Rev. Rul. 59-202

Advice has been requested whether a certain carrying case is subject to either the manufacturers excise tax on radio and television sets, etc., or the retailers excise tax on luggage, handbags, etc.

A company manufactures and sells a leather carrying case which is designed and sold for carrying a portable radio which is complete as to all component parts, including a cabinet. The carrying case measures ten and one-quarter inches from side to side, seven and one-quarter inches from top to bottom with the top closed, and three and one-half inches from front to back. It is equipped with a shoulder strap for carrying, and the front of the case has a number of small openings, in a rectangular formation, which permit the use of the radio while the top of the case is closed.

Section 4141 of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of, among other things, radio receiving sets and radio and television components (including in each case parts or accessories therefor sold on or in connection with the sale thereof). Section 4142 of the Code defines the term `radio and television components' to include, among other things, cabinets which are suitable for use on or in connection with, or as component parts of, any of the articles enumerated in section 4141, whether or not primarily adapted for such use.

Section 4031 of the Code imposes a tax upon the sale at retail of various enumerated articles, by whatever name called.

The question of taxability in the instant case, for purposes of the manufacturers excise tax, is twofold. It is held that the carrying case described above is not a part or accessory for a radio receiving set; neither is it a cabinet of the type defined in section 4142 of the Code as a radio and television component. Accordingly, the carrying case is not subject to the manufacturers excise tax imposed by section 4141 of the Code, whether sold separately or with a radio receiving set.

It is further held that, since this carrying case is designed especially for use in carrying a radio and is suitable only for that purpose, it is not an article such as is contemplated in section 4031 of the Code. Therefore, sales of the carrying case are not subject to the retailers excise tax imposed by that section.