Rev. Rul. 54-44

Advice is requested whether a grain warehouse or elevator that is licensed under the United States Warehouse Act constitutes a public grain warehouse within the meaning of section 124B of the Internal Revenue Code.

In the instant case, the taxpayer is a processor of mixed feeds and the operator of a grain warehouse that is licensed under the United States Warehouse Act, 39 Stat. 486, as amended. It uses its present storage capacity both for public storage and for storage of grain for its own account and, to the limits of its capacity, accepts all grain offered for storage. The taxpayer plans to double its storage facilities by constructing a grain elevator which will be permanently equipped for receiving, elevating, conditioning, and loading out grain. The new grain elevator will also be licensed under the United States Warehouse Act. Since its existing facilities provide adequate storage for its own inventories, the taxpayer will not operate the new facility principally to store its own grain; however, some portions of the facility may, from time to time, be used for the storage of its own grain.

Section 124B of the Code provides, in part, as follows:

(d) DEFINITION OF GRAIN STORAGE FACILITY.--For the purposes of this section, the term "grain storage facility" means--

(1) Any corn crib, grain bin, or grain elevator, or any similar structure suitable primarily for the storage of grain, which crib, bin, elevator, or structure is intended by the taxpayer at the time of his election to be used for the storage of grain produced by him (or, if the election is made by a partnership, produced by the members thereof); and

(2) Any public grain warehouse permanently equipped for receiving, elevating, conditioning, and loading out grain, * * *

It is held that a grain elevator constructed after December 31, 1952, and on or before December 31, 1956, under the circumstances indicated above, constitutes a grain storage facility entitled to the benefits of section 124B of the Internal Revenue Code.