Rev. Rul. 57-440

As a result of numerous requests concerning the applicability of the manufacturers excise tax to motor vehicle articles designed for off-highway use, the Internal Revenue Service has undertaken a study with a view to establishing certain criteria for distinguishing between taxable and nontaxable articles.

Section 4061(a)(1) of the Internal Revenue Code of 1954 imposes a tax upon sales by the manufacturer, producer, or importer of:

Automobile truck chassis.

Automobile truck bodies.

Automobile bus chassis.

Automobile bus bodies.

Truck and bus trailer and semitrailer chassis.

Truck and bus trailer and semitrailer bodies.

Tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer.

It is the position of the Service that the only vehicle chassis and bodies intended to be taxed by this section are those primarily designed for highway use.

As a general rule, except for buses and vehicles of a special type, vehicles of more than 96 inches in overall width have been considered nontaxable in the past by reason of limitations imposed by state laws upon their use. However, after extensive reconsideration, it is now held that the manufacturers excise tax imposed by section 4061(a)(1) of the Code shall not apply to sales by the manufacturer, producer, or importer of:

(1) Automobile truck chassis and bodies, truck trailer and semitrailer chassis and bodies (except low-bed trailers and semitrailers), and tractors, which have an overall width of more than 102 inches unless their width can readily be reduced to 102 inches or less without materially affecting the designed utility of the articles, as for example, by removal or substitution of wheel spacers, hub caps, tires, wheels, mudflaps, clearance lights, or other projections or appurtenances; or

(2) Any article, regardless of width, which is designed or adapted by the manufacturer for purposes predominantly other than the transportation of persons or property on the highway even though incidental highway use may occur.

However, buses and vehicles of a special type (such as low-bed trailers and semitrailers) which by their design are intended for general use upon the highways will continue to be subject to tax irrespective of their width, weight, or construction. See Rev. Rul. 54-117, C.B. 1954-1, 260.

Because the position of the Service has not been consistent with the conclusion set forth above, and under the authority contained in section 7805(b) of the Code, the conclusion of this Revenue Ruling will not be applied to sales made prior to October 1, 1957. Furthermore, the tax will not be applied to sales made during the period of October 1, 1957, to November 30, 1957, inclusive, of trucks having an overall width of more than 96 inches unless such trucks can readily be reduced to 96 inches or less in width without materially affecting the designed utility of the articles, as, for example, by removal or substitution of wheel spacers, hub caps, tires, wheels, mudflaps, clearance lights, or other projections or appurtenances.

Also, with respect to the performance of firm contracts of sale entered into by the truck manufacturer prior to October 1, 1957, for trucks having an overall width of more than 96 inches, regardless of when the deliveries are made, this ruling will not apply unless the width of such trucks can be readily reduced to 96 inches or less without materially affecting the designed utility of the truck, as, for example, by removal or substitution of wheel spacers, hub caps, tires, wheels, mudflaps, clearance lights, or other projections or appurtenances.

Otherwise, this ruling will apply to all sales made on and after December 1, 1957.