Rev. Rul. 87-86

1987-2 C.B. 252, 1987-36 I.R.B. 8.

MANUFACTURERS; GENERAL; SALES PRICE

Published: September 8, 1987

SECTION 4052. - DEFINITIONS AND SPECIAL RULES, 26 CFR 145.4052-1: Special rules and definitions.

(Also Sections 7805; 301.7805-1.)

  Manufacturers; general; sales price. The requirement to include certain delivery charges in the taxable sale price of a truck does not apply to sales prior to October 1, 1987. Rev. Rul. 86-68 modified.

  Rev. Rul. 86-68, 1986-1 C.B. 318, deals with the excludability of certain transportation and delivery expenses in determining a tax base for purposes of computing the federal excise tax on truck bodies and chassis imposed by section 4051(a)(1) of the Code. In Situation 2 of Rev. Rul. 86-68, a trucking company orders a taxable truck from a retail truck dealer. Under the contractual arrangement between that dealer and the trucking company, the truck is shipped by the truck manufacturer from the manufacturer's factory directly to the customer. The revenue ruling holds that the actual transportation and delivery charges for shipping the truck directly from the manufacturer to the retail dealer's customer are includable in the taxable sale price to the extent that such charges do not exceed the charges that would have been incurred to ship the truck from the manufacturer to the retail dealer through whom the truck was ordered. The balance (if any) of the actual transportation and delivery charges is excludable from the taxable sale price.

  Rev. Rul. 86-68 is modified to provide that the conclusion in Situation 2 does not apply to sales prior to October 1, 1986.

Rev. Rul. 87-86, 1987-2 C.B. 252, 1987-36 I.R.B. 8