Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 67-20

1967-1 C.B. 294

Section 544 -- Determining Stock Ownership

IRS Headnote

The manufacturers excise tax on motor vehicle articles, imposed by section 4061(a)(1) of the Internal Revenue Code of 1954, does not apply to the trailer chassis for an article referred to as a `mobile test stand' designed to be used at Air Force bases. The equipment mounted on the trailer chassis is not subject to the tax imposed on automotive parts or accessories by section 4061(b) of the Code.

Full Text

Rev. Rul. 67-20

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

A company manufactures and sells articles which it refers to as `mobile test stands' primarily designed and constructed for the maintenance, testing, and servicing of gas turbine power and heating units installed in aircraft at various Air Force bases. The `mobile test stand' consists of a trailer chassis made up of a platform mounted on two pneumatic tired wheel assemblies and a tow bar. The platform is designed to accommodate the power and heating units to be tested, field tester, fuel tanks, exhaust silencer, and other related equipment. The test stand, with equipment, including the power and heating unit to be tested, weighs approximately 1,700 pounds. It is 71 3/4 inches wide, 24 inches high (to the mounting platform only) and 118 inches long.

The trailer chassis is not designed primarily as a carrier for the field tester and power and heating unit over the highways but rather for mobility of the tester and units to be tested when removed from the aircraft for testing. The `mobile test stand' may be towed at the following maximum speeds: Paved surfaces-20 miles per hour, graded gravel roads-10 miles per hour, broken ground-5 miles per hour.

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

Section 4061(b) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of parts and accessories (other than tires or inner tubes) for any of the articles enumerated in section 4061(a)(1) of the Code, except that no tax shall be imposed upon any part or accessory which is suitable for use (and ordinarily is used) on or in connection with, or as a component part of, any article enumerated in section 4061(a)(2) or a house trailer.

Section 48.4061(a)-1(d) of the Manufacturers and Retailers Excise Tax Regulations provides that a chassis or body specified in section 4061(a) of the Code which is not designed for highway use is not subject to the tax imposed by such section.

Based upon all the factors outlined above, it is held that this trailer chassis is `not designed for highway use' within the meaning of section 48.4061(a)-1(d) of the regulations. Thus, the chassis is not a motor vehicle article under the provisions of section 4061(a)(1) of the Code and is not subject to the manufacturers excise tax imposed by that section.

Further, the testing equipment mounted on the trailer chassis is not considered to be `parts or accessories' under section 4061(b) of the Code. Accordingly, such articles are not subject to the manufacturers excise tax imposed by that section.