Rev. Rul. 57-281

Advice has been requested whether incandescent lamps and neon tubes may be purchased free of manufacturers excise tax for use as components in the manufacture of radio receivers of the nonentertainment type.

Section 4131 of the Internal Revenue Code of 1954 imposes a tax on the sale of electric light bulbs and tubes by the manufacturer.

Section 4220(1)(A) of the Code provides that no tax under chapter 32 shall be imposed with respect to the sale of any article (other than an automobile part or accessory taxable under section 4061(b), a refrigerator component taxable under section 4111, a radio or television component taxable under section 4141, or a camera lens taxable under section 4171) for use by the vendee as material in the manufacture or production of, or as a component part of, an article enumerated in this chapter. Section 4220(2)(A) provides that no tax under this chapter shall be imposed with respect to the sale of an automobile part or accessory taxable under section 4061(b), a refrigerator component taxable under section 4111, a radio or television component taxable under section 4141, or a camera lens taxable under section 4171, for use by the vendee as material in the manufacture or production of, or as a component part of any article.

The exemption contained in section 4220(2) of the Code applies only to the articles named therein. Although incandescent lamps and neon tubes may be purchased free of excise tax for use in the manufacture of other taxable articles, it is held that such lamps may not be purchased tax-free for use in the manufacture of nontaxable articles such as radio receivers of the nonentertainment type.