Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 62-33

1962-1 C.B. 202

IRS Headnote

At the request of purchasers, a manufacturer of taxable automobile batteries, modifies such batteries by cutting or removing the standard `S.A.E. type taper' terminals and `burning on ' special terminals. Such modifications do not change the basic characteristics of the batteries, which are still considered to be `suitable for use' with taxable motor vehicles. Accordingly, the manufacturer's sales of these modified batteries are subject to the manufacturers excise tax on automobile parts or accessories imposed by section 4061(b) of the Internal Revenue Code of 1954.

Full Text

Rev. Rul. 62-33

Advice has been requested concerning the applicability of the manufacturers excise tax on automobile parts or accessories under the circumstances described below.

A company manufactures six-volt and 12-volt electric storage batteries of the lead acid type which are advertised and sold for use with automobiles, trucks, and buses. These batteries are equipped with standard `S.A.E. type taper' terminals, and the battery casings are embossed with words or symbols which indicate that the batteries are for use with automotive vehicles.

At the request of a purchaser, the company will, without extra charge, cut or remove the standard terminals and `burn on' special terminals. With these special terminals the batteries may be used conveniently with inter-communication systems, `stand-by' emergency lighting, laboratory and hospital equipment, various types of generating plants, etc.

Section 4061(b) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of parts or accessories (other than tires and inner tubes and other than automobile radio and television receiving sets) for any of the articles enumerated in section 4061(a) of the Code.

Section 4062(a) of the Code provides that, for purposes of section 4061, certain articles, which are suitable for use on or in connection with, or as component parts of, any of the articles enumerated in section 4061(a), shall be considered parts or accessories for such articles, whether or not primarily adapted for such use. Storage batteries are included among the articles for which this special definition is provided in the statute.

Prior to their modification, the electric storage batteries in the instant case are `suitable for use' with taxable motor vehicles and are considered to be parts or accessories for such vehicles within the meaning of section 4062(a) of the Code.

The fact that batteries are equipped with terminals other than the standard `S.A.E. type taper' terminals does not, in and of itself, provide an adequate basis for concluding that the batteries are not `suitable for use' with taxable motor vehicles. See Revenue Ruling 61-94, C.B. 1961-1, 475, which also states that a battery which is produced by the manufacturer for automotive vehicle use or held out and sold for such use will be assumed to be `suitable for use' with automotive vehicles. A battery will be deemed to be held out and sold for use with automotive vehicles if the battery case itself contains any wording, emblem, symbol, etc., which indicates or denotes that the battery is for use in such a vehicle.

In the instant case, the fact that the manufacturer cuts or removes the standard terminals from batteries which, when sold by the manufacturer, are otherwise `suitable for use' with taxable motor vehicles and `burns on' special terminals does not change the basic characteristics of the batteries. Accordingly, it is held that sales by the manufacturer of these modified batteries are subject to the manufacturers excise tax imposed by section 4061(b) of the Code.