Yes, No, Yes, Etc.

So perplexing are the tax laws of the U.S. that even the lofty Federal Court of Claims in Washington can contradict itself in interpreting them. Last week the court wrestled once more with the knotty issue of taxes on the warranties that manufacturers sell to guarantee that their appliances, cars, pens, etc. remain in good working order. The question: Should manufacturers pay the usual 10% excise tax on the price of the warranties? In 1954 and again in 1956, the Court of Claims answered yes. In 1957 it reversed itself, ruled no. Last week, turning full circle, it ruled yes again, said that manufacturers must continue to pay the 10% excise tax on the price of warranties (which usually amounts to about 2% of the purchase price) as well as on the price of the product.

All four decisions came on General Motors Corp.'s petition for a $2,590,000 refund of excise taxes paid from 1945 to 1951 on Frigidaire appliance warranties. Even the latest ruling is not the last of the matter. G.M. can appeal its case to the U.S. Supreme Court, which may take another several years before a final decision is reached. Until then, both the law and a docket of 30 other tax refund cases involving hundreds of millions of dollars would remain precisely where they have been for the past four years--up in the air.

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