provision in Sec. 101(5) of the Revenue Act of 1934. As the two provisions are exactly ...


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