Internal Revenue Service
Revenue Ruling
TaxLinks.com
smRev. Rul. 68-39
1968-1 C.B. 451
IRS Headnote
Sales by a manufacturer of certain described trailers, considered to be primarily designed for use on farms, are not subject to the manufacturers excise tax imposed by section 4061(a) of the Internal Revenue Code of 1954.
Full Text
Rev. Rul. 68-39
Advice has been requested whether sales by the manufacturer of the two articles described below are subject to the manufacturers excise tax imposed by section 4061(a) of the Internal Revenue Code of 1954.
One article is a two-wheel trailer designed by the manufacturer for use by farmers in transporting a swather from one location to another. The trailer is made in only one size and consists of a metal frame with heavy-duty wheel spindles and two metal loading ramps which also serve as the trailer mounts for the swather. The loading and carrier ramps are mounted on heavy-duty bearings and lock in place on the trailer by means of metal catches attached to the trailer. Tires for the trailer are optional, but high-ply aircraft tires are recommended by the manufacturer.
A swather is loaded on the trailer by lowering the ramps, driving the swather onto the ramps and up onto the trailer, the ramps then locking into place which fastens the swather to the trailer. The swather tail wheel may either be trailed behind the trailer or raised off the ground by means of a jack mounted on the swather. The trailer may be connected to the towing vehicle (farm tractor, pickup truck, etc.) by either a ball hitch or a pin hitch.
The other article is a metal frame trailer, with a bed designed by the manufacturer for use by farmers as a carrier for items such as lumber, baled hay, and farm implements, including cultivators, plows, and disk drills. The trailer is made in a standard model and a heavy-duty model which differ slightly in size, the standard model being the smaller of the two. The larger heavy-duty model is made with a four-wheel oscillating tandem while the standard model has only two wheels. However, both models have only one axle which is adjustable in order to allow even weight distribution for any size load. The trailer is rectangular and the dimensions of the standard model are 24 or 30 feet long with a bed width of 5 feet while the heavy-duty model is 28 feet long and has a bed width of 7 or 9 feet. Tires for the trailer are optional equipment, but a heavy-duty jack is attached to the tongue of the trailer and is furnished by the manufacturer as standard equipment.
To load a farm implement such as a disk drill on the trailer the trailer wheels are locked and the bed is lowered to the ground by guide runners. The drill can then be towed onto the trailer bed and the bed raised up the guide runners onto the wheel and axle assembly. As with the swather carrier described earlier, this trailer may be connected to the towing vehicle (farm tractor, pickup truck, etc.) by either a ball hitch or a pin hitch.
Section 4061(a)(1) of the Code imposes a tax upon the sale by the manufacturer, producer, or importer of certain enumerated articles including truck trailer and semitrailer chassis and bodies.
Section 48.4061(a)-1(e) of the Manufacturers and Retailers Excise Tax Regulations provides that a trailer or semitrailer chassis or body primarily designed for highway use in combination with a taxable truck, bus, or tractor is subject to the tax imposed by section 4061(a)(1) of the Code. Examples of such taxable trailers and semitrailers are general purpose pole trailers, machinery trailers, tilt-top implement trailers, highway logging dollies, and low-bed trailers or semitrailers designed for transporting heavy equipment over the highways. The regulations also cite as an example of a vehicle which is not a trailer within the meaning of section 4061(a), a farm wagon primarily designed for use on farms, although it may be used on the highway.
The two trailers described in the instant case may be used on the highway in combination with a taxable truck but, in view of the foregoing factual description of the trailers, they are considered to be primarily designed for use on farms. Accordingly, sales by the manufacturer of such trailers are not subject to the manufacturers excise tax imposed by section 4061(a) of the Code.