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  3. Rauscher, Pierce, Refnes, Inc.

Rauscher, Pierce, Refnes, Inc.



Taxpayer is a securities broker-dealer.  Taxpayer protested assessment of gross receipts tax, claiming its receipts from dealer concessions for its role in handling purchases of mutual fund shares for its customers are exempt as receipts from the sale of securities pursuant to Section 7-9-25, or alternatively, that they are not gross receipts as defined at Section 7-9-3(F).  Additionally, Taxpayer argued that its receipts from “trails” or 12(b)(1) fees were not gross receipts from performing services and were not subject to gross receipts tax.  Held that although taxpayer did not act as an agent for its customers in handling mutual fund purchase transactions, the receipts did amount to commissions or fees from acting as a broker and are gross receipts as defined in Section 7-9-3(F) and thus are not receipts from the sale of securities.  Additionally, the trails are receipts from performing the service of encouraging its clients to retain their holdings of mutual funds.  Protest denied.