Document v6nOYy7kop9VEZE05VKLOxyOq

PLAINTIFF'S EXHIBIT f 0* RSU394 COMMONV. .iALTH OF PENNSYLVANIA .Vv/V'^r DEPARTMENT OF REVENUE bAtfS TAX BOARO I 0AO 0noooo STRICT HARI SID# G IN TOUR RCFLT PLCARI. RCFCR TO Ir. He 1-eti.tion oft i-iCiirHw Construction Co., Inc. first National Bank Building .-h.diiloT.ovn, Ohio iud .VI>n'. ."l All V.:: Won 1i. -lytt e?r, ih-'idire hull, 14 lb; ind letijur iCiitio Building hircishurg, re*niisjTv...o ta tic ...too No, 99-"05Wt 1 Board Docket Boa. 2075 and 2076 1 - iXwleion Dstet January 14, I960 l t Reassessment 1 I*ROC3l2UHjUI HlS i'GHT S>.. :'i' ;. ku. . -o..;t<>>-. :-na A*'..i it-TSi . J. ?OV$tV i\ teujitxtkln Suptiiarj'.- .0 4 vuiitl.-.'-a: Lr.torrtst: Tut ..2 $<1.96 f **{1+ , 'K; 49.774.5t Li'& y * ? *1, L- 'j ^ * _r_' ...... .i-~ '<; Ocw^r tj'. vl untunt. , ly >; ''> H&LKIhG: Cijrtei J inaarjT 5, I960 Placet Harrisburg, Pennsylvania Praoent at Heading i For Petitioneri John C. Griffin, Associate Counsel loon 0, Kettger, Ssqulre S. A, Oettaan, Jr., Tax Accountant W, &. Phillips, Jr., Tax Accountant rov tno fluraatt* Peter Antenalla '-'illiam J. Htwenatino iki tore Horace A, Johnson, Member Bales Tax Board XI McGCon 2844 ^oQraw Conatr t .on Co., Inc Socket Jte. ,7 and 2076 -2 RETORT OF VIC. iffiARDIG fX-Clh'F.ti I. >F FACTi 1. Petitioner, an Ohio corporation, operating as a construction /any, had a construction contract with Armco ateal Corporation, also an nlo corporation. This contract, da tad Uarch 2$, 1953', provided in part as followsi "le agrea to construct as directed by Armco Staal Corporation. . . * "I. Service to Be Rendered. n(l) Subject to the limitations herein contained we ^ScGrew^ propose to act as your ftraco Staal Co7 agents in constructing the *ork to bo performed hereunder and in purchasing material and supplies therefor, subject at all tltoe to such instructions as you may from time to time give us. "(2) . . . "We will purchase for your account the necessary machinery, equip-ant and materials, su Joct to your approval. "i'e will furnish at our o-m expanse * "(a) . . . "(b) ... "(c) The service of the urenaoing Department in our bone office which will assist in the purchase of the machinery, spp..ratuc arid materials. "(d) ... "(e) ... "(3) ... "II. Cost of the nork. 11 It is undersU>>xi that 'tost of the lurk1 shall include tit i-iliowiny items whether conuitments or expen ditures c.: nr^.do by you direct or by us for your accounts! McGCon 2845 A, .1. . . * V-* j i ikif'riV V MeOraw Construction Co., lac. Docket Xea. 2075 nd 2076 - .ci * it. DisBORsamrrs.., v r. "Wo will aakc p*7aint} of-!>l^litu'(^ the cost of the work defined in'rArtlolc^! to bo advanced to ua by you for1 tha;'parpoiMtVissi each month a detailed rtatonont of ospondfit; the provioua month, supported by *T. PURCHASES AND CONTRACTS. Aft m KV&tom 5*Siij "Tou will hare aa f ill control aa youVoaijs^ ozarciao of th purehaao of materlala and: equipeenlt}' of tha lotting of such auboontraeta aa All contract* and orders plaoed by bo In your name, with your approval, tigned* by Agents for you. Payroll* shall bo paid by`.uccijfLa-vour;} naan out of monoya advanced by you and depjoosiiitfeddr'iii' Control Account." A' ^ :;W;$?#:; 2. Tbo abovo contract waa audited by tbo Bur*:au^bf'VSaio*'':.'abd''': ;;.-'V$fc'T^' ! On* Tax and tbo roaultlng asaeaamonta (A-006438 and H-0058&6644)p; worol'ba'aod $'!*?**:; on daficioncioa arising from transactions which occurredi pursuant /W.;.that"rt^ contract. -: ; *- 3. Armeo Steal aot up a tenoral working fund it tbo beginning - -VJ- -:an` i'V . of tho contract in tbo Amount of $25,000.00. Thia fund wee replenished/ periodically by Arnco Steelj it waa built up to $225 300.00 :,ln' the. early V part of 1957. This a as accomplished as followss ' Ameo'Xdnmi$ii^fc-::HcQ^^ 'r'V/Jyi'vtS ..'jiA;. V'- a chock in the amounItt ocff t$?k.000.00 navabl* to MeOraw Canatr^t&;<iMkif Th* homo office of MeOraw National Bank end Trust Company, Sutler, Pennsylvania of $25,000.00 (or in whatever aaount Armoo had advanced office). Tula check was payable tot MeOraw Construction Company., Agents for Arnco Steel Corpora$Jjbipif Control Account 777 ' ' ' Butler, Pennsylvania. * A letter accompanied tha Initial $25,000.00 cheek ,authe*^ r,yy: open an account wnleh was to be designated *MeGrtw .Cdqiift ; -V; Inc., Agents for Armeo Steel Corporation, Control Account?, ,V- ';.vA5-. r " . . -x 1 . '... . s*Ymjril A..`r\ ' r*> ' i ' \*' 'i'v'1' - .v., <*; ; * i iSc(h'iw Oonetnjction Ce., Inc Docket :k>6. 20?5 and 2076 Wi lt. McGraw drew on Control Account 777 ty the use of checks irhlch indicated that lieGraw was an Agent for Araco. 5. VLcGrww did not use any of its fundr in operating . urtuant to this contract. 6. ItoCrav's purchase orders requester that the at<ri.-.l 'e shipped to "kcOraw Construction Company, Inc., Agents for Armco tool or.oration", "urthmr, these pure .as- orders roquet--ed th.it the ven ,,r '.ill "VcGraw Con struct!..n Company, ire,. Agents f ir Arrrco Steel Corporation." 'ljie purchase orders were signed "Arneo Iteel Corporation, -chraw Conctmction Company, Inc,, A,-cr to 7. anphoval y n- . I. c 1 -or., a ratio:. w : repair*, d or all commit- ont s : r o " IpXXJ.OG. -i* :o .rit-.'tu, .-or. i u. >kc *. iswrunl:; urn. i IC*'.'. j.'., .1 1 ; un-u- -ily i'c r t: . : ids ha lean r.uivu tc to Amco . tet-1 . ov. orat-on tor the latt.r's ap. roval. c. / nr.co Loti Lortnr t:-.n hs. - ir*c;. ..ay penult v.'..Lch effec- t:.\r dur the i. period. .c row ur.od uhii. direct pay permit in taking t;>..-30 pur-ci : r< s <.>> nn-.u-nt to e .cC:av-- ntco c tract. t 1. c;-ra*r >m * ' me t L-. n i..,., 'no., :tin. ts nn ....... . ` > ',!*co t <> 1 '...r ...ration hhtn it ILL. eonfitructior. . .' ourchaeed .<; i I.-: ..nd ouppVJ e.'i7 2. Is an ni ant untitled to use a direct pay pormit of rtf. ..rincipal '_n r.t. : i:is: i. rr rr it.- rlr.ci.nl. ue'w pv McGCon 2648 MoQr* Construction Co., Inc, Docket *ioa. 2075 and 2076 III. COdCLt SION'S OF La^i 1. McGrsw Construction Comparty* Inc., was an agent for Arnoo Stool Corporation. 2. A lawful airent acting pursuant to an expressed agency in writing la entitled to uto a direct pay permit : its ,.rinci:al in m-.i- iny purcha rc pursuant to the tens of the expressed a.ency, iv. nrccoisio"; i 'ihe finding*. of fact are explicit and ciearl} c . r> t, --t an agency-principal rolationsdip was established by the contract, and that the Petitioner functioned as an ;.;-pjit in carrying out its obligations under that contract. armco .teel Corpoi" t.io.i did not ..ssign its direct pay permit to' the petitioner. This it coulc not no. however, there is nothin*' in the law, it regular.! ins, ur in the general principles of ..pet.Cj wi.ich j.iic: i-r*hiCit rmco from cm ring it. agents to usa the direct ..ay .-.irait vn behalf of Ar-.sco. Such was tlu: case and, thu;., the acts of Ycfr.w in pure be ala? as in .-gent were in c foot tin net,-; of its i-rincipai, < nr.ee . teel Cyr ration. <irmoo .'tael 0 .rati .-ur si.r.rit to if- rirr.ct vay pe-orJl, In : rmiJ-tod taxer. .',n tr.ese ;.uroh a .**<. '.K-t'ier or :i ot. . r ' ns rac:tly r twitted taxes on u ese purciuisrs cs.-: only c 'rtvx-mined ty -.u c..: t o." .race . tool C.j r. c re i.i'.'.i-,. McGCon 2850 HoQraw Construction co., Iria t Docket .Vos. 2Q>t> und 2076 -c- . i'.'.v,: , . .. .? > . . .1 * ' v..>. ^ */Tu.vV*,V\`i."w/7y r {1 : In accoiM<t:,^e iviui '.he alove, it is hereby ORDERED that the asoessatonts agair.ar !/' Con* ruction -onpany re itrickon in their entirety ar.c i.*, is recoil- e c..i u./.t the "ureuu eucii .. Arr-co te-1 Corporation. \ honc.irredi Horace a, Johneon David K. Hocke ieralci !i. uoidberg* -JuLirnum - A','v,t`V McGCon 2851 '