Rev. Rul. 65-101

A company restores automobile hydraulic brake master and wheel cylinders to serviceable condition and sells them for use as replacement parts. Each cylinder is restored by a process which includes machining or reaming of the bore of the cylinder, inserting a sleeve therein under high pressure, polishing or honing the sleeve, and inserting a new piston, return spring, cups, or other necessary parts. This process is `rebuilding' within the meaning of section 48.4061(b)-3(a) of the Manufacturers and Retailers Excise Tax Regulations. Therefore, the manufacturers excise tax on automobile `parts or accessories,' imposed by section 4061(b) of the Internal Revenue Code of 1954, applies to such rebuilt cylinders sold by the `rebuilder' before January 1, 1965, the effective date of the exemption for rebuilt parts or accessories provided by section 4063(c) of the Code.