Nordby Supply Company v. United States

The United States appeals from a judgment in favor of the Nordby Supply Co. (Nordby), finding Nordby entitled to a refund of $2,714.25 for taxes paid. We reverse and remand.

Nordby imported and sold fishing lures under the trade name “Husky”. The lures were packaged without hooks in groups of ten. Each package was marked “Designed and Sold for Commercial Fishing Only”. In all other respects, the lures were identical to lures used in recreational fishing. Commercial fishermen purchased 80% of these lures.

Nordby paid the excise tax imposed on importers and manufacturers of fishing lures under Int.Rev.Code § 4161(a), and sued for a refund. The district court held that the tax applied to sport fishing equip ment only, and not to commercial fishing equipment, and awarded Nordby a refund of 80% of the tax paid.

The language of § 4161(a) does not distinguish between sport fishing and commercial fishing. But the district court cited three reasons for distinguishing the two kinds of fishermen for tax purposes. First, the court pointed out that § 4161(a) is in a subchapter of the Code labeled “recreational equipment” and a part entitled “sporting goods”. Second, the court believed that…