Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 78-9

1978-1 C.B. 348

IRS Headnote

Hydraulic cylinders. Hydraulic telescopic cylinders that have general application for use with dump trucks, forklifts, and various mining articles are not taxable parts or accessories.

Full Text

Rev. Rul. 78-9

A company manufactures and sells hydraulic telescopic cylinders that have general application in automotive, industrial, and mining operations. Cylinders of the type in question are designed to provide a pressure of 3,000 pounds per square inch, and are used with dump trucks, forklifts, and various mining articles.

Section 4061(b)(1) of the Internal Revenue Code of 1954 imposes a tax on the sale by the manufacturer, producer, or importer of parts or accessories (other than tires and inner tubes) for any of the articles enumerated in section 4061(a)(1). Among the articles enumerated in section 4061(a)(1) are truck, trailer, and semitrailer chassis and bodies.

Under section 48.4061(b)-2(b) of the Manufacturers and Retailers Excise Tax Regulations the terrm "parts or accessories" does not include articles which are not used primarily in the manufacture, repair, etc., of auto- or mobile trucks, other automobiles, tractors, but have a general use in the manufacture, repair, etc., of various articles.

Held, since the hydraulic telescopic cylinders are not "used primarily" with automotive trucks, but have a "general use" with various articles within the meaning of section 48.4061(b)-2(b) of the regulations, they do not come within the scope of the term "parts or accessories". Accordingly, the manufacturers excise tax on parts or accessories imposed by section 4061(b)(1) of the Code does not apply to the manufacturer's sales of such telescopic cylinders.