Rev. Rul. 54-479

Advice is requested whether alcohol shipped in bond or tax-free may be transported in semi-trailers which are carried by a railroad, such semi-trailers being delivered therefrom to the consignee at the point of destination by the trucker.

Section 182.401b(c) of Regulations 3, as amended by Treasury Decision 6074, page 481, this Bulletin, provided that alcohol shipped in bond or tax-free must be transported by the proprietor of the industrial alcohol plant, the consignee, or the authorized carrier personally, or by some person regularly and exclusively in their employ, and the right to possession of any vehicle used for such transportation must be vested in the vendor, vendee, or carrier.

Semi-trailers, owned by a transportation company, are used for the transportation of alcohol. Such semi-trailers are delivered by the transportation company to a railroad company where they are loaded on flatcars and again delivered to the transportation company at the destination rail terminal for delivery to the premises of the authorized consignees.

While the right of possession of the semi-trailers containing the alcohol is vested in the originating and delivering carrier (the transportation company) the semi-trailers, when being hauled by the railroad on flatcars, are being transported by an authorized carrier (the railroad company) which has the right to possession of the flatcar pursuant to section 182.401b(c) of Regulations 3. Therefore, the owner of the semi-trailers, if otherwise qualified under Regulations 3 to do so, may transport alcohol in semi-trailers even though the semi-trailers are, in turn, loaded on flatcars for hauling between certain points on the railroad.