Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 78-8

1978-1 C.B. 341

IRS Headnote

Semitrailer; unitized construction; nontaxable bulk feed body. A highway type semitrailer of unitized construction designed to be used in combination with a taxable tractor and equipped with a nontaxable bulk feed self-unloading body primarily designed to haul feed, seed, and fertilizer to and on farms is considered to have a taxable chassis consisting of the keel assembly, kingpin plate, landing and running gear, and any additional equipment and accessories installed by the manufacturer that are related to the basic function or safety of the chassis. The manufacturers tax is computed on that portion of the total sales price of the complete unit attributable to the chassis as so determined.

Full Text

Rev. Rul. 78-8

Advice has been requested whether certain elements of the unitized semitrailer described below are a chassis subject to the manufacturers excise tax imposed by section 4061(a)(1) of the Internal Revenue Code of 1954.

The elements in question are components of a bulk feed self-unloading semitrailer that is of unitized construction; that is, the vehicle does not have a separate chassis.

The body of the semitrailer is constructed on a keel assembly to which an unloading mechanism is attached. A kingpin plate and landing gear are welded to the front of the keel assembly. Suspension parts and wheel components, commonly known as "running gear", are then attached to the rear of the keel assembly. The running gear is constructed on a "building block" principle, that is, certain parts are first welded to the keel assembly, then other parts are added until the running gear is completed.

The semitrailer is designed to perform the function of transporting a load over the highway in combination with a taxable tractor and has no special design or features that limit or impair this function. However, the body is primarily designed to haul feed, seed, or fertilizer to and on farms and is exempt under section 4063(a)(2)(B) of the Code from the tax imposed by section 4061(a)(1).

Section 4061(a)(1) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of truck trailer and semitrailer chassis and bodies. For purposes of that section, the sale of a truck trailer or semitrailer is a sale of a chassis and a body.

Section 4063(a)(2)(B) of the Code exempts from the tax imposed by section 4061 any body, part, or accessory primarily designed to haul feed, seed, or fertilizer to and on farms.

Under section 48.4061(a)-1(a)(2) of the Manufacturers and Retailers Excise Tax Regulations, as amended by T.D. 7461, 1977-1 C.B. 317, a truck trailer or semitrailer, chassis or body is taxable only if it is, in any sense, reasonably suitable for use, and is sold for use, as a component part of a highway vehicle defined in section 48.4061(a)-1(d).

Section 48.4061(a)-1(d)(1) of the regulations provides that the term "highway vehicle" means any self-propelled vehicle, or any trailer or semitrailer, designed to perform a function of transporting a load over public highways, whether or not also designed to perform other functions, but does not include a vehicle described in section 48.4061(a)-1(d)(2). Section 48.4061(a)-1(d)(2)(ii) provides that a self-propelled vehicle, or a trailer or semitrailer, is not a highway vehicle if it is (A) specially designed for the primary function of transporting a particular type of load other than over the public highway in connection with a construction, manufacturing, processing, farming, mining, drilling, timbering, or other operation similar to any one of the foregoing enumerated operations, and (B) if by reason of such special design, the use of such vehicle to transport such load over the public highways is substantially limited or substantially impaired.

Under the principle set forth in Rev. Rul. 70-547, 1970-2 C.B. 264, an undercarriage that is designed to transport a load over the highway in combination with a taxable truck or tractor need not have an identifiable chassis frame in order to be a trailer or semtrailer chassis within the meaning of section 4061(a)(1) of the Code.

Since the semitrailer in this case is designed to transport a load over public highways and has no special design or features that limit or impair such function, it is a highway vehicle under the regulations. Further, although the semitrailer has no identifiable chassis frame, it has an undercarriage that performs the transportation function of a chassis. Accordingly, those elements that make up the undercarriage and contribute to the transportation function are a semitrailer chassis suitable for use as a component part of a highway vehicle and subject to the tax imposed by section 4061(a)(1) of the Code.

Therefore, the chassis in this case consists of the keel assembly (including framework and sheathing), kingpin plate, landing gear, and running gear. Any additional equipment and accessories installed by the manufacturer that are related to the basic function or safety of the semitrailer chassis are also subject to the tax imposed by section 4061(a)(1) of the Code. Thus, since the body of the semitrailer is exempt under section 4063(a)(2)(B), the tax is to be computed on that portion of the manufacturer's total sale price of the complete bulk feed unit that is attributable to the chassis as determined above.