Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 56-62

1956-1 C.B. 525

Caution: Obsoleted by Rev. Rul. 69-227

IRS Headnote

The tax on transportation of property imposed by section 4271 of the Internal Revenue Code of 1954 attaches to amounts paid to a carrier for the service of furnishing and installing grain doors or doorway barricades on box cars when such service is furnished in connection with the transportation of grain. However, the tax does not attach to amounts paid to a carrier for the rental of grain doors or lumber for the barricades where such doors or barricades are not installed by the carrier.

Full Text

Rev. Rul. 56-62

Advice has been requested concerning the applicability of the tax on transportation of property imposed by section 4271 of the Internal Revenue Code of 1954 to amounts paid to a carrier in connection with grain doors or doorway barricades installed on box cars used for the transportation of grain.

A shipper transports grain products in bulk in box cars which require doors or doorway barricades for protection of the grain. The expense of furnishing the doors or barricades must be borne by the shipper. He may contract with the carrier to install doors or doorway barricades on the box cars, or he may obtain the doors or the necessary lumber for the doorway barricades from the carrier on a rental basis and install such doors or barricades at his own expense.

Under the provisions of section 143.1(d) of Regulations 113 made applicable to the Internal Revenue Code of 1954 by Treasury Decision 6091, C.B. 1954-2, 47, the term `transportation,' in general, includes accessorial services furnished in connection with a transportation movement, such as loading, unloading, handling, and similar services and facilities.

It is held that the service of furnishing and installing grain doors or barricading the doorways of box cars by a carrier in connection with the transportation of grain is accessorial to the transportation movement, and charges paid by the shipper for such services are subject to the tax on transportation of property. However, where the shipper merely rents from the carrier the grain doors or the lumber for use in barricading the doorways and installs the doors or barricades at his own expense, the rental charge is not a charge for an accessorial service and is not subject to the tax.