Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 63-1

1963-1 C.B. 191

IRS Headnote

For purposes of the manufacturers excise tax, the term `automobile parts or accessories' includes winches which are designed to be attached to or the primary use of which is in connection with taxable boat trailers. Therefore, when these winches are sold by boat trailer manufacturers as integral parts of or on or in connection with the sale of taxable boat trailers, the manufacturers excise tax imposed by section 4061(a) of the Internal Revenue Code of 1954 applies to the total price for which the boat trailers (including the winches) are sold. Furthermore, separate sales of these winches by the manufacturer thereof are subject to the manufacturers excise tax imposed by section 4061(b) of the Code.

Full Text

Rev. Rul. 63-1

Advice has been requested concerning the applicability of the manufacturers excise tax to sales by the manufacturer of the winches described below.

A company manufactures and sells two-wheel trailers (hereinafter referred to as `boat trailers') which are used for transporting small pleasure boats over the highway. For use with these boat trailers, the company also manufactures winches, each of which consists of a winch mechanism and a winch stand. They are manually operated and are designed to be attached to the tongues of the boat trailers. These winches are used in loading and unloading boats onto and from boat trailers and also serve as a means of securing boats to the boat trailers while in transit.

The company usually sells these winches on or in connection with the sale of its boat trailers. However, in some instances, the company sells the winches separately.

Section 4061(a) of the Internal Revenue Code of 1954 imposes a tax upon certain motor vehicle articles (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof) sold by the manufacturer, producer, or importer. Under section 4061(a)(1) the tax is imposed upon truck trailer and semi-trailer chassis and bodies. Under section 4061(a)(2) the tax is imposed upon chassis and bodies for trailers and semitrailers (other than house trailers) suitable for use in connection with passenger automobiles.

Section 4061(b) of the Code imposes a tax upon 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 motor vehicle articles enumerated in section 4061(a) of the Code.

Section 40.4061(b)-2(a) of the Manufacturers and Retailers Excise Tax Regulations provides that, in general, the term `parts or accessories' includes (1) any article, the primary use of which is to improve, repair, replace, or serve as a component part of an automobile truck chassis or body, or other automobile chassis or body, or taxable tractor, (2) any article designed to be attached to or used in connection with such chassis, body, or tractor to add to its utility or ornamentation, and (3) any article, the primary use of which is in connection with such chassis, body, or tractor, whether or not essential to its operation or use.

Boat, luggage, or utility trailers which are suitable for use in connection with passenger automobiles are taxable motor vehicle articles within the meaning of section 4061(a)(2) of the Code. See Revenue Ruling 59-358, C.B. 1959-2, 254. The winches described in the instant case are designed to be attached to taxable boat trailers to add to their utility. Moreover, the primary use of the winches is in connection with such boat trailers. Thus, the winches are automobile `parts or accessories' within the meaning of section 4061(b) of the Code and section 40.4061(b)-2(a) of the regulations.

Accordingly, it is held that when these winches are sold by the boat trailer manufacturer as integral parts of or on or in connection with the sale of his trailers, the manufacturers excise tax imposed by section 4061(a) of the Code applies to the total price for which the trailers (including the winches) are sold. It is further held that separate sales of these winches by the manufacturer thereof are subject to the manufacturers excise tax imposed by section 4061(b) of the Code.

Under the authority contained in section 7805(b) of the Code, this Revenue Ruling will not be applied to sales made by manufacturers, producers, or importers prior to March 1, 1963.