National Muffler Dealers Assn., Inc. v. United States

PETITIONER: National Muffler Dealers Assn., Inc.
RESPONDENT: United States
LOCATION: Collision between Mr. Montrym’s car and motorcycle

DOCKET NO.: 77-1172
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 440 US 472 (1979)
ARGUED: Nov 27, 1978
DECIDED: Mar 20, 1979

ADVOCATES:
Myron P. Gordon - for petitioner
Stuart A. Smith - for respondent

Facts of the case

Question

Media for National Muffler Dealers Assn., Inc. v. United States

Audio Transcription for Oral Argument - November 27, 1978 in National Muffler Dealers Assn., Inc. v. United States

Audio Transcription for Opinion Announcement - March 20, 1979 in National Muffler Dealers Assn., Inc. v. United States

Warren E. Burger:

The judgment and opinion of the Court in No. 1172, National Muffler Dealers against the United States will be announced by Mr. Justice Blackmun.

Harry A. Blackmun:

This case is a tax case coming to us by writ of certiorari to the United States Court of Appeals for the Second Circuit.

Just last week, the Washington Post said that we took rarely any tax cases, this is one, and we've had several this term.

The issue is whether a trade organization for muffler dealers that confines its membership to dealers franchised by Midas International Corporation and its activities to the business of Midas' mufflers is entitled to exemption from federal income tax as a business league under Section 501 (c) (6) of the 1954 Internal Revenue Code.

The pertinent Treasury Regulation state that a business league is an organization of the same general class as the chamber of commerce or a board of trade and to be exempt should have its activities directed to the improvement of business conditions of one or more lines of business.

The District Court held that the Midas muffler franchisees do not constitute a line of business and accordingly that petitioner was not a business league within the meaning of the statute and thus was not entitled to exemption.

The Court of Appeals affirmed expressly disagreeing with a decision of the Seventh Circuit a few years ago concerning Pepsi-Cola Bottlers' Association, a similar trade organization and we granted certiorari to resolve the conflict between the Circuits.

In an opinion filed today with the clerk, we in turn affirm the Court of Appeals and hold that the petitioner is not entitled to the claimed that tax exemption as a business league within the meaning of Section 501 (c) (6).

Mr. Justice Stewart has filed a dissenting opinion and is joined in that by Mr. Justice Rehnquist and Mr. Justice Stevens.

Warren E. Burger:

Thank you Mr. Justice Blackmun.