Rev. Rul. 59-262

Advice has been requested whether a dump truck hoist is a part or accessory for an automobile truck body or for an automobile truck chassis for purposes of the manufacturers excise tax. These hoists are designed for use on dump trucks to raise and dump loads.

Situation (1) . A company which manufactures automobile dump truck bodies purchases from another manufacturer hoists which are designed for use with the bodies of its own manufacture. The body manufacturer then associates and sells together the bodies of its own manufacture and the hoists purchased from the other manufacturer. In some instances the hoists are attached to the bodies at the time of sale, while in other instances the hoists are not attached to the bodies at the time of the sale.

Situation (2) . Another company purchases dump truck bodies from a body manufacturer and separately purchases hoists from a hoist manufacturer. The company then sells in the same transaction bodies and hoists. In some instances the company mounts the bodies and hoists on chassis which are owned by its customers. However, in other instances the hoists are not physically attached to the bodies at the time of sale.

Section 4061(a)(1) of the Internal Revenue Code of 1954 imposes a tax upon automobile truck chassis and bodies, and other enumerated motor vehicle articles (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof) sold by the manufacturer, producer, or importer. Section 4061(b) of the Code imposes a tax upon parts or accessories, with certain exceptions not here material, for any of the articles enumerated in section 4061(a) of the Code sold by the manufacturer, producer, or importer.

Section 316.4(a) of Regulations 46, made applicable to the 1954 Code by Treasury Decision 6091, C.B. 1954-2, 47, provides, in part, that the term `manufacturer' includes a person who produces a taxable article by combining or assembling two or more articles.

Information available to the Internal Revenue Service indicates that it is the general practice in the dump truck manufacturing industry to sell hoists with automobile truck bodies. It would appear also that the hoists are finished parts which functionally serve such truck bodies and may properly be considered as integral parts thereof. In view of this fact, it is held that dump truck hoists are parts for automobile truck bodies rather than parts for automobile truck chassis. Where a body manufacturer combines or assembles a hoist, purchased from another manufacturer, with a body of his own manufacture, as in situation (1) above, the act of combining or assembling the two articles constitutes further manufacture of the body. The fact that the hoists are not physically attached to the bodies is immaterial. Furthermore, where a company purchases automobile truck bodies and separately purchases hoists and then combines or assembles such articles, as in situation (2) above, it has further manufactured the bodies and is liable for the manufacturers excise tax imposed by section 4061(a)(1) of the Code on its sales of the bodies complete with hoists, whether or not the hoists are actually attached to the bodies.

It was the former position of the Internal Revenue Service that hoists were automobile truck chassis parts rather than automobile truck body parts. Moreover, the Service considered that the combining or assembling of an automobile truck body and a hoist did not constitute further manufacture of the body. These positions have received wide publicity and have been relied upon in the industry involved; therefore, under the authority of section 7805(b) of the Code, this Revenue Ruling will not be applied to sales of automobile dump truck bodies complete with hoists made prior to October 1, 1959.