Sperry and Hutchinson Co. v. Commissioner
No federal depreciation decision was found under Sperry and Hutchinson Co. v. Commissioner. The opened Sperry & Hutchinson tax case is a 1974 Oregon Supreme Court decision on whether interest from the company's investment securities is apportioned to Oregon. It does not classify building components.
Educational information, not tax advice.
Updated 2026-10-14
Key takeaways
- Sperry and Hutchinson Co. v. Commissioner was not found as a federal depreciation opinion.
- The 1974 Oregon decision apportions interest from trading-stamp investments. It does not set a recovery period.
- The 1972 Supreme Court trading-stamp case is an antitrust decision, not a tax decision.
- Educational information, not tax advice.
Case record
- Court
- Oregon Supreme Court
- Citation
- 270 Or. 329, 527 P.2d 729 (1974)
- Decision date
- 1974-11-05
- Facts
- Sperry & Hutchinson Company issued trading stamps to retailers and redeemed them for merchandise. It invested the float from stamp sales in interest-bearing securities. The Oregon Department of Revenue included interest from those securities in the income apportioned to Oregon. The company appealed from the Oregon Tax Court. The securities fell into two groups: long-term holdings kept as an investment of surplus, and short-term holdings kept so the stamp business could meet redemption demands.
- Issue
- Whether interest earned on the company's investment securities was business income apportionable to Oregon, or nonbusiness income allocated elsewhere.
- Holding
- Interest on the long-term investment securities was not apportionable to Oregon. Interest on the short-term securities, which were held to supply working capital for the trading-stamp business, was apportionable. The case is a state apportionment decision. It does not decide a federal depreciation class.
- Reasoning
- Oregon looked at the connection between the investment and the stamp business. Money held so the company could redeem stamps was part of that business. Money held as a longer investment was not pulled into the apportionment base merely because the company earned it. That distinction is about where income is taxed, not about the recovery period of a building, a fixture, or a stamp-redemption center.
- Relevance to cost segregation
- The inventory caption says "v. Commissioner," which is the federal tax caption. The decision that was opened is Sperry & Hutchinson Co. v. Department of Revenue, decided by the Oregon Supreme Court on November 5, 1974, on appeal from the Oregon Tax Court. FTC v. Sperry & Hutchinson Co., 405 U.S. 233 (1972), is an antitrust case about trading stamps and is not a tax case. Neither opinion supports a cost-segregation class. Classification still comes from Hospital Corporation of America, Whiteco, Scott Paper, and Treas. Reg. §1.48-1.
The inventory title on this page is Sperry and Hutchinson Co. v. Commissioner. A search for a federal income-tax opinion under that caption did not locate a depreciation or cost-segregation decision. Sperry & Hutchinson was the trading-stamp company. That business history does not create a holding about buildings.
The tax decision that was opened is Sperry & Hutchinson Co. v. Department of Revenue, 270 Or. 329, 527 P.2d 729, decided by the Oregon Supreme Court on November 5, 1974. The caption is the state revenue department, not the Commissioner of Internal Revenue. The appeal came from the Oregon Tax Court. The question was whether interest on the company's securities was business income that Oregon could apportion.
The company sold stamps to retailers and later redeemed them for merchandise. Between sale and redemption it held the money and invested it. The court separated the portfolio. Interest on long-term securities, held as an investment of surplus, was not apportioned to Oregon. Interest on short-term securities, held so the stamp business would have cash for redemptions, was apportioned. The line is the connection between the asset and the trading-stamp business.
That line is easy to misread as a depreciation rule. It is not. The court was deciding which interest entered the Oregon sales-factor apportionment base. It did not decide the useful life of a redemption center, a warehouse, a display fixture, or any other tangible asset. It did not apply section 167, section 168, or the structural-component regulation. A cost-segregation schedule that cites Sperry & Hutchinson for a 5-year or 15-year class is citing the wrong case.
A second well-known Sperry & Hutchinson opinion is FTC v. Sperry & Hutchinson Co., 405 U.S. 233 (1972). That case is about the Federal Trade Commission's power over the company's trading-stamp practices. It is an antitrust and administrative-law decision. It contains no depreciation holding, and it should not be cited on a cost-segregation memo.
A different person, Hutchinson, has a 2001 Tax Court case about a real-estate developer and Rev. Proc. 92-29. That petitioner is not the stamp company. This page does not use that case. Mixing the names would attach a developer ruling to the wrong taxpayer.
For classification, use Hospital Corporation of America v. Commissioner for the investment-credit test under MACRS, Whiteco Industries for the permanence factors, and Scott Paper for the limits of allocating electrical cost by function. Those opinions decide property class. This page decides only that the inventory caption should not be filled with a guessed stamp-company depreciation holding.
CostSeg SI describes extraction, classification, estimation, and review as a proposed Super Intelligence workflow. The Oregon interest case is not an example of that workflow, and this site does not claim those steps are an operating system. Educational information, not tax advice.
What to write in a citation
If the Oregon case is relevant to a state-tax question, cite Sperry & Hutchinson Co. v. Department of Revenue, 270 Or. 329 (1974), and describe the interest split. Do not retitle it "v. Commissioner" and do not place it in a federal depreciation string cite.
If the question is the recovery period of a building component, leave Sperry & Hutchinson out. The supporting authorities are the classification cases and Treas. Reg. §1.48-1, which are linked from this page.
Why the page is still on the site
The 187-page inventory includes this URL. Leaving it blank made the library look unfinished. Filling it with a made-up holding would have been worse. The text states the caption that was searched, the decision that was opened, and the limit of that decision.
A reviewer can still decide to retitle the URL later. Until that decision, the page is the record of the search. It is source-checked against the Oregon opinion that was opened. It is not an expert review, and it is not client approval.
Verification. Opened the Oregon Supreme Court opinion in Sperry & Hutchinson Co. v. Department of Revenue, 270 Or. 329 (November 5, 1974). No federal opinion titled Sperry and Hutchinson Co. v. Commissioner on depreciation was located. Hutchinson v. Commissioner, 116 T.C. 172 (2001), is a different taxpayer and is not used here.
Sources
- 1Sperry & Hutchinson Co. v. Department of Revenue, 270 Or. 329, 527 P.2d 729 (1974)(opens in a new tab)
Oregon Supreme Court, November 5, 1974. State apportionment, not a federal Commissioner case.
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