Rev. Rul. 60-270

Advice has been requested whether the manufacturers excise tax on motor vehicles applies to sales by the manufacturer, producer, or importer of a certain airport service vehicle.

The vehicle in question is used to supply airliners with their requirements of water and methyl-alcohol. The vehicle is equipped with two tanks fitted to a superstructure erected upon the vehicle frame. One of the tanks is an `additive direct injection' tank which carries a solution for the airliner's supercharge system. The second tank carries fresh water for refilling the drinking water tanks of the airliner. Each tank has a useable capacity of 235 gallons. These tanks are constructed and located on the vehicle in such a way that the vehicle can conveniently be used for servicing airplanes. Their presence, however, prevents the vehicle from being used effectively for the transportation of persons or property over public highways.

The vehicle is fitted with pumps, hose, ladders, gauges, etc., peculiar to airliner servicing operations. The ordinary highwaytype chassis used in the construction of this vehicle incorporates reinforced frames and heavy duty springs, wheels, axles, and tires, in order to carry the extra-heavy load. Because of its frequent use, the vehicle is equipped with a toggle switch instead of an ignition key switch.

Section 4061(a)(1) of the Internal Revenue Code of 1954 imposes a tax on the sale by the manufacturer, producer, or importer of automobile truck chassis, automobile truck bodies, automobile bus chassis, automobile bus bodies, truck and bus trailer and semitrailer chassis, truck and bus trailer and semitrailer bodies, and tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer. Section 4061(b) of the Code imposes a tax on the sale by the manufacturer of parts or accessories (with certain exceptions not here applicable) for any of the articles enumerated in section 4061(a).

Section 40.4061(a)-1(d) of the Manufacturers and Retailers Excise Tax Regulations provides, in part, that a chassis or body which is not designed for highway use is not subject to the tax imposed by section 4061(a) of the Code.

Revenue Ruling 57-440, C.B. 1957-2, 721, sets forth the position of the Service that the only vehicle chassis and bodies intended to be taxed by section 4061(a)(1) of the Code are those primarily designed for highway use.

Revenue Ruling 58-424, C.B. 1958-2, 762, states that in considering the applicability of the manufacturers excise tax to the sale of a truck chassis, the determining factor is whether such chassis is or is not primarily designed and adapted for highway use, and not the actual use to which the chassis in put.

Although the chassis described above is reinforced and certain heavy duty articles are used in the construction thereof, it is considered that the chassis remains primarily adapted for highway use. The fact that the chassis of this vehicle is not used on the highway does not affect its taxability. Accordingly, it is held that, upon the sale by the manufacturer, producer, or importer of the above-described vehicle, the chassis is subject to the manufacturers excise tax imposed by section 4061(a)(1) of the Code. It is further held that the body of this vehicle is not subject to the tax imposed by that section, since it is not primarily designed or adapted for the transportation of property over the highway.

The equipment mounted on this vehicle, which consists of special tanks, pumps, ladders, hose, etc., is not primarily designed or adapted for use on articles taxable under section 4061(a) of the Code and is, therefore, not subject to the manufacturers excise tax imposed by section 4061(b) of the Code.