Rev. Rul. 56-192

In computing the manufacturers excise tax on exchange sales of rebuilt automobile parts (or accessories) by the rebuilder, the law provides, in effect, that the amounts allowed to customers for like used parts accepted in exchange are not to be included in the basis of tax on the rebuilt parts. In such case, however, the rebuilder's records must show that (1) the used parts accepted are identified as relating to sales of specific rebuilt parts and (2) such used parts are like, both in kind and in number, the rebuilt parts for which they are accepted in exchange. On outright sales of rebuilt parts, the tax must be computed on the actual prices charged. However, subsequent to an outright sale, the rebuilder may accept like used parts from the customer and credit his account for the value thereof. In such case, the rebuilder may take a credit or file a claim for refund in the amount of tax paid upon the portion of the sale price which is readjusted in this manner except that, for purposes of this credit or refund, the rebuilder may not readjust the sale price by crediting the value of any number of used parts in excess of the number of like rebuilt parts sold outright to that particular customer.