Rev. Rul. 70-178

M company purchases dump truck bodies from manufacturer X and separately purchases hoists from manufacturer Y. M sells these bodies with hoists in the same transaction. Combining or assembling a body and a hoist for sale or use in this manner is an act of manufacture, and M is liable for the manufacturers excise tax imposed by section 4061(a) of the Internal Revenue Code of 1954. See Rev. Rul. 69-195, C.B. 1969-1, 276. Sales of bodies (with hoists) by M are made at retail only.

Held, the manufacturers excise tax on M's sales of bodies (with hoists) is to be computed in accordance with the provisions of section 4216(b)(1)(A) of the Code. Under those provisions, the tax base is the lower of (i) the price for which the article is sold or (ii) a constructive sale price determined by the Commissioner. For this purpose, the constructive sale price is 75 percent of M's established retail price for each type of body (with hoist) but not less than M's cost.

Revenue Ruling 69-195 is hereby amplified.