Rev. Rul. 57-264

Advice has been requested regarding the applicability of the retailers excise tax on luggage, handbags, etc., to the sale of the following receptacles which are especially designed, advertised, and sold as official equipment for use by Boy Scouts in activities of the organization:

1. Cub Pack (blue)-No. 1024

2. Official Day Hike Bag-No. 1225

3. Official Haversack-No. 573

4. Official Yucca Bag-No. 574

5. Norwegian Packsack-No. 1238

6. Duffel Bags-No. 1072, 1073, and 1386

7. Rover pack-No. 1434

7. Rover Pack-No. 1434

Section 4031 of the Internal Revenue Code of 1954 imposes a tax upon the retail sale of all cases, bags, and kits (without regard to size, shape, construction, or material from which made) for use in carrying toilet articles or articles of wearing apparel. Revenue Rulings 56-695 and 56-696, C.B. 1956-2, 790, holds that the taxability of a case, bag, kit, etc., depends upon whether the receptacle is suitable for use in carrying toilet articles or articles of wearing apparel and not upon the purpose for which it is manufactured, advertised, or sold.

The Cub Pack and the Official Day Hike Bag are constructed for use solely by the Boy Scouts in carrying cooking utensils and other equipment required on hikes. These receptacles are equipped with built-in partitions or special fittings which preclude their suitability for use in carrying toilet articles or articles of wearing apparel. It is therefore held that the Cub Pack and the Official Day Hike Bag are not subject to the retailers excise tax imposed by section 4031 of the Code.

The Official Haversack, Official Yucca Bag, Norwegian Packsack, Duffel Bags, Rover Pack, and Official Musette Bag are not equipped with any built-in partitions or special fittings which preclude their suitability for use in carrying wearing apparel or toilet articles. Accordingly, it is held that the tax on luggage, handbags, etc., imposed by section 4031 of the Code applies to the retail sale of these articles. There is no provision of law under which these articles may be exempt from the retailers excise tax merely because they are especially designed and are sold for use by Boy Scouts in official activities of the organization.