Rev. Rul. 57-362

Reconsideration has been given by the Internal Revenue Service to the position stated in Revenue Ruling 88, C.B. 1953-1, 467, relating to the tax on wire and equipment service, in view of the decision of the Court of Appeals for the Fourth Circuit in the case of DeForrest Lilly, et al. v. United States , 238 Fed.(2d) 584, and the similar decision of the Court of Appeals for the Third Circuit in the case of Gust Pahoulis v. United States , 242 Fed.(2d) 345.

Revenue Ruling 88 holds that the tax on wire and equipment service, imposed by section 3465 of the Internal Revenue Code of 1939 (section 4251 of the Internal Revenue Code of 1954), applies to amounts paid for a television program service furnished over wires leading from a central television receiving antenna to receiving sets located on the premises of subscribers.

In the Lilly and Pahoulis cases, involving television antenna services similar to that referred to in Revenue Ruling 88, the courts held that the tax on wire and equipment service does not apply to amounts paid for such antenna services.

In accordance with those decisions, it is now held that the term `wire and equipment service,' as used in the statute, does not include such a central television antenna service. Accordingly, amounts paid for these services are not subject to the communications tax.

In view of the conclusion stated above, Revenue Ruling 88 is hereby revoked. Revenue Rulings 56-319 and 56-320, C.B. 1956-2, 835, and Revenue Ruling 56-424, C.B. 1956-2, 838, which are premised on Revenue Ruling 88, are also revoked.