Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 60-26

1960-1 C.B. 409

IRS Headnote

The manufacturers excise tax on motor vehicle articles, imposed by section 4061(a)(1) of the Internal Revenue Code of 1954, applies to sales by manufacturers of pallet wagons designed so that they can readily be fitted with floor-plate beds and used on the highway for general hauling. However, pallet wagons designed without beds for exclusive use in fruit orchards and aqua ammonia tank trailers which are not designed for operation on the highway are not taxable trailers within the scope of section 4061(a)(1) of the Code. Therefore, the latter articles are not subject to the tax when sold by the manufacturer thereof.

Full Text

Rev. Rul. 60-26

Advice has been requested whether the manufacturers excise tax on motor vehicle articles applies to sales by manufacturers of the articles described below.

(1) A pallet wagon designed for use in hauling loaded pallets .-This article is a low-constructed trailer-type wagon consisting of a heavy steel frame secured together by cross members and bracing. It is equipped with four wheels which have roller bearings. The vehicle has a hitch adapted for connection to a towing vehicle and has facilities for a tandem hookup. Brakes are optional. Although this wagon is used in hauling pallets of boxed agricultural products on ranches and in orchards, its design is such that it can readily be fitted with a floor-plate bed and used for general hauling over the highway. The state in which the wagon is operated may may or may not required it to be licensed, depending upon the use to which it is put by the purchaser.

(2) A pallet wagon designed for exclusive use in fruit orchards .-This vehicle is a low-constructed semitrailer-type wagon consisting of two heavy steel side beams secured together by cross members, bracing, and a rear cross beam. It is equipped with two wheels and has a hitch adapted for connection to a towing vehicle. It is not equipped with brakes or lights. The vehicle is designed for use in fruit orchards for hauling boxed fruit on pallets. It has no bed and is not adaptable to general hauling in the form in which it is manufactured. To adapt it for highway use, it would be necessary to build a platform or bed and otherwise reconstruct the wagon.

(3) An aqua ammonia tank trailer .-This vehicle consists of a steel framework with a tank mounted thereon which is elevated 51 inches from the ground. It is equipped with four wheels and is 56 inches in width. The tank trailer is used to apply aqua ammonia fertilizer to the ground on farms and ranches.

Section 4061(a)(1) of the Internal Revenue Code of 1954 imposes a tax upon sales by the manufacturer, producer, or importer of certain enumerated motor vehicle articles, including truck and bus trailer and semitrailer chassis and bodies.

Revenue Ruling 54-506, C.B. 1954-2, 408, holds, in part, that farm wagons which are primarily designed and constructed for use on farms, although they may be incidentally used on the highway, are not trailers within the meaning of section 4061(a) of the Code and, therefore, are not subject to tax when sold by the manufacturer.

The pallet wagon described in (1) above is designed so that it can readily be fitted with a floor-plate bed for use on the highway for general hauling. Accordingly, it is held that such pallet wagon is a taxable trailer within the meaning of section 4061(a)(1) of the Code. Therefore, sales of such article by the manufacturer thereof are subject to the tax imposed by that section.

However, neither the pallet wagon described in (2) above, which is designed without a bed for exclusive use in fruit orchards, nor the aqua ammonia tank trailer which is designed for applying fertilizer to the ground, described in (3) above, are considered taxable trailers within the scope of section 4061(a)(1) of the Code, since they are primarily designed and constructed for use on farms and are not designed for transporting loads over the highway. Therefore, they are not subject to tax when sold by the manufacturer thereof.