Boylan v. United States,
77 U.S. 58 (1869)

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U.S. Supreme Court

Boylan v. United States, 77 U.S. 10 Wall. 58 58 (1869)

Boylan v. United States

77 U.S. (10 Wall.) 58


1. Under the 96th section of the Excise Act of June 30, 1864, exempting from a tax laid on sundry articles of dress by section 95, clothes manufactured of materials on which a duty had been paid, unless "the in creased value" exceeds five percent ad valorem, such "increased value " is to be ascertained by a comparison between the market value of the materials at the time the tax on them was paid, with the market value of the manufactured goods at the time of the assessment of the tax upon them.

2. When the sale and delivery is to the government which imposes and collects the tax, the market value of the goods may be well enough determined by the price which the government agrees to pay, and the contractor agrees to receive.

By the 95th section of the Act of June 30, 1864, a tax of five percent was imposed on ready-made clothing, and sundry other articles of dress. [Footnote 1] But the 96th section of the same act exempted from the tax goods manufactured of materials on which duties had been paid, unless the increased value of such goods exceeded five percent ad valorem. [Footnote 2]

These provisions of the statute being in force, Boylan, a manufacturer of clothing, on the 10th of May, 1864, entered into a contract with the United States to manufacture and deliver to it at times specified, a certain amount of army clothing, for which he was to receive a price fixed. He did

Page 77 U. S. 59

manufacture and deliver the clothing during the month of October, 1864, under his contract, and received the contract price from the United States. These goods were manufactured of materials, the cash value of which, in open market, was more than the price received by him for the goods. But the cost of manufacturing the goods was more than five percent of their value when manufactured. Boylan, in his return of manufactures for October, 1864, under the internal revenue laws, made return of the goods. An internal revenue tax of five percent ad valorem upon the price received by Boylan for the goods having been assessed, the suit below, an amicable one, was brought to recover the amount of the tax. The materials of the manufactured goods had been previously assessed under the internal revenue law, and the tax on them had been duly paid: though when paid was not shown. Judgment having been rendered in favor of the United States, Boylan brought the case here to reverse it, the general question being whether the assessment was made in accordance with the proper construction of the act of Congress -- or, in other words, by what rule the "increased value," spoken of in the 96th section of the act, was to be ascertained.

The case did not show what was the actual cost to Boylan of the materials, nor so whether the price agreed on for the clothes was greater than the actual cost by more than five percent ad valorem.

Page 77 U. S. 61

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