Rev. Rul. 58-159

Advice has been requested concerning the applicability of the tax on transportation of property to amounts paid for certain services performed by the carrier in connection with the moving of office effects and equipment from on location to another.

A moving and storage company contracted with a business firm to perform the complete moving operations of the firm's office effects and equipment from several separate locations to a new location. In addition to the actual transportation of the effects, the moving and storage company was required to furnish the following related services; (1) tagging and marking effects prior to removal, (2) planning of removal, (3) packing effects prior to removal, (4) marking of floors for equipment at destination, (5) unpacking and arranging effects after removal, and (6) installing appliances after movement to the new location. The contract also included the unloading of additional equipment from vans owned and operated by a trucking company. Some of the equipment delivered by these vans was unloaded by the moving and storage company at the firm's new location, and the remainder was unloaded from the vans into the moving and storage company's own trucks and delivered to a warehouse. The charges for the various services rendered by the moving and storage company are listed as separate items on the invoices.

Section 4271 of the Internal Revenue Code of 1954 imposes a tax upon the amount paid within or without the United States for the transportation of property by rail, motor vehicle, water, or air from one point in the United States to another, with certain exceptions not here applicable. Under section 4272 of the Code, the tax applies only to amounts paid to a person engaged in the business of transporting property for hire.

Section 143.1(d) of Regulations 113, made applicable to the Internal Revenue Code of 1954 by Treasury Decision 6091, C.B. 1954-2, 47, provides that the term `transportation' means the movement of property by a person engaged in the business of transporting property for hire, including interstate, intrastate, and intra-city or other local movements. In general, the term includes accessorial services furnished in connection with a transportation movement, such as loading, unloading, storage, handling, and similar services and facilities.

M.T. 15, C.B. 1943, 1158, holds that amounts paid for packing and unpacking, or crating and uncrating, occurring before and after a transportation movement, are not taxable if the charges therefor are billed separately. Also, see Rev. Rul. 55-126, C.B. 1955-1, 536.

It is held that, under the circumstances described above, the services of (1) tagging and marking effects prior to removal, (2) planning of removal, (3) packing effects prior to removal, (4) marking of floors for equipment at destination, (5) unpacking and arranging effects after removal, and (6) installing appliances after movement to the new location, are not accessorial to the transportation movement performed by the moving and storage company in moving the firm's office effects and equipment to the new location. Therefore, the amounts paid for these services are not subject to the tax on transportation of property, provided the charges are shown as separate items on the invoices. Likewise, the tax does not apply to amounts paid to the moving and storage company for unloading equipment from the vans of another company at the firm's new location, provided the moving and storage company does not transport the property. However, where the property is unloaded from such vans into the moving and storage company's trucks and is transported by such trucks to another location, the unloading is accessorial to the taxable transportation movement furnished by the moving and storage company. In the latter case, the amount paid for unloading, as well as the amount paid for transporting the property involved, is taxable.