Rev. Rul. 69-567

Advice has been requested as to the applicability of the manufacturers excise tax on automotive "parts or accessories," imposed by section 4061(b)(1) of the Internal Revenue Code of 1954, to separate sales of accessorial equipment of the type described in Revenue Ruling 69-143, C.B. 1969-1,280.

Revenue Ruling 69-143 lists examples of accessorial equipment used with certain automobile truck, trailer, and semitrailer tank bodies to serve some purpose related either to the operation of the bodies in receiving, preserving, transporting, and dispensing the products carried, or to the maintenance, safety, or preservation of the bodies. That Revenue Ruling holds that where a taxable tank body is sold by the manufacturer thereof fitted with such accessorial equipment, or where a "bare" tank body is sold in combination with such accessorial equipment, the equipment constitutes "parts or accessories therefor sold on or in connection therewith or with the sale thereof" within the meaning of section 4061(a)(1) of the Code. Consequently, the total sale price of the body and equipment is subject to the manufacturers excise tax imposed by that section.

Section 4061(b)(1) of the Code imposes a tax upon parts or accessories (other than tires and inner tubes) for any article enumerated in section 4061(a)(1) when sold by the manufacturer, producer, or importer.

Section 48.4061(b)-2(a) of the Manufacturers and Retailers Excise Tax Regulations provides that, in general, the term "parts or accessories" includes (1) any article the primary use of which is to improve, repair, replace, or serve as a component part of an automobile truck or bus chassis or body, or taxable tractor, (2) any article designed to be attached to or used in connection with such chassis, body, or tractor, to add to its utility or ornamentation, and (3) any article the primary use of which is in connection with such chassis, body, or tractor, whether or not essential to its operation or use. That section further provides, by way of example, that loading or unloading equipment designed to be attached to or to be primarily used in connection with a truck is a taxable part or accessory inasmuch as the article contributes to the load-carrying function of the truck.

Section 48.4061(b)-2(b) of the regulations provides that the term "parts or accessories" does not include articles which are not used primarily in the manufacture, repair, etc., of automobile trucks or tractors, but have a general use in the manufacture, repair, etc., of various articles. However, under the provisions of section 48.4061(b)-2(c) of the regulations, where material of a general nature is cut or otherwise transformed by any person into an automobile part or accessory, tax attaches at the time such part or accessory is sold by such person.

Accordingly, it is held that where articles of the type discussed in Revenue Ruling 69-143 are sold separately by the manufacturer thereof, such sales are subject to the tax imposed by section 4061(b)(1) of the Code, if the articles are designed for use or are primarily used with taxable tank bodies or any other articles enumerated in section 4061(a)(1).

Under the authority granted by section 7805(b) of the Code, this Revenue Ruling will not be applied to separate sales of accessorial equipment of the type discussed herein prior to January 1, 1970.