Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 68-52

1968-1 C.B. 476

IRS Headnote

A charge for antifreeze installed in a taxable automobile truck may not be excluded in determining the manufacturer's sale price of the truck for the purpose of computing the manufacturers excise tax imposed by section 4061(a)(1) of the Internal Revenue Code of 1954.

Full Text

Rev. Rul. 68-52

Advice has been requested whether, in determining the manufacturer's sale price of an automobile truck for purposes of the manufacturers excise tax imposed by section 4061(a)(1) of the Internal Revenue Code of 1954, there may be excluded a charge attributable to antifreeze installed in the radiator of such a unit.

A company manufactures and sells taxable automobile trucks. Antifreeze is placed in the cooling system of a truck to protect it from adverse weather conditions if the company believes that there is reasonable probability that the truck will be exposed to freezing conditions before the buyer takes possession. The charge for the antifreeze is then billed to the customer as a separate item on the invoice furnished him.

Section 4061(a)(1) of the Code imposes a tax on the price for which certain motor vehicle articles, including chassis and bodies for automobile trucks, are sold by the manufacturer, producer, or importer. Section 4216(a) of the Code provides that in determining, for purposes of the manufacturers excise tax, the price for which an article is sold, there shall be included any charge for coverings and containers of whatever nature, and any charge incident to placing the article in condition packed ready for shipment, but there shall be excluded the amount of the manufacturers excise tax, whether or not stated as a separate charge. A transportation, delivery, insurance, installation, or other charge (not required by the foregoing sentence to be included) shall be excluded from the price only if the amount thereof is established to the satisfaction of the Secretary of the Treasury or his delegate in accordance with the regulations.

In determining the price for which an article is sold, for purposes of computing the manufacturers excise tax, any charge which is required by the manufacturer, producer, or importer to be paid as a condition to the sale of the taxable article and which is not one of the charges that may be excluded under the provisions of section 4216(a) of the Code is includible in the sale price upon which the tax is based.

Accordingly, it is held that a charge made for the antifreeze may not be excluded in determining the manufacturer's sale price for purposes of the manufacturers excise tax imposed by section 4061(a)(1) of the Code even though such charge is invoiced as a separate item.