Rev. Rul. 68-480

Advice has been requested whether the article described below is subject to the manufacturers excise tax on automotive parts or accessories, imposed by section 4061(b)(1) of the Internal Revenue Code of 1954.

A company manufactures and sells hydraulic pressured water systems that are designed for use with concrete mixer trucks. Some of these water systems are sold separately by the company, whereas others are sold on or in connection with concrete mixer trucks.

This hydraulic pressured water system serves to retemper the concrete in the mixer body to the desired consistency. It consists of several components, as follows: a 40-gallon water tank, a hydraulic valve, a motor and pump, a base, and perforated pipe.

Section 4061(b)(1) of the Code imposes a tax on parts or accessories (other than tires and inner tubes) for any article enumerated in section 4061(a)(1) sold by the manufacturer, producer, or importer. Enumerated in section 4061(a)(1) of the Code (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof) are chassis and bodies for trucks, truck trailers and semitrailers, and tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer.

Section 48.4061(b)-2(a) of the Manufacturers and Retailers Excise Tax Regulations defines the term `parts or accessories' to include (1) any article the primary use of which is to improve, repair, 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 connction with such chassis, body, or tractor whether or not essential to its operation or use.

The hydraulic pressured water system described above is designed and is primarily used to serve as a component part of a truck body. Therefore, it is held that these water systems are subject to the manufacturers excise tax imposed by section 4061(a)(1) of the Code when sold by the company on or in connection with a taxable concrete mixer truck body of its manufacture. Separate sales of the water systems, on the other hand, are subject to the tax on parts or accessories imposed by section 4061(b)(1) of the Code.

Revenue Ruling 67-282, C.B. 1967-2, 363, as modified by Revenue Ruling 67-418, C.B. 1967-2, 364, holds that concrete mixer truck bodies are subject to the tax imposed by section 4061(a)(1) of the Code. However, under the authority of section 7805(b) of the Code, that Revenue Ruling provides that it will not be applied with respect to mixer bodies sold by the manufacturer, producer, or importer thereof before July 1, 1968.

The hydraulic pressured water systems described in this Revenue Ruling are `parts or accessories' for concrete mixer truck bodies rather than for truck chassis. Therefore, under the authority of section 7805(b) of the Code, this Revenue Ruling will not be applied with respect to such water systems sold by the manufacturer, producer, or importer thereof before July 1, 1968.