Rev. Rul. 71-484

Advice has been requested whether the article described below is subject to the manufacturers excise tax imposed by section 4061(b) of the Internal Revenue Code of 1954 when sold by the manufacturer. A company manufactures and sells a device designed to be attached to existing equipment on fuel delivery trucks to control the delivery of fuel. The device protects a dealer and his customers from losses caused by accidental or deliberate mishandling of the delivery procedure. It is used in conjunction with the pumping system, meter, and printing head on the trucks. It consists of an operating panel, a power package to drive the printing head, and a dispensing valve that is mounted on the fuel delivery line. The truck driver cannot deliver fuel until the device has been actuated.

The driver puts the device into operation by inserting a delivery ticket into the printing head and depressing a designated button on the operating panel which results in an automatic imprint of the first reading on the ticket. Fuel may not be delivered until the ticket is inserted and the initial reading printed. This releases a valve which allows the driver to dispense the desired quantity of fuel. After pump-out is completed, a final reading is recorded on the ticket by depressing another button. A cycle counter on the operating panel maintains an accurate record of the number of deliveries made. In addition, should the driver neglect to push the appropriate button on the operating panel for a final reading at the completion of his delivery, the delivery ticket will be automatically imprinted with the final reading by a mechanism in the device which detects forward and backward vehicular motion. A time delay, extending from zero to ten minutes for this automatic imprinting, is incorporated within the device. The delay is designed to prevent the final imprint from being placed on the delivery ticket should the driver have to move the truck for a brief period during delivery.

Section 4061(b)(1) of the Code imposes a tax on parts or accessories (other than tires and inner tubes) for any of the articles enumerated in section 4061(a)(1) when sold by the manufacturer, producer, or importer thereof. Section 4061(a)(1) enumerates, among other articles, truck bodies and chassis.

Section 48.4061(b)-2(a) of the Manufacturers and Retailers Excise Tax Regulations provides that, in general, the term "parts or accessories" includes (1) any article the primary use of which is to improve, repair, replace, 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 connection with such chassis, body, or tractor, whether or not essential to its operation or use. In addition, this section of the regulations provides that loading or unloading equipment designed to be attached to or to be primarily used in connection with a truck is a taxable part or accessory inasmuch as the article contributes to the load-carrying function of the truck.

The device described above is designed to be attached to and used in connection with a taxable motor vehicle to control the delivery of fuel in order to add to the utility of the load-carrying function of the vehicle. Furthermore, its primary use is in connection with a taxable motor vehicle.

Accordingly, it is held that this device is an automotive part or accessory within the meaning of section 4061(b) of the Code, and sales thereof by the manufacturer are subject to the tax imposed by that section.