Rev. Rul. 67-413

Advice has been requested whether the manufacturers excise tax on tires, inner tubes, and automotive parts or accessories applies to tires, inner tubes, and spark plugs that are original equipment on motorcycles and motor scooters which are imported and sold by the importer.

Section 4071 of the Internal Revenue Code of 1954 imposes a tax on the sale by the manufacturer, producer, or importer of certain enumerated articles, including tires and inner tubes. Section 4061(b)(1) of the Code imposes a tax on the sale by the manufactuer, producer, or importer of parts or accessories (other than tires and inner tubes) for any of the articles enumerated in section 4061(a)(1) of the Code.

If tires and inner tubes are imported and sold as such, the tax imposed by section 4071 of the Code applies to the importer's sale of the tires and inner tubes; sales of spark plugs imported as such are taxable under section 4061(b)( 1) of the Code, unless exempt by virtue of section 4061(b)(2).

However, a motorcycle or motor scooter constitutes a single commercial article with the tires and inner tubes mounted thereon comprising some of the components of that article which has a distinct identify as such. As noted, section 4071 of the Code imposes a tax on tires and inner tubes, but as component parts of an imported motorcycle or motor scooter, they have lost their identity as separate articles and are not considered to have been imported as tires and inner tubes. This rationale would also apply to taxable spark plugs installed in the imported vehicles prior to importation. See Revenue Ruling 57-96, C.B. 1957-1, 374, which holds that the tax on electric light bulbs does not apply to sales by the importer of complete miniature bulb light sets since the importation of the sets is not regarded as the importation of electric light bulbs as such.

Accordingly, in the instant case, on his sales of imported motorcycles and motor scooters, the importer incurs no liability for the manufacturers excise tax on the tires, inner tubes, or spark plugs which are original equipment thereon.