Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 57-4

1957-1 C.B. 378

Section 6011 -- Return Filing Requirement

Caution: Obsoleted by Rev. Rul. 69-227

IRS Headnote

The tax imposed by section 4191 of the Internal Revenue Code of 1954 on the sale by the manufacturer, producer, or importer of business machines applies to the sale of pencil sharpeners designed to be fastened to a desk, table, etc., but does not apply to the sale of pocket size pencil sharpeners, or to the sale of pencil pointers which sharpen the lead only.

Full Text

Rev. Rul. 57-4

Advice has been requested concerning the applicability of the manufacturers excise tax on business machines to the sale by the manufacturer, producer, or importer of several types of pencil sharpeners and to pencil pointers.

These articles are described as follows:

(a) A pencil sharpener designed especially for draftsmen. This sharpener removes the wood from the pencil and may be adjusted to produce a blunt, medium, or hairline or needle point. It is constructed so that it may be fastened to a desk, table, etc.

(b) The ordinary pencil sharpener designed primarily for office, school, or home. This sharpener also removes the wood from the pencil, but it produces only one size of point. It likewise is constructed so that it may be fastened to a desk, table, etc.

(c) A pocket size pencil sharpener. This sharpener is approximately one inch long and contains a cutting blade against which the pencil is manually rotated to remove the wood and produce a point on the lead.

(d) A pencil pointer designed solely to point the lead in drafting pencils. It is used for both the mechanical pencils with loose lead and the wood drafting pencils used by draftsmen. However, it does not cut the wood of the wood pencils but operates solely on the exposed pencil lead, and will produce anything from a blunt to a hairline or needle point.

Section 4191 of the Internal Revenue Code of 1954 imposes a tax on the sale by the manufacturer, producer, or importer, of certain business machines, including pencil sharpeners. A pencil sharpener of the type taxable under section 4191 of the Code is considered to be one designed not only to sharpen the lead of pencils but also to cut or trim the wood of wood pencils.

It is held that the pencil sharpeners of the type described in (a) and (b) above come within the category of pencil sharpeners contemplated by section 4191 of the Code, and the sale thereof by the manufacturer, producer, or importer, is subject to the tax imposed by that section. However, even though the pocket size pencil sharpener described in (c) above cuts or trims the wood of wood pencils, it is not considered to be a pencil sharpener of the type contemplated by the Code, and therefore, the sale by the manufacturer of such a pencil sharpener is not taxable.

It is further held that since the pencil pointer described in (d) above does not cut or trim the wood of wood pencils, it is not a pencil sharpener within the meaning of section 4191 of the Code and is not subject to the tax imposed by that section.