Rev. Rul. 63-175

Advice has been requested whether the manufacturers excise tax, imposed by section 4191 of the Internal Revenue Code of 1954, applies to the sale by the importer of the article described below.

A company imports and sells a `miniature printer.' The printer, which measures approximately 8 1/2 by 11 inches, is manually operated and consists of two main parts. One part is a felt roller with a handle designed to hold a cartridge of spirit fluid the flow of which is regulated by a screw attachment. The other part is a metal plate on which is mounted a hinged frame. The printer is used with `masters' on which the material to be duplicated may be written with a typewriter, pencil, ball point pen, or any pointed object.

The duplicating process is accomplished by opening the frame, inserting a prepared master into the frame, placing blank paper on the metal plate, moistening the paper with the felt roller, closing the frame, and rolling the roller over the master which is pressed against the top sheet of paper. The printed copy is then removed from the frame, and the procedure is repeated for each print.

One master will make approximately 150 copies. It is stated that the material can be printed on paper, cardboard, wood, glass, plastic, or any other smooth surface. The printer is advertised for use by doctors, engineers, salesmen, secretaries, teachers, store owners, hotels, restaurants, small offices, and others.

Section 4191 of the Code imposes a tax upon the sale by the manufacturer, producer, or importer of various enumerated articles (including in each case parts or accessories of such articles sold on or in connection therewith, or with the sale thereof). Included in the enumeration are `duplicating machines.'

In determining whether a particular article comes within the category of the `duplicating machines' contemplated by section 4191 of the Code, the Internal Revenue Service considers the process employed to produce the copy. A taxable `duplicating machine' generally employs a prepared master, stencil, plate, or the equivalent, such as rubber or metal type, and can be used to make a large number of copies. Moreover, such an article generally prints on plain paper by a process in which ink or color is mechanically and rapidly transferred to the paper.

In view of the foregoing, the `miniature printer' described above comes within the scope of the term `duplicating machines' as used in section 4191 of the Code. It is immaterial that the printer is manually operated.

Accordingly, it is held that the printer is subject to the manufacturers excise tax, imposed by section 4191 of the Code, when sold by the importer.