Rev. Rul. 61-99

A manufacturer of taxable business machines sells some of the machines and leases others. When the machines are sold, the manufacturer will, at the option of the purchaser, enter into a maintenance service contract under which the purchaser pays a prescribed monthly amount for the maintenance of the machines. However, when the machines are leased, the manufacturer provides the necessary maintenance of the machines under the terms of the lease agreement. Held , the manufacturers excise tax does not apply to the amounts paid under the maintenance service contracts for the maintenance of the machines which have been sold by the manufacturer. However, under the provisions of sections 4216(c)(1) and 4217 of the Internal Revenue Code of 1954, the manufacturers excise tax imposed by section 4191 of the Code applies to the amounts paid for the lease of the taxable machines, irrespective of the fact that some portion of each lease payment may be attributable to the maintenance of the machines.