Rev. Rul. 65-73

A retailer of articles subject to the retailers excise taxes imposed by sections 4001, 4011, 4021, and 4031 of the Internal Revenue Code of 1954 may take a taxable article out of stock and use it either for his own presonal needs or as a bona fide gift to a relative or friend. In the alternative, the retailer may purchase the taxable articles for such use.

Held , where the retailer takes a taxable article from his regular stock of merchandise purchased for resale and either uses the article for his own personal needs or uses it as a bona fide gift to a relative or friend, the transaction is not a sale at retail and no liability for the retailers excise tax is incurred by the retailer. However, if a taxable article is purchased by the retailer expressly for his own use or for use as a bona fide gift to a relative or friend, the transaction between the retailer and his vendor is a sale at retail. The vendor is liable for the retailers excise tax, based on the price for which the article is sold to the retailer.