Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 55-21

1955-1 C.B. 540

Caution: Obsoleted by Rev. Rul. 69-227

IRS Headnote

The tax on the transportation of property imposed by section 3475 of the Internal Revenue Code of 1939 does not apply to amounts paid to a carrier by the Post Office Department for the transportation of United States mail.

Full Text

Rev. Rul. 55-21

Advice has been requested by a motor carrier whether it must collect the tax on the transportation of property imposed by section 3475 of the Internal Revenue Code of 1939 with respect to amounts paid to it by the Post Office Department for the transportation of United States mail.

Under the provisions of section 3475(a) of the Code, a tax is imposed upon the amount paid for the transportation of property by rail, motor vehicle, water, or air from one point in the United States to another. Such tax shall apply only to amounts paid to a person engaged in the business of transporting property for hire, including amounts paid to a freight forwarder, express company, or similar person, but not including amounts paid by a freight forwarder, express company, or similar person for transportation with respect to which a tax has previously been paid under that section. Section 3475(b) of the Code provides that the tax shall not apply to amounts paid to the Post Office Department for the transportation of property.

Amounts paid to the Post Office Department for the transportation of mail are considered to be amounts paid to a `freight forwarder, express company, or similar person,' within the meaning of section 3475(a) of the Code, and if it were not for the specific exemption provided by section 3475(b) of the Code such amounts would be subject to the tax on the transportation of property.

Since payments to the Post Office Department are exempt from the tax, such payments are considered the equivalent of payments with respect to which a tax has previously been paid for the purpose of determining the liability of the Post Office Department for tax on its payments to a motor carrier for transporting mail.

Therefore, when the United States Post Office Department in its capacity as `freight forwarder, express company, or similar person,' collects from the sender or addressee the full charges for the transportation of the mail, any amounts paid by the Post Office Department to other persons for transportation services rendered by them in connection with the transportation or delivery of such mail are not subject to the tax on the transportation of property imposed by section 3475 of the Code