National Carbide Corp. v. Commissioner of Internal Revenue (336 U.S. 422)
U.S. Supreme Court · decided March 28, 1949 · Supreme Court Database (Spaeth)
- Citation
- 336 U.S. 422 · 69 S. Ct. 726
- Decided
- March 28, 1949
- Term
- October Term 1948
- Vote
- 9–0
- Majority author
- Justice Vinson
- Issue area
- Federal Taxation
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Mr. Chief Justice Vinson delivered the opinion of the Court. Petitioners are three wholly owned subsidiaries of Air Reduction Corporation (Aireo). They seek a determination of the question whether deficiencies in income and declared value excess profits taxes for the year 1938 found by the Commissioner of Internal Revenue are properly chargeable to them. Their contention is that they are corporate agents of Aireo, that the income from their operations is income of Aireo, and that income and excess profits taxes must be determined on that basis. By a series of combinations and dissolutions of previously acquired subsidiary companies, Aireo had, prior to 1938, reduced the number of its subsidiaries to four. All operated strictly in accordance with contracts with Aireo. The subsidiaries were utilized by Aireo as operating companies in the four major fields of operation in which it was engaged. Air Reduction Sales Company carried on the manufacture and sale of the gaseous constituents of air; National Carbide Corporation, the manufacture and sale of calcium carbide; Pure Carbonic, Inc., the manufacture and sale of carbon dioxide; and Wilson Welder & Metals Co., the manufacture and sale of welding machines, equipment and supplies. The contracts between Aireo and its subsidiaries provided, in substance, that the latter were employed as agents to manage and operate plants designed…
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