Rev. Rul. 73-215

Advice has been requested whether the manufacturers excise tax imposed by section 4071(a) of the Internal Revenue Code of 1954 applies to tires and inner tubes that are original equipment on motorcycles and motor scooters imported and sold by the importer.

Section 4071(a) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of certain enumerated articles, including tires and inner tubes. Section 4061(b)(1) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of parts or accessories (other than tires and inner tubes) for any of the articles enumerated in section 4061(a)(1). The Code does not impose a manufacturers excise tax on the sale of motorcycles or motor scooters.

Rev. Rul. 67-413, 1967-2 C.B. 372, holds that the importation of motorcycles and motor scooters equipped with tires, inner tubes, and spark plugs as original equipment is not considered to be the importation of tires, inner tubes, and spark plugs because these articles are considered to have lost their identity as separate articles. Consequently, under that Rev. Rul., on his sale of the imported motorcycles and motor scooters, the importer incurs no manufacturers excise tax liability under either section 4071 of the Code or section 4061(b)(1), which imposes a tax on spark plugs that are not exempt by virtue of section 4061(b)(2).

However, effective December 11, 1971, section 401(f) of the Revenue Act of 1971, Public Law 92-178, 1972-1 C.B. 443 at 465, amended section 4071 of the Code by adding subsection (e). This subsection provides that if an article not taxable under section 4061 of the Code is imported into the United States and is equipped with tires or inner tubes (other than bicycle tires and inner tubes), the importer of the article shall be treated as the importer of such tires and inner tubes and the sale of the article by the importer will be treated as the sale of such tires and inner tubes.

The importation of motorcycles and motor scooters equipped with tires and inner tubes as original equipment (that is, the tires and tubes with which the vehicle is equipped when it is imported) falls within the ambit of section 4071(e) of the Code. Accordingly, it is held that, effective December 11, 1971, the importer is liable for the manufacturers excise tax imposed by section 4071(a) of the Code with respect to original equipment tires and inner tubes sold on or in connection with motorcycles and motor scooters that he imports. It is further held that the importer incurs no excise tax liability with respect to the original equipment spark plugs.

Rev. Rul. 67-413 is hereby superseded.