Rev. Rul. 79-32

FACTS

As a result of a change in law, the Internal Revenue Service has determined a new basis for computing the excise tax on a manufacturer's, producer's, and importer's retail sales, on and after January 1, 1979, of truck trailer and semitrailer chassis and bodies.

LAW AND ANALYSIS

The applicable sections of the Internal Revenue Code are 4061(a)(1), which imposes a tax on the sale of certain motor vehicle articles, 4216(a), relating to the allowance of certain adjustments of the sale price, 4216(b)(1), as amended by Pub. L. No. 95-458, section 1, 95th Cong., 2d Sess., relating to the constructive sale price for retail sales.

Under section 4216(b)(1) of the Code, as amended, where a manufacturer, producer, or importer of taxable trailer or semitrailer bodies and chassis sells such articles at retail, the tax is to be computed on a constructive sale price that is a percentage of the actual selling price. This percentage is to be based on the highest price for which such articles are sold by manufacturers and producers in the ordinary course of trade, as determined by the Service. The manufacturer's cost is no longer a factor.

HOLDING

The Service has determined that the basis for computing the tax imposed by section 4061(a)(1) of the Code on and after January 1, 1979, where truck trailer and semitrailer chassis and bodies are sold at retail is 90 percent of the actual selling price after taking into account the adjustments provided by section 4216(a) unless it can be shown that a lower percentage should apply to a particular segment of the industry. No further adjustments under section 4216 are allowable.

EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 54-61, 1954-1 C.B. 259, Rev. Rul. 62-173, 1962-2 C.B. 249, Rev. Rul. 62-221, 1962-2 C.B. 251, Rev. Rul. 68-202, 1968-1 C.B. 477, Rev. Rul. 68-519, 1968-2 C.B. 513, and Rev. Rul. 69-580, 1969-2 C.B. 209, which hold otherwise, are obsolete as of January 1, 1979.

¹ Also released as IR-2068 dated December 29, 1978.