Tomato Suppliers Urge Court to Allow Deductions for Repair Costs

Suppliers for 40% of the US’s ingredient tomato paste and diced tomato markets urged the Ninth Circuit to revive their claims to deduct the costs of reconditioning their tomato-processing facilities from their taxes.

The IRS issued adjustments to partnerships Liberty Packing Co. and the Morning Star Packing Co. for tax years 2008-2011 that didn’t allow them to deduct their facility refurbishment costs from their taxes because they weren’t fixed and hadn’t yet been paid. The companies had sought to include the amounts in their deductible costs of goods sold.

The US Tax Court decided in 2021 that Liberty Packing had ...