COWEN, Chief Judge
(delivered the opinion of the court):
This is a suit for refund of corporate income taxes, plus interest, arising out of the disallowance by the Commissioner of Internal Revenue of certain deductions for business expenses on plaintiff’s 1953, 1954, 1955 and 1956 corporate income tax returns.
The issue in this action is whether those disallowed items, which represent the expenses incident to the entertainment of, and gifts to, public officials, are deductible as ordinary and necessary business expenses under 26 U.S.C. (I.R. C.1939) § 23(a) (1) (A) (1952 Ed.) 1 and 26 U.S.C. (I.R.C.1954) § 162 (1958 Ed.) 2, because those expenditures contravene the public policy of the State of Iowa.
Plaintiff is an Iowa corporation with principal offices in Des Moines. Its principal business is the sale and servicing of road building and other construction machinery. It is an authorized distributor for Allis-Chalmers Co., whose products represent a majority of plaintiff’s sales. During the tax years in question, plaintiff’s sales territory covered a large part of the State of Iowa.
Seventy percent of plaintiff’s total sales for the 4 years, 1953-1956, or about $4,500,000, was attributable to the sale of new or used construction machinery. Of this amount, two-thirds represented purchases by non-governmental sources and one-third consisted of sales to municipal, county, or State agencies in Iowa.
To foster sales of its merchandise, plaintiff employed a staff of salesmen who traveled extensively throughout the State of Iowa making periodic calls on potential purchasers, both private and governmental.
During the course of these calls, plaintiff’s salesmen often took the private customers, as well as the Government officials to lunch. In addition, the salesmen provided entertainment for and made gifts to potential buyers. The exact nature of these items will be described below. The Commissioner of Internal Revenue allowed as ordinary and necessary business expenses all of the expenditures attributable to the solicitation of business from non-governmental sources, but he disallowed all expenses attributable to the entertainment of, and gifts for, public officials.
The nature of the expenditures are summarized in the categories listed below.
1. Fishing trips. Potential buyers were taken in both large and small groups, accompanied by plaintiff’s salesmen, on fishing trips to northern Minnesota. The salesmen selected the persons who were included in each trip.
2. Other trips. Prospective buyers were taken to various midwestem cities for the purpose of visiting the plants of plaintiff’s suppliers and/or attending football or baseball games.
3. Conventions. At general contractors’, State officials’ and local officials’ conventions, plaintiff, along with other firms similarly situated, would make financial contributions to help defray convention costs, and, in return, would be [615]*615listed as a convention sponsor. During the conventions, plaintiff would sometimes give luncheons and/or maintain a hospitality room.
4. Tickets for Athletic Events and the State Fair. Plaintiff made available for distribution by its salesmen tickets to athletic events. At its State Fair exhibit, plaintiff distributed grandstand tickets to potential buyers visiting the exhibit.
5. Dinners. During the course of their regular visits to potential buyers, plaintiff’s salesmen often took them to lunch or dinner. Often, salesmen of competing firms would jointly take the customer to lunch or dinner and the cost of the meals would be divided among the salesmen of the various companies.
6. Golf tournaments. Plaintiff sponsored an annual golf tournament for employees of the Iowa State Highway Commission.
7. Christmas Gifts. Christmas gifts, which usually cost less than five dollars, were given to potential buyers. These gifts contained plaintiff’s name and an appropriate holiday greeting.
All of the gifts, trips, meals, tickets, and entertainment were furnished without distinction to representatives of potential buyers, both in and out of Government. Their distribution was widespread and no distinction was made on the basis of actual past purchases, nor were they conditioned on a particular future transaction.
Plaintiff and other businesses similarly situated do little conventional advertising. It is the practice to advertise among their limited group of potential buyers by the use of personal contacts, with their attendant niceties, as elaborated above. The record in this case indicates that such expenditures were intended primarily to establish good will for the plaintiff and to familiarize potential purchasers with plaintiff’s products. There is no evidence that the expenditures were used to induce any particular purchase, that any gifts or entertainment were used as reward for a past purchase, or that any particular official was favored by plaintiff’s bounty.
There is little dispute as to the pertinent facts of this case. There also seems to be little doubt that the expenses incurred by plaintiff was of a type prevalent for the business concerned and that they were important to insure the financial success of plaintiff’s business. Therefore, we may conclude that the expenses were “ordinary” and “necessary” in the natural and common meaning of those words. Welch v. Helvering, 290 U. S. 111, 54 S.Ct. 8, 78 L.Ed. 212 (1933). Hence, such expenses were permissible deductions within the purview of Section 162 of the 1954 Internal Revenue Code and its predecessor, unless we find that such expenses are repugnant to a “sharply defined public policy” of the State of Iowa, Tank Truck Rentals, Inc. v. Commissioner, 356 U.S. 30, 78 S.Ct. 507, 2 L.Ed.2d 562 (1958); Commissioner v. Sullivan, 356 U.S. 27, 78 S.Ct. 512, 2 L. Ed.2d 559 (1958); Lilly v. Commissioner, 343 U.S. 90, 72 S.Ct. 497, 96 L.Ed. 769 (1952); Commissioner v. Heininger, 320 U.S. 467, 64 S.Ct. 249, 88 L.Ed. 171 (1943); see generally, Comment, Business Expenses, Disallowance, and Public Policy: Some Problems of Sanctioning with the Internal Revenue Code, 72 Yale L.J. 108 (1962); 4 Merten’s Law of Federal Income Taxation, § 25.131 (1960).
The defendant advances two major contentions: (1) The expenses in question here contravene the provisions of Sections 739.10, 739.11 and/or 741.1 of the Iowa Code Ann. (1950) and are therefore repugnant to the public policy of the State of Iowa; and (2) even if the above statutes are not violated, there is an infringement of some more generalized public policy, which also constitutes a “sharply defined” public policy of the State of Iowa.
I. Iowa Statutory Pattern
Violations of Section 739.10 of the Iowa Code3 entitled “Accepting reward [616]*616for public duty,” and of section 739.11,4 entitled “Corruptly influencing officials” are felonies.
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COWEN, Chief Judge
(delivered the opinion of the court):
This is a suit for refund of corporate income taxes, plus interest, arising out of the disallowance by the Commissioner of Internal Revenue of certain deductions for business expenses on plaintiff’s 1953, 1954, 1955 and 1956 corporate income tax returns.
The issue in this action is whether those disallowed items, which represent the expenses incident to the entertainment of, and gifts to, public officials, are deductible as ordinary and necessary business expenses under 26 U.S.C. (I.R. C.1939) § 23(a) (1) (A) (1952 Ed.) 1 and 26 U.S.C. (I.R.C.1954) § 162 (1958 Ed.) 2, because those expenditures contravene the public policy of the State of Iowa.
Plaintiff is an Iowa corporation with principal offices in Des Moines. Its principal business is the sale and servicing of road building and other construction machinery. It is an authorized distributor for Allis-Chalmers Co., whose products represent a majority of plaintiff’s sales. During the tax years in question, plaintiff’s sales territory covered a large part of the State of Iowa.
Seventy percent of plaintiff’s total sales for the 4 years, 1953-1956, or about $4,500,000, was attributable to the sale of new or used construction machinery. Of this amount, two-thirds represented purchases by non-governmental sources and one-third consisted of sales to municipal, county, or State agencies in Iowa.
To foster sales of its merchandise, plaintiff employed a staff of salesmen who traveled extensively throughout the State of Iowa making periodic calls on potential purchasers, both private and governmental.
During the course of these calls, plaintiff’s salesmen often took the private customers, as well as the Government officials to lunch. In addition, the salesmen provided entertainment for and made gifts to potential buyers. The exact nature of these items will be described below. The Commissioner of Internal Revenue allowed as ordinary and necessary business expenses all of the expenditures attributable to the solicitation of business from non-governmental sources, but he disallowed all expenses attributable to the entertainment of, and gifts for, public officials.
The nature of the expenditures are summarized in the categories listed below.
1. Fishing trips. Potential buyers were taken in both large and small groups, accompanied by plaintiff’s salesmen, on fishing trips to northern Minnesota. The salesmen selected the persons who were included in each trip.
2. Other trips. Prospective buyers were taken to various midwestem cities for the purpose of visiting the plants of plaintiff’s suppliers and/or attending football or baseball games.
3. Conventions. At general contractors’, State officials’ and local officials’ conventions, plaintiff, along with other firms similarly situated, would make financial contributions to help defray convention costs, and, in return, would be [615]*615listed as a convention sponsor. During the conventions, plaintiff would sometimes give luncheons and/or maintain a hospitality room.
4. Tickets for Athletic Events and the State Fair. Plaintiff made available for distribution by its salesmen tickets to athletic events. At its State Fair exhibit, plaintiff distributed grandstand tickets to potential buyers visiting the exhibit.
5. Dinners. During the course of their regular visits to potential buyers, plaintiff’s salesmen often took them to lunch or dinner. Often, salesmen of competing firms would jointly take the customer to lunch or dinner and the cost of the meals would be divided among the salesmen of the various companies.
6. Golf tournaments. Plaintiff sponsored an annual golf tournament for employees of the Iowa State Highway Commission.
7. Christmas Gifts. Christmas gifts, which usually cost less than five dollars, were given to potential buyers. These gifts contained plaintiff’s name and an appropriate holiday greeting.
All of the gifts, trips, meals, tickets, and entertainment were furnished without distinction to representatives of potential buyers, both in and out of Government. Their distribution was widespread and no distinction was made on the basis of actual past purchases, nor were they conditioned on a particular future transaction.
Plaintiff and other businesses similarly situated do little conventional advertising. It is the practice to advertise among their limited group of potential buyers by the use of personal contacts, with their attendant niceties, as elaborated above. The record in this case indicates that such expenditures were intended primarily to establish good will for the plaintiff and to familiarize potential purchasers with plaintiff’s products. There is no evidence that the expenditures were used to induce any particular purchase, that any gifts or entertainment were used as reward for a past purchase, or that any particular official was favored by plaintiff’s bounty.
There is little dispute as to the pertinent facts of this case. There also seems to be little doubt that the expenses incurred by plaintiff was of a type prevalent for the business concerned and that they were important to insure the financial success of plaintiff’s business. Therefore, we may conclude that the expenses were “ordinary” and “necessary” in the natural and common meaning of those words. Welch v. Helvering, 290 U. S. 111, 54 S.Ct. 8, 78 L.Ed. 212 (1933). Hence, such expenses were permissible deductions within the purview of Section 162 of the 1954 Internal Revenue Code and its predecessor, unless we find that such expenses are repugnant to a “sharply defined public policy” of the State of Iowa, Tank Truck Rentals, Inc. v. Commissioner, 356 U.S. 30, 78 S.Ct. 507, 2 L.Ed.2d 562 (1958); Commissioner v. Sullivan, 356 U.S. 27, 78 S.Ct. 512, 2 L. Ed.2d 559 (1958); Lilly v. Commissioner, 343 U.S. 90, 72 S.Ct. 497, 96 L.Ed. 769 (1952); Commissioner v. Heininger, 320 U.S. 467, 64 S.Ct. 249, 88 L.Ed. 171 (1943); see generally, Comment, Business Expenses, Disallowance, and Public Policy: Some Problems of Sanctioning with the Internal Revenue Code, 72 Yale L.J. 108 (1962); 4 Merten’s Law of Federal Income Taxation, § 25.131 (1960).
The defendant advances two major contentions: (1) The expenses in question here contravene the provisions of Sections 739.10, 739.11 and/or 741.1 of the Iowa Code Ann. (1950) and are therefore repugnant to the public policy of the State of Iowa; and (2) even if the above statutes are not violated, there is an infringement of some more generalized public policy, which also constitutes a “sharply defined” public policy of the State of Iowa.
I. Iowa Statutory Pattern
Violations of Section 739.10 of the Iowa Code3 entitled “Accepting reward [616]*616for public duty,” and of section 739.11,4 entitled “Corruptly influencing officials” are felonies. On their face, both statutes are aimed at preventing a public official from receiving, and another from giving him, anything of value in exchange for his performing a specific official act or acts. These sections do not apply to the case at bar. We have adopted the Trial Commissioner’s finding that the entertainment and gifts involved here were not provided with a view to corruptly influencing the recipients nor were they, in any way, conditioned upon the doing of an official act.
Section 741.1 of the Iowa Code5 is broader and provides:
“It shall be unlawful for any agent, representative, or employee, officer or any agent of a private corporation, or a public officer, acting in behalf of a principal in any business transaction, to receive, for his own use, directly or indirectly, any gift, commission, discount, bonus, or gratuity connected with, relating to, or growing out of such business transaction; and it shall be likewise unlawful for any person, whether acting in his own behalf or in behalf of any copartnership, association, or corporation, to offer, promise, or give directly or indirectly any such gift, commission, discount, bonus, or gratuity.” [Emphasis added]
Upon the record before us, we conclude that this statute is aimed at kick-backs in both governmental and non-governmental business transactions and does not, per se, bar entertainment of or gifts to agents of potential customers. The statute refers to “transaction” in the singular, implying that it is aimed at bounties paid in connection with a particular transaction. The enumeration, “gift, commission, discount, bonus, or gratuity”, in this context is an elaboration of types of kick-backs.
We have additional evidence, both affirmative and negative, of the interpretation placed on this statute by the Iowa authorities. We have been directed to no prosecution of a public official under the above-quoted act (or any other act) for simply receiving a gift from a potential seller. Further, of four opinions of the Iowa Attorney General involving the prd Iowa Attorney General involving the predecessors of this section, three6 discuss prohibitions against public officials contracting with a company in which they have a direct or indirect financial interest. This is the situation covered by the case of Bay v. Davidson, 133 Iowa 688, 111 N.W. 25, 9 L.R.A.,N.S., 1014 (1907) cited by defendant. The fourth opinion of the State’s Attorney General7 held that a county official was not precluded from going as the guest of the contractor to [617]*617the latter’s plant to view his equipment, provided the trip was not conditioned on the official’s approval of the sale. A deep concern with self-dealing by public officials and with kick-back arrangements seems to pervade the Iowa statutes. There are at least fourteen8 of these two types of statutes appearing in various chapters of the Iowa Code.
The evidence shows and we have found that the expenditures in issue here were not made as a specific inducement for a particular sale, or as a reward for a particular purchase from plaintiff.
There appears in Chapter 741 of the Iowa Code, in the same chapter as section 741.1, the only section of the Iowa Statutes that purports to ban all gifts to public officials. It provides:
Ҥ 741.6 Institutional officers not to receive gratuities
“No member of the board of control, or officer, agent, or employee thereof, and no superintendent, officer, manager, or employee of any of the institutions under the charge and control of said board, shall, directly or indirectly, for himself or any other person or for any institution under the charge of said board, receive or accept any gift or gratuity from any person or persons, firm, or corporation who are dealers in goods, merchandise, or supplies which may be used in any of said institutions, or from any employee, servant, or agent of such person or persons, firm, or corporation.”
The Iowa Board of Control administers Iowa’s Soldier’s Home, the State hospitals, the State orphanage, the State reformatories, and the State prisons, 11 Iowa Code Ann. § 218.1 (1950).
The significance of this statute is that it demonstrates that the legislature of Iowa knew how to prohibit all gifts from potential Government contractors to State officials. It further appears that the legislature elected to lay such an inhibition only upon a limited class of public officials, i. e., those connected with the eleemosynary institutions enumerated above. We must therefore conclude that the legislature did not intend to bar all public officials from receiving gifts from potential contractors.
Upon the above analysis and the record in this case, we hold that the expenditures by plaintiff did not violate any statute of the State of Iowa. It has not been suggested here that there is any other governmental declaration touching directly on this subject, i. e., executive, departmental, commission regulation, or order.
II. Other Public Policy Considerations
Defendant also asserts that some more generalized concept of public policy, other than that contained in the specific Ian-[618]*618guage of the statutes, renders plaintiff’s expenditures violative of some “sharply defined public policy”.
Defendant’s only citation of Iowa authority, Bay v. Davidson, supra, deals with a different situation than that which appears in the instant case and has been discussed above. This case alone does not declare even by dicta any definitive public policy with respect to entertainment of public officials.
Except for three Tax Court decisions referred to below, the other cases cited by defendant are inapposite. They are from other States or they deal with practices which are in no way comparable to those that are the subject of this action. They involve payments or rewards to Government officials (usually legislators) for their political influence in obtaining a public contract or other favor for the donee, Harden Mortgage Loan Co. v. Commissioner, 137 F.2d 282 (10th Cir. 1943), cert. denied, 320 U.S. 791, 64 S.Ct. 206, 88 L.Ed. 476; Rugel v. Commissioner, 127 F.2d 393 (8th Cir. 1942); Messenger Publishing Co., 10 CCH Tax Ct. Mem. 988 (1947) ail’d without opinion; 168 F. 2d 903 (3d Cir. 1948); William T. Stover Co., Inc., 27 T.C. 434 (1956); T. G. Nicholson, 38 B.T.A. 190 (1938); Easton Tractor & Equipment Co., Inc., 35 B.T.A. 189 (1936); New Orleans Tractor Co., 35 B.T.A. 218 (1936); or they cover situations in which a public official or other person received a kickback, United Draperies, Inc., 41 T.C. 457 (1964); Fred D. Newman, 11 CCH Tax Ct. Mem. 908 (1952); Dixie Machine Welding & Metal Works v. United States, 315 F.2d 439 (5th Cir. 1963), cert. denied 373 U.S. 950, 83 S.Ct. 1679, 10 L.Ed.2d 705.
We are left with those few cases in the Tax Court, that purport, per se, to deny a deduction for entertainment of or gifts to public officials, even in the absence of any indication of wrongdoing. The basis for the disallowance is an unelaborated public policy. Duval Motor Co., 28 T.C. 42 (1957), aff’d on other grounds, 264 F.2d 548 (5th Cir. 1959); Cecil J. Haas, 12 CCH Tax Ct. Mem. 1117 (1953); Raymond F. Flanagan, 47 B.T.A. 782 (1942). We believe these cases to be ini conflict with the Supreme Court’s decision in Lilly v. Commissioner, supra.
In Tank Truck Rentals, Inc. v. Commissioner, supra, the Supreme Court laid down the following test:
“A finding of ‘necessity’ cannot be made, however, if allowance of the deduction would frustrate sharply defined national or state policies proscribing particular types of conduct, evidenced by some governmental declaration thereof.” [emphasis added].
In Lilly v. Commissioner, supra, the' Supreme Court refused to sanction the-disallowance of a business expense deduction for rebates from opticians to> physicians, where the practice was not prohibited by State law, regulation or order, even though the contracts for rebate were unenforceable as against public policy and the practice was condemned by the local professional societies. The Court found no sharply defined public policy evidenced by some governmental declaration.
The instant case is in a similar posture and with a weaker set of facts. Defendant can point to no executive or legislative declaration of public policy that would prohibit the practices of plaintiff in issue. It has cited no court decision in point and has not even presented any quasi-official criticism of the practice. Therefore, we must conclude that the rule in Tank Truck and Lilly controls this case and that, absent a State or national statute or regulation, there exists no sharply defined public policy upon which to ground disallowance of an otherwise permissible business expense deduction.
It is to be noted that the type of expenses incurred by plaintiff were for purposes which are representative of a widespread commercial practice in Iowa and elsewhere. There is no showing that these practices have been objected to by the courts, the executive, or the legislature of Iowa. Even if we assume ad [619]*619arguendo, that plaintiff’s practices violated any Iowa statute, it may well be that Iowa “public policy” is something more than just the wording of a statute.9 It is not uncommon for statutes to derive meaning from long standing executive practice acquiesced in by the legislature. But we need not reach this point.
We conclude that the expenditures incurred by plaintiff in providing gifts to and entertainment for Iowa public officials did not violate any sharply defined public policy of the State of Iowa. We express no approval of the practices herein described, for it is not our function to approve or condemn. The regulation of such practices rests within the sound discretion of the legislature, the executive, and the courts of the State of Iowa.
Plaintiff is entitled to recover the additional taxes and statutory interest paid as a result of the disallowance of the deductions for the years in suit. Judgment for plaintiff is entered to that effect. The amount of recovery is to be determined pursuant to Rule 47(c)(2).