Rev. Rul. 72-55

Advice has been requested as to the applicability of the exemption from the manufacturers excise tax on motor vehicle articles provided by section 4063(a)(1) of the Internal Revenue Code of 1954 to the article described below. The Internal Revenue Service has also reconsidered the holding in Revenue Ruling 67-232, C.B. 1967-2, 365.

A company manufactures and sells a one-piece top designed to be mounted on the body of a pickup truck. It is secured to the truck by being bolted to the body sides. The basic top is equipped with screened side-windows and a rear access door. The door may be installed to open either vertically or horizontally, and may be opened from the inside and outside. When installed, the top, together with the truck body sides and the truck floor, provides an enclosed weatherproof area that can be used for sleeping quarters. Optional features such as additional windows, swing-up bunks, inside dome light, roof vent, baggage racks, insulation, and roof ladder are available with the basic top.

Section 4061(a)(1) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of certain enumerated motor vehicle articles.

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 4063(a)(1) of the Code was amended effective June 22, 1965 by the Excise Tax Reduction Act of 1965, Public Law 89-44, C.B. 1965-2, 568, at page 588, to provide that the tax imposed under section 4061 shall not apply in the case of articles designed to be mounted on trucks, truck chassis, or automobile chassis and which are to be used primarily as living quarters. Section 4063(a)(1) of the Code was also amended, effective December 31, 1970, by the Excise, Estate and Gift Tax Adjustment Act of 1970, Public Law 91-614, C.B. 1971-1, 533, at page 538 by insertion of the phrase "or camping accommodations," after "living quarters."

In order for a one-piece top to be exempt as being designed to be used primarily for living quarters or camping accommodations, it must provide shelter and security for an individual and his possessions, and possess other physical features that indicate special adaptation of the top for living or camping purposes.

For example, it must be capable of being used for sleeping purposes. However, to be exempt from the tax it is not necessary that the top have a separate floor and lower sidewalls, or that it be able to function as living quarters or camping accommodations when it is off the truck, as well as when it is mounted on the truck. Furthermore, it is not required that the mounted top provide sufficient room for an occupant to stand.

The basic top in the instant case contains special design adaptations for use as living quarters or camping accommodations. These design features include an adequate weatherproof area for sleeping, screened windows, and a rear access door capable of being operated from the inside of the vehicle. Accordingly, the top is within the exemption provided by section 4063(a)(1) of the Code, and it is held that the manufacturer's sales of the top on and after December 31, 1970, are not subject to the tax imposed by section 4061(b)(1) of the Code. This exemption is not affected by the occasional use of the tops for other purposes, such as protecting cargo in transit.

Upon reconsideration of Revenue Ruling 67-232, C.B. 1967-2, 365, it is held that truck tops of the type described in that Revenue Ruling are within the exemption provided by section 4063(a)(1) of the Code, prior to amendment by the Excise, Estate and Gift Tax Adjustment Act of 1970. Accordingly, a manufacturer's sales of such truck tops on or after June 22, 1965 and before December 31, 1970, are not subject to the tax imposed by section 4061(b)(1) of the Code. See Woodward vs. U.S., 442 F. 2d 333 (1971), and 20th Century Manufacturing Co., vs. U.S., 444 F. 2d 1109 (1971). The Internal Revenue Service will not follow the decision in Herren vs. U.S., 443 F. 2d 1363 (1971).

Since the holding in Revenue Ruling 67-232 is inconsistent with the holding in the instant ruling, Revenue Ruling 67-232 is hereby revoked.