Yellow Cab Co. v. United States

Plaintiff seeks the refund of the telephone service sales tax assessed and collected from it pursuant to Section 3465 of the Internal Revenue Code of 1939, 26 U.S.C. § 3465 , during the period June 16, 1946, to March 21, 1954, on the amount it paid for certain telephone service utilized in the conduct of its business as a common carrier.

The telephone service on which the tax was levied was that furnished to plaintiff by the Pacific Telephone and Telegraph Co. between plaintiff’s headquarters and plaintiff’s numerous taxi stands throughout the metropolitan area- of San Francisco and Alameda counties. The service was provided by means of private lines running from plaintiff’s headquarters to the taxi stands. The majority of the taxi stands were equipped with a telephone with a bell and a device by which a cab driver could signal plaintiff’s headquarters that the stand was occupied. The operators at the switchboard in plaintiff’s headquarters could thus relay requests for taxi service received through the local public telephone service to any occupied stand. When the stand was unoccupied, the telephone there could be used by patrons to request taxi service. The equipment differed…