Internal Revenue Service
Revenue Ruling
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smRev. Rul. 63-2
1963-1 C.B. 192
Caution:Amplified by Rev. Rul. 68-51
IRS Headnote
For purposes of the manufacturers excise tax, the term `automobile parts or accessories' includes devices which are designed to be attached to or which are primarily used in connection with taxable automobile truck and trailer bodies for loading or unloading feed, grain, agricultural limestone, etc. Therefore, when these devices are sold by body manufacturers as integral parts of or on or in connection with the sale of the taxable bodies, the manufacturers excise tax imposed by section 4061(a)(1) of the Internal Revenue Code of 1954 applies to the total price for which the bodies and devices are sold. Furthermore, separate sales of these devices by the manufacturer thereof are subject to the manufacturers excise tax imposed by section 4061(b) of the Code.
Full Text
Rev. Rul. 63-2
Advice has been requested concerning the applicability of the manufacturers excise tax to sales by the manufacturers of the loading and unloading devices described below.
Several companies manufacture taxable automobile truck and trailer bodies which are designed for transporting bulk products such as feed, grain, agricultural limestone, commercial fertilizer, and similar products. The manufacturers usually sell the bodies with loading or unloading devices which are designed for use in loading the products into or unloading the products from the bodies. Sometimes, the manufacturers sell the loading or unloading devices separately.
Device (1) : This device is a so-called `elevator attachment' which is designed to be attached to the rear of V -shaped self-unloading bulk transport bodies. Each of these bodies has a built-in conveyor which runs lengthwise along the bottom of the body. The `elevator attachment' is used in conjunction with this conveyor, and it elevates and directs the products into storage bins or similar receptacles. Power for this device is derived from an auxiliary engine which is mounted on the body of the vehicle.
Device (2) : This device is a pneumatic `unloading attachment' which also is designed to be attached to bulk transport bodies. This attachment consists mainly of a rotary air lock, a blower, and the necessary hoses, etc. The blower provides the air to move the products from the air lock through the hose and into the storage receptacles. The device is powered by means of a power take-off unit or by means of an auxiliary engine.
Device (3) : This device is referred to as an `auger loading and unloading system.' It consists of a horizontal auger recessed in the bed of a bulk transport body to move the products to the rear of the body, a vertical auger to raise the products, and a horizontal auger boom to move the products into storage receptacles. The auger boom may be raised or lowered and is designed so that it may be made to swivel. The system is hydraulically operated by means of a power take-off and can be made to load by reversing the system.
It is contended that these devices perform no function in the transportation of the products carried in the bodies, that they do not constitute `parts or accessories' for such bodies and, therefore, that the manufacturers' sales of these devices are not subject to the manufacturers excise taxes imposed by section 4061 of the Internal Revenue Code of 1954.
Section 4061(a)(1) of the Code imposes a tax on sales by the manufacturer, producer, or importer of automobile truck bodies, truck trailer and semitrailer bodies, and other enumerated motor vehicle articles (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof).
Section 4061(b) of the Code imposes a tax on sales 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 or bus 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.
Although it may be contended that the loading and unloading devices described above perform no function in the transportation of the products carried in the bodies to the extent that the devices are not used while the vehicles are in motion, nevertheless, these devices are designed to be attached to the bodies and to add to the utility thereof. Moreover, the primary use of the devices is in connection with the bodies. Therefore, these devices are considered to be 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 devices are sold by body manufacturers as integral parts of or on or in connection with taxable bulk transport bodies, the manufacturers excise tax imposed by section 4061(a)(1) of the Code applies to the total price for which the bodies (including the devices) are sold. It is further held that separate sales of these devices by the manufacturer thereof are subject to the manufacturers excise tax imposed by section 4061(b) of the Code.