Rev. Rul. 63-198

Advice has been requested concerning the applicability of the manufacturers excise tax on automobile `parts or accessories' to sales by the manufacturer of `automobile thermometers.' These thermometers are designed to be attached to the sum visor of automobiles by means of metal clips and are used to indicate the temperature inside the automobiles.

Section 4061(b) of the Internal Revenue Code of 1954 imposes a tax on the sale by the manufacturer, producer, or importer of parts or accessories (other than tires and inner tubes and other than automobile radio and television receiving sets) for any of the articles enumerated in section 4061(a) of the Code.

Section 40.4061(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 other automobile 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.

Since the thermometers described above are designed to be attached to and are primarily used in connection with automobiles, they are automobile `parts or accessories' within the meaning of section 4061(b) of the Code and section 40.4061(b)-2(a) of the regulations. Therefore, it is held that these thermometers are subject to the manufacturers excise tax on automobile `parts or accessories' when sold by the manufacturer.

The conclusion expressed herein is equally applicable under the provisions of section 48.4061(b)-2 of the regulations, effective January 1, 1964.