Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 70-55

1970-1 C.B. 225

IRS Headnote

The list of lubricating oils that have been determined to be seldom used as lubricants and, therefore, may be sold free of the tax imposed by section 4091 of the Code is updated; Revenue Rulings 58-476, 59-215, 64-120, 64-244, 68-91 superseded.

Full Text

Rev. Rul. 70-55

The purpose of this Revenue Ruling is to update Revenue Ruling 68-91, C.B. 1968-1, 473. That Revenue Ruling contains a list of lubricating oils that may be sold free of the manufacturers excise tax imposed by section 4091 of the Internal Revenue Code of 1954, by reason of being oils "seldom used as lubricants" within the meaning of section 48.4091-6 of the Manufacturers and Retailers Excise Tax Regulations.

It has been determined that the lubricating oils listed herein, although suitable for use as lubricants, are seldom so used, but are used almost exclusively for non-lubricating purposes. Therefore, under section 48.4091-6 of the regulations, the lubricating oils listed below may be sold tax-free by the manufacturer thereof, provided he obtains a properly executed exemption certificate from the purchaser as required by the regulations.

1. Non-recovered process aids: Oils, not used as lubricants, having a primary function as aids to processing other substances, that do not become part of the finished products, are not reused, and are lost or discarded as a function of the process or application, as follows:

     Anti-foam oils

     Apron dressing oils

     Brick oils

     Buffing, polishing, and rubbing oils

     Casting oils

     Ceramic oils (pottery and glass molds)

     Concrete form oils

     Core oils

     Defoamants

     Dust Allaying oils

     Electrode extrusion oils

     Flotation oils

     Fogging oils

     Form oils

     Hot forging and piercing operations oils

     Mold oils for glass

     Mold oils for metals

     Mold oils for rubber tires

     Rayon oils

     Rub-roll oils

     Silk and wool oils

     Slab oils

     Textile processing oils and base stocks

     Tinning and terming oils

     Wave and storm oils

2. Surface coating applications: Oils, not used as lubricants, having a primary function as coatings, or vehicles for such coatings, that are applied to the surface of other substances, and are not reused or recovered but remain on the surface of the substances to which they are applied, as follows:

     Agricultural spray oils

     Air conditioning filter oils

     Air filter coating oils

     Cadaver oils

     Coal spray oils

     Denaturing oils

     Feed conditioning oils

     Food processing oils

     Fruit and vegetable preservative oils

     Livestock post oils

     Mange oils

     Rust and corrosion preventive oils

     Slushing oils

3. Components of finished products: Oils, not used as lubricants, having a primary function as compounding or impregnating materials and that become an integral part of finished products that, in their final form, are not lubricants and are not used for lubricating purposes, as follows:

     Adhesive oils

     Animal feed oils

     Anti-dust oils

     Battery oils

     Calking and sealant oils

     Carbon binder oils

     Chemical reaction intermediates

     Coke binder oils

     Composition roofing oils

     Cordage oils

     Cosmetic oils

     Cotton softener oils

     Dust cloth oils

     Enrichment oils, rubber

     Extender oils for rubber and resin

     Floor and mop oils

     Floor sweeping compound oils

     Fur dressing oils

     Glycerin additive plastic processing oils

     Granule conditioning oils

     Harness oils

     Ink oils

     Insecticide oils

     Lard oils

     Leather and belt dressing oils

     Oils used as component material in the manufacture of rubber

     Paint oils

     Paper impregnating oils

     Paper processing oils

     Petroleum sulfonates

     Plasticizer oils for rubber and resins

     Putty oils

     Refined and deordorized neatsfoot oils

     Road oils

     Rubber impregnating oils

     Rubber reclaiming and release oils

     Slate granule oils

     Soap stock oils

     Sperm whale oils

     Spray oils

     Tallow oils

     Tanners fat-liquor oils

     Technical white oils

     White oils

     Wood preserving oils

4. Physical or mechanical aids: Oils, not used as lubricants, having a primary function of performing physical or mechanical functions other than lubrication and that are not included in any of the foregoing groups, as follows:

     Absorbent oils

     Air filter oils

     Compass oils

     Coolant and abrasive carrying oils used in polishing metal

castings.

     Coolant oils used in grinding or honing metal with stone

     Fingerprint remover oils

     Flushing or cleaning oils

     Gas-holder sealing oils

     Heat transfer oils

     Hydraulic and hoist oils

     Metal wash oils

     Meter oils

     Oils used to prevent paper from adhering to metal rollers

     Quenching oils

     Tempering oils

     Washing oils for gas manufacture

Under the provisions of section 48.4091-6(a) of the regulations, an exemption certificate must be obtained by the manufacturer in order to sell any of the lubricating oils in the foregoing lists free of the tax imposed by section 4091 of the Code.

However, in accordance with section 48.4091-6(c) of the regulations, the requirement of an exemption certificate is waived in the case of certain other oils determined by the Commissioner before July 1, 1966, to be seldom used as lubricants, as follows:

     Castor oil

     Crude neatsfoot oil

     Oil generally known as transformer or insulating oil

     White oil that is odorless, tasteless, and of 30 Saybolt color

or higher

     Non-lubricating engine additive oils

Revenue Rulings 58-476, C.B. 1958-2, 781; 59-215, C.B. 1959-1, 323; 64-120, C.B. 1964-1 (Part 1), 380; 64-244, C.B. 1964-2, 424; and 68-91, C.B. 1968-1, 473, are hereby superseded since the conclusions set forth therein are incorporated in this Revenue Ruling.