Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 54-100

1954-1 C.B. 245

Caution: Obsoleted by Rev. Rul. 69-227

IRS Headnote

Articles made of fur on the hide or pelt which can be worn separately or interchangeably with coats, suits, or other garments are articles of fur within the meaning of section 2401 of the Internal Revenue Code and subject to tax when sold at retail.

A reversible coat made of fur on one side and cloth on the other is an article of which fur is a component material and is subject to tax if the value of the fur component is more than three times the value of the next most valuable component material.

Full Text

Rev. Rul. 54-100

Advice is requested concerning the application of the retailers' excise tax imposed by section 2401 of the Internal Revenue Code to a fur article sold in combination with a cloth coat or fur-trimmed cloth coat when the fur article is attached to the coat in such a manner that it can be readily removed therefrom by the consumer and worn separately. Advice is also requested as to the application of the tax to the sale of a reversible coat made of fur on one side and cloth on the other.

The tax imposed by section 2401 of the Internal Revenue Code applies to the sale at retail of articles made of fur on the hide or pelt, and articles of which such fur is the component material of chief value, but only if such value is more than three times the value of the next most valuable component material.

Articles made of fur on the hide or pelt, such as collars, stoles, capes, ascots, and scarves which can be worn separately or interchangeably with coats, suits, or other garments are articles of fur within the meaning of section 2401 of the Code and are subject to the tax imposed by that section when sold at retail.

If any one of the above-described articles of fur which can be worn separately is attached to a cloth coat or suit and these articles are sold as an ensemble, there is a combination sale of a completely finished fur article and a cloth coat or suit rather than a sale of a fur-trimmed article, and the tax is due on that portion of the retail sales price of the ensemble or unit which is attributable to the fur article. Such portion may be determined by applying to the retail sales price of the ensemble or unit, the ratio which the separate retail sales price of the fur article bears to the sum of the sales prices of both the fur article and the cloth coat. If such articles are not sold separately at retail and do not have established retail sales prices, the comparison may be made on the basis of the costs of the articles.

Where an article which is not in itself a complete fur article and which cannot be worn separately or interchangeably with other garments is sewed by any means to a cloth coat or suit, the sale of such fur-trimmed cloth coat or suit at retail is subject to tax provided the value of the fur component is more than three times the value of the next most valuable component material.

Where an article of fur which can be worn separately or interchangeably with other garments, as described above, is sold in combination with a fur-trimmed cloth coat or suit, for example, a garment having fur cuffs or fur borders, the entire ensemble is subject to tax, if the value of the fur trimming (exclusive of the fur article) is more than three times the value of the next most valuable component. If, in such case, the fur-trimmed garment is nontaxable because the value of the fur trimming is not in excess of three times the value of the next most valuable component, the tax will apply only to the portion of the sale price of the entire ensemble which is allocable to the fur article included in the combination.

The taxability of the hereinbefore-mentioned articles is not affected by the color of the material used as linings for the articles.

A reversible coat made of fur on one side and cloth on the other, the cloth material being of the kind normally used as the outside material of cloth coats, as distinguished from the kind of material ordinarily used in making linings for fur or cloth coats, is considered to be an article of which fur is a component material regardless of whether the fur component is permanently attached to the cloth coat or is detachable. The sale of such a garment is subject to tax if the value of the fur component is more than three times the value of the cloth shall at the time the components are assembled into a finished garment.