Rev. Rul. 69-206

Advice has been requested concerning applicability of the manufacturers excise tax on motor vehicle articles, imposed by section 4061(a)(1) of the Internal Revenue Code of 1954, to the article described below.

This article consists of a tank body that is designed to be mounted on a highway type truck or trailer chassis. The tank body is produced in sizes ranging from 400 to 2,500 gallon capacity. It is insulated and equipped with a heating mechanism, a pumping mechanism, and a spray bar and spray hose. It is used to spray hot liquid bituminous materials at a specified rate and temperature over road surfaces, streets, parking lots, and driveways. Bituminous materials are generally hauled in the vehicle to a job site from a batching plant or from a nurse tank located close to a job site. The vehicle may also be supplied from a transport truck which has brought materials from the refinery or other source of supply to the job site.

Section 4061(a)(1) of the Code imposes a tax upon sales by the manufacturer, producer, or importer of various motor vehicle articles, including automobile truck chassis and bodies and truck trailer and semitrailer chassis and bodies (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof).

Section 48.4061(a)-1(d) of the Manufacturers and Retailers Excise Tax Regulations provides that a chassis or body specified in section 4061(a) of the Code which is not designed for highway use is not subject to the tax imposed by that section of the law. Section 48.4061(a)-1(e) of the regulations provides that a trailer or semitrailer chassis or body primarily designed for highway use in combination with a taxable truck, bus, or tractor is subject to the tax imposed by section 4061(a)(1). This section further provides that the tax attaches even though the trailer or semitrailer may have equipment to perform functions other than in connection with the transportation of property or persons. However, no tax under section 4061(a) attaches to that part of the selling price of the complete unit which is reasonably attributable to such equipment provided that such part of the selling price is billed separately on the invoice to the customer or can be otherwise established by adequate records. It is held that the tank body described is a taxable motor vehicle article within the meaning of section 4061(a)(1) of the Code because it is designed for the transportation of property on the highway. Accordingly, sales of such article by the manufacturer thereof are subject to the tax imposed by that section. The fact that the tank body may be used in connection with the application of hot liquid bitumen does not remove it from classification as a taxable motor vehicle article.

Items of equipment installed on or sold with taxable tank bodies to serve as a means of receiving, preserving, transporting, or dispensing the products transported, or which are related to the maintenance, safety, or preservation of the tank bodies, are "parts or accessories therefor" within the meaning of section 4061(a)(1) of the Code. See Rev. Rul. 69-143, page 280, this Bulletin. Items of equipment installed on or sold with taxable tank bodies which are designed or adapted solely for the application of the products transported are not "parts or accessories therefor" within the meaning of section 4061(a)(1).

In view of the foregoing the described items of equipment (except the spray bar and spray hose) installed on the tank bodies in the instant case are "parts or accessories therefor" within the meaning of section 4061(a)(1) of the Code and charges for such items are includible in the sale price of the bodies upon which the tax is based. The spray bar and spray hose are designed and adapted solely for the application of bitumen on a road or other surface. Accordingly, no tax applies to that part of the selling price of the complete tank body which is reasonably attributable to such application equipment provided such part of the total selling price is billed separately on the invoice to the customer or can otherwise be established by adequate records.

Under the authority granted by section 7805(b) of the Code, the conclusion of this ruling that certain items of equipment installed on bituminous tank bodies are includible in the tax base of those bodies for purposes of section 4061(a)(1) of the Code will not be applied to such equipment sold prior to July 1, 1969. Also, this Revenue Ruling will not be applied to such equipment sold on or in connection with sales of the described tank bodies pursuant to firm contracts of sale entered into prior to April 28, 1969, regardless of when deliveries are made.