Rev. Rul. 55-126

Advice has been requested whether the tax on the transportation of property imposed by section 3475 of the Internal Revenue Code of 1939 is applicable to amounts paid for certain services performed in connection with the transportation of household goods.

In the instant case, a carrier, which furnishes packing and unpacking services, uses almost exclusively in packing articles of clothing dispensable wardrobe cartons that are made of cardboard. The charge for these wardrobe cartons is set forth in the carrier's tariff under the item covering the rates for packing and unpacking services. This item provides that the rates include (1) packing, unpacking and the use of packing containers and materials, or (2) packing and the packing containers and materials in the event that such packing containers and materials are retained by the shipper or consignee. In other words, the charge covers packing and unpacking services, but if the shipper or consignee does not wish to take advantage of the unpacking service, in lieu thereof he may retain the packing materials, including the wardrobe carton.

Section 3475 of the Code imposes a tax upon the amount paid within or without the United States, to a person engaged in the business of transporting property for hire, for the transportation of property by rail, motor vehicle, water or air from one point in the United States to another, with certain exceptions not here applicable.

Section 143.1(d) of Regulations 113 provides that the term `transportation' means the movement of property by a person engaged in the business of transporting property for hire, including interstate, intrastate, and intracity or other local movements and that, in general, the term also includes accessorial services furnished in connection with any such movement.

M.T. 15, C.B. 1943, 1158, holds that amounts paid for certain services, including wardrobe service, when furnished in connection with the transportation of household goods by the carrier which performs the transportation movement, are subject to the tax whether the charge for such services is included in, or is billed separately from, the charge for the transportation movement proper. Such a charge for wardrobe service is a charge for the use, during the transportation movement, of a permanent type of wardrobe box which is retained by the carrier as a part of his transportation equipment. M.T. 15 also holds that amounts paid for packing and unpacking, or crating and uncrating, occurring before and after a transportation movement, are not taxable if the charges therefor are billed separately.

It is held that the charge made by the carrier in the instant case for (1) packing, unpacking, and the use of wardrobe cartons, or (2) packing and the wardrobe cartons which are retained by the shipper or consignee, is a charge for packing and unpacking, and not a charge for wardrobe service, within the meaning of M.T. 15. Accordingly, such charge is not subject to tax, provided the packing and unpacking services are performed before and after the transportation movement, and provided the charge therefor is billed separately from the charge for the transportation movement