Internal Revenue Service
Revenue Ruling
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smRev. Rul. 75-88
1975-1 C.B. 341
IRS Headnote
Loading and unloading cranes. An administrative test is established to assist in determining the taxability under section 4061(b)(1) of the Code of certain cranes of the mast and boom type sold after October 18, 1972.
Full Text
Rev. Rul. 75-88
Advice has been requested whether the cranes described below are subject to the manufacturers excise tax imposed by section 4061(b)(1) of the Internal Revenue Code of 1954 on sales of automotive parts or accessories.
The cranes in question are of the mast and boom type, and they comprise several categories differing in both design and type of function. These cranes may be fixed-length, telescopic, knuckle-arm (or articulated), trolley, traveling, elevating or nonelevating, etc. They are manufactured in varying sizes and weights, have different lifting capacities, and are generally installed directly behind the cab of the truck, but occasionally will be mounted at another position on the truck.
Section 4061(a) of the Code imposes a tax on sales by the manufacturer, producer, or importer of certain enumerated articles, including automobile truck bodies and chassis, unless such articles are suitable for use with a vehicle having a gross vehicle weight of 10,000 pounds or less.
Section 4061(b)(1) of the Code imposes a tax on sales by the manufacturer, producer, or importer of parts and accessories (other than tires and inner tubes) for any of the motor vehicles enumerated in section 4061(a).
Section 48.4061(b)-2(a) of the Manufacturers and Retailers Excise Tax Regulations provides as follows:
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. . . . An article shall not be deemed to be a taxable part or accessory even though it is designed to be attached to the vehicle or to be primarily used in connection therewith if the article is in effect the load being transported and the primary function of the article is to serve a purpose unrelated to the vehicle as such. For example, a construction derrick attached to a truck is not a taxable part or accessory inasmuch as the derrick is the load of the truck and its use is in connection with construction work at a construction site rather than in connection with the transportation or loading or unloading function of the truck. On the other hand, an article such as a towing cradle or loading or unloading equipment designed to be attached to or to be primarily used in connection with a truck is a taxable part or accessory inasmuch as the article contributes to the load-carrying function of the truck.
Rev. Rul. 59-288, 1959-2 C.B. 250, holds that certain cranes of the mast and boom type that are designed to be mounted on trucks, but which are used primarily in operations at a jobsite rather than for loading and unloading the trucks upon which they are mounted, are not taxable parts and accessories for purposes of the manufacturers excise tax imposed by section 4061(b)(1) of the Code.
Rev. Rul. 65-156, 1965-1 C.B. 464, holds that cranes of the mast and boom type that are designed to be attached to motor vehicles of the type described in section 4061(a) of the Code to be used primarily to load and unload such vehicles are taxable parts and accessories for purposes of the manufacturers excise tax imposed by section 4061(b)(1).
The cranes described in this Revenue Ruling vary considerably in size, in style, and in the manner in which they are marketed by their various manufacturers. After an examination of all available data, the Service has established an administrative test to assist in making individual determinations.
In applying this test, it will be presumed that cranes of the type in question which (1) measure twenty-five feet or less in extended horizontal reach, from the center line of the mast, without readily removable extensions, and (2) can be mounted on trucks for use in loading or unloading such trucks, are articles that are designed and primarily used for loading and unloading such trucks. Therefore, the tax imposed by section 4061(b)(1) of the Code would apply to such cranes. Cranes which exceed twenty-five feet in extended horizontal reach without readily removable extensions will be presumed not to be designed or primarily used for loading and unloading trucks upon which they are mounted. Therefore, the tax imposed by section 4061(b)(1) would not apply to such cranes. In either case, the presumption established by this administrative test is rebuttable if it can be established that such determination is inconsistent with section 48.4061(b)-2(a) of the regulations, Rev. Rul. 59-288, or Rev. Rul. 65-156.
Pursuant to the authority granted by section 7805(b) of the Code, the conclusion set forth herein will not be applied to sales made by the manufacturer prior to October 19, 1972.