In the Matter of the Lusk Corporation, Debtors v. Arizona State Tax Commission

This matter is here on the appeal of the Arizona State Tax Commission from a judgment of the district court, affirming a determination of the special master in a corporate reorganization proceeding under Chapter X of the Bankruptcy Act.

It involves two issues, the principal one being whether The Lusk Corporation, one of the corporate debtors included in the proceeding was, during the period under consideration, engaged in Ar-' izona in the business of “contracting” (Ariz.Rev.Stat. § 42-1310(2) (i)) as that term is defined in Ariz.Rev.Stat. § 42-1301(4) and hence was subject to .the “transaction privilege” and “education excise” taxes imposed upon contractors by Ariz.Rev.Stat. §§ 42-1309, subsee. A and 42-1361.

The master concluded that Lusk was not a “contractor” within the purview of Ariz.Rev.Stat. § 1310(2) (i); he recommended that the Commission’s claim be rejected. This conclusion was predicated upon elaborate findings to the effect that Lusk “was not engaged in the construction or building business” but instead was engaged in developing real estate; that Lusk did not “directly or indirectly” build the dwelling houses upon lots in the subdivision which .it developed, but…