Rev. Rul. 57-496

Advice has been requested whether the manufacturers excise tax applies to the sale, by the manufacturer, of a power lawn mower without a motor.

Section 4121 of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer of power lawn mowers of the household type.

The term `power lawn mower' includes all machines for cutting the grass of a lawn where the cutting power of the machine is derived, directly or indirectly, from a motor or other power unit. Revenue Ruling 116, C.B. 1953-1, 465, holds that a `household type' power lawn mower is one with a cutting width of less than 24 inches, unless the mower by reason of its design and construction is primarily adapted for another purpose, such as mowing golf greens.

It is held that the sale of a power lawn mower chassis or frame, without a motor, is not a sale of a `power lawn mower' and such sale is not subject to the tax. However, where a manufacturer sells, as part of the same transaction, a lawn mower chassis and a motor for use on the mower, the tax is applicable to the total sales price, since the transaction is the sale of a power lawn mower in a knockdown condition. This would be true even though the power lawn mower chassis and the motor may be packed or shipped separately or may be invoiced separately.

Where a dealer purchases from different manufacturers or suppliers a power lawn mower chassis and a motor for assembly and resale to the ultimate vendee as a complete unit, the dealer is considered to be the manufacturer of the power lawn mower and is liable for the tax. Under the provisions of section 4216(b) of the Code, the tax on such sales by the dealer must be computed on the price for which similar power lawn mowers are sold, in the ordinary course of trade, by manufacturers or producers thereof, as determined by the Secretary of the Treasury or his delegate.