Rev. Rul. 60-136

Advice has been requested concerning the applicability of the manufacturers excise tax to neon glow lamps which are sold by the manufacturer with resistors permanently attached.

A neon glow lamp is manufactured for use to indicate whether the electric current is on or off. Every neon glow lamp must have some type of a resistor to control the voltage in the circuit; otherwise, the current will cause the lamp or fuse to `blow out.' These lamps are manufactured and sold either with or without resistors. With respect to those lamps which are to be sold with resistors, the manufacturer welds a resistor to one of the legs (lead wires) of each lamp.

Section 4131 of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of electric light bulbs and tubes.

The neon glow lamps in the instant case are taxable `electric light bulbs or tubes' within the meaning of section 4131, irrespective of whether they are sold with or without resistors. Sales of the resistors separately are not subject to the tax imposed by section 4131. However, where the resistors are welded to the legs of the lamps, as described above, the resistors become integral parts of the lamps which are sold by the manufacturer thereof.

Accordingly, it is held that where the resistors are welded to the neon glow lamps by the manufacturer, sales of the complete lamps, including the resistors, are subject to the manufacturers excise tax on electric light bulbs and tubes imposed by section 4131 of the Code.

The prior position of the Internal Revenue Service relating to sales of neon glow lamps complete with resistors has not been consistent with the position set forth above. Since that prior position has been followed by members of the industry involved, under the authority contained in section 7805(b) of the Code, this Revenue Ruling will not be applied to sales made prior to June 1, 1960.