Chapter I-Cost of Living Council Council Ruin selling price-cost of liquor and trans. total cost Ruling $28.00 2.00 60.00 If during the base period Citizen did not charge for delivery and considered NG COUNis base period CIPM to be: The base price is now determined by . 6, 1972] adding the 100 percent CIPM to $28, the ouncil Ruiz cost of liquor during the freeze base period $28+ (100 percent)=$56. While SERVICE Citizen had a base price of $60 for liquor NCREASE which included delivery to the retail customer, he now has a base price of $56 for undelivered liquor. is a liquor to January 1 retailers at ttorney gen ka issued a y 1, 1972, li Onger deliver teither pick independer Citizen has n ult is that th up due to t me price for ery charge! 5 not cont duction in s CFR 300.13 of the prope This ruling has been approved by the General Counsels of the Price Commission and the Cost of Living Council. [37 F.R. 18179, Sept. 8, 1972] [Cost of Living Council Ruling 1972-112] EXCISE AND SALES TAXES Facts. Firm A is a manufacturer and retail distributor of distilled spirits. It costs Firm A $10.50 per gallon to produce its product. The Federal Government has imposed an excise tax "on all distilled spirits in bond or produced in *** the United States * * *" of $10.50 per gallon (section 5001 of title 26 United States Code). Firm A pays this tax and sells his product for $25.20 per gallon which includes a mark-up of $4.20 per gallon. In a particular fiscal year Firm A produced 5 million gallons of spirits. Its retailing division sold the entire output and collected $26.46 per gallon from customers which included a 5-percent State sales tax which Firm A collected and turned over to the State. Issue. What moneys collected by Firm A does it use in calculating its price category (tier status) and its profit margin? Ruling. A firm having annual sales or revenues from whatever source derived (with certain exceptions not relevant to this question) of $100 million or more during its most recent fiscal year is a Tier I firm. Economic Stabilization Regulations, 6 CFR 101.11 (1972). Firm A collected a total of $132,300,000 (5 million gallons X $26.46 per gallon) from customers which covered the following costs: The sales tax is a tax imposed on the customer based on retail selling price which is collected by Firm A. The State requires Firm A to collect the tax and to turn it over to the State. An increase in the State sales tax rate could not be used as an allowable cost by Firm A to justify a price increase. State sales taxes collected under an agency arrangement would not be part of Firm A's annual sales or revenues nor would it enter the profit margin calculation of the firm. Cost of Living Council Ruling 1972-89, 37 F.R. 15011 (1972). The remaining $126 million would be used by Firm A to calculate its tier status and would enter his profit margin calculation. The excise tax is imposed on the production of distilled spirits whether the product is ever sold or not. It is a cost of doing business. It is not a tax imposed directly upon the consumer. An increase in the amount of the excise tax would be an increase in allowable cost and could be used to justify a price increase. Price Commission Ruling 1972127, 37 F.R. 7351 (1972). Firm A is a Tier I firm with annual sales or revenues of $126 million which amount would also be used in calculating its profit margin. Price Commission Ruling 1972-19, 37 F.R. 766 (1972). This ruling has been approved by the General Counsels of the Price Commission and the Cost of Living Council. [37 F.R. 18180, Sept. 8, 1972] [Cost of Living Council Ruling 1972-113] LUMBER COMPANY PERFORMING THE FUNCTIONS OF A GENERAL CONTRACTOR Facts. X lumber company, on May 1, 1972, hires Y subcontractor to do a remodeling job on Z's home. X lumber company does not perform any of the actual on-job labor itself; however, it performs the functions of a general contractor in that it: 1. Submits a bid estimate to Z; 2. Obtains and secures Z's commitment to perform the work; 3. Obtains Y subcontractor to perform the remodeling functions; 4. Provides materials for that function; 5. Collects and retains all moneys received as payment for such function; 6. Pays Y subcontractor on an hourly basis for all labor performed. Issue. Is X lumber company engaged in construction as that term is used for purposes of determining qualification for the small business exemption? Ruling. Yes. Executive Order No. 11588, 3 CFR Part 147 (1972 Comp.), provides that: (T)he term "construction" shall mean for the purposes of this order (1) all work relating to the erecting, construction, altering, remodeling, painting, or decorating of installations such as buildings, bridges, highways, and the like, when performed on a contract basis * * *. The above remodeling job is performed on a contract basis between an independent contractor and his subcontractor; therefore, X lumber company is engaged in construction as that term is used in the economic stabilization regulations, 6 CFR 101.51 (a) (2) (iii) (1972). Hence, the company does not qualify for the small business exemption. This ruling has been approved by the General Counsel of the Cost of Living Council. [37 F.R. 19620, Sept. 21, 1972] [Cost of Living Council Ruling 1972-114' DEFINITION-CUSTOM MADE LEATHER GOODS Facts. A wishes to obtain a leathe upholstered chair, custom made to individual order. B makes the chair in A and the total cost to B is comprise of one-third for the nonleather co ponents (filling and frame which c sists of wood, nuts, bolts, etc.) and twi thirds for the leather components. Issue. Is B's sale to A of the custommade leather upholstered chair exemp from the controls of the Economic Sta bilization Program? Ruling. No. Economic Stabilizatic: Regulation § 101.34 (c) (1) (1) exempt from the wage and price controls leather goods when custom made to individual order. 6 CFR 101.34 (1972). A product cannot be considered & "leather good" if a major part of the product consists of nonleather compo nents. In a situation such as this where the nonleather components comprise one-third of the cost of the final product, the nonleather components are a major part of the final product; therefore, the custom made leather uphol stered chair is not exempt from the price controls. This ruling has been approved by the General Counsel of the Cost of Living Council. [37 F.R. 19620, Sept. 21, 1972] [Cost of Living Council Ruling 1972-115] SMALL BUSINESS EXEMPTION Facts. The ABC Electrical Supply Co. is engaged in the retail sale of electrical supplies and associated products. The firm has 12 employees, none of which are covered by a master employment contract. Although the ABC Electrical Supply Co. is not generally in the construc tion business it occasionally receives requests for "on-site" electrical work in connection with materials it sells. The company had eight or nine such requests during 1971 and sent two employees to perform the requested work in each instance. The company has received no such requests yet in 1972. Issue. Whether a firm that was not engaged in construction work on the effective date of Economic Stabilization Regulations, 6 CFR 101.51(a) (2) (ii) (1972), but which was engaged in construction work previously, qualifies for the small business exemption? ? Cound Buzuling. V-CUSTO Section 101.51 (a) (2) (iii), tes in part that the small business HER GOO mption shall not be applicable to "a "n which on the effective date of this es to gulation was engaged in construccustom n *." In determining whether or B makes: t a given firm was "engaged in conOst to Buction" on the effective date of this the regulation, the controlling factor is ad fra lether or not such firm held itself out be in the construction business on that te. If so, the firm would be considered be "engaged in construction" notwithDistered anding the fact that it was not physiof the Elly engaged in construction activity on he effective date of the regulations. In the above fact situation, if the ABC , bolts, e her comp ? to Ad onomic S 34(c) (1 price com n made *: 4 (1972). not be c a major of nonlestie ation suc Electrical Supply Co. ceased to hold itself out as a firm engaging in construction activity prior to May 2, 1972, it would not be considered as a company "engaged in construction" and would qualify for the small business exemption. However, if ABC held itself out as ready to engage in construction on the effective date of the regulations, but had just not received any business, it would be "engaged in construction" and thus not eligible for the small business exemption. This ruling has been approved by the General Counsel of the Cost of Living Council. [37 F.R. 19620, Sept. 21, 1972] Subpart A-Organization [Reserved] Subpart B-Public Information 200.20 Availability of records; exceptions. AUTHORITY: The provisions of this Part 200 are issued under the Economic Stabilization Act of 1970, as amended (Public Law 91-879, 84 Stat. 799; Public Law 91-558, 84 Stat. 1468; Public Law 92-8, 85 Stat. 13; Public Law 92-15, 85 Stat. 38; Public Law 92-210, 85 Stat. 743), Executive Order 11627 (86 F.R. 20189, October 16, 1971), as amended. Cost of Living Council Order No. 3 (36 F.R. 20202, October 16, 1971), and 5 U.S.C. 552, unless otherwise noted. Subpart A-Organization [Revised] Subpart B-Public Information SOURCE: The provisions of this Subpart B appear at 87 F.R. 2479, Feb. 1, 1972, unless otherwise noted. § 200.20 Availability of records; excep tions. (a) In general. All documents and exhibits filed by any party with the Pay Board in the course of its proceedings are part of the records of the Board, available for inspection and copying by members of the public, except to the extent and in the manner specified in this subpart, and except to the extent such information is of the nature specified in 5 U.S.C. 552(b) (1)−(9). However, the Chairman of the Pay Board, or his delegate, is authorized at his discretion to make any record enumerated in 5 U.S.C. 552(b) (1)–(9) available for inspection if he deems disclosure to be in the public interest, and disclosure is not otherwise prohibited by law. (b) Identifying details omitted; authority to disclose. Information furnished to requesting members of the public may have identifying details omitted to avoid the possibility of violations of 18 U.S.C. 1905. That statute imposes criminal penalties for the dis |