The Gray Line Company, a Corporation v. R. C. Granquist, District Director of Internal Revenue

Appellant corporation sued in the court below to recover taxes, penalties and interest paid appellee assessed under Section 3469 of the Internal Revenue Code of 1939, Title 26 United States Code. The suit followed a denial by appellee of appellant’s claim for refund provided by Title 28 U.S.C. § 2411 .

During the month involved here, July, 1950, appellant was engaged in the business of “transportation, sightseeing and airport transportation” for hire. One of its activities during that month consisted of the operation of a limousine service for airline passengers alighting from or boarding planes of the Northwest Airlines, Western Airlines and Pan American World Airways between the airports and the downtown area of Portland, Oregon. For the purpose of this discussion we are assuming that only seven-passenger limousines were used. Except on one occasion, mentioned hereafter, on none of the trips were more than seven passengers carried. When not in use the limousines were kept in appellant's garage in Portland.

Under a contract between it and Northwest Airlines, appellant agreed to provide transportation by limousines for Northwest’s passengers to and from Portland Airport and the…