Rev. Rul. 58-149

Advice has been requested whether the tax on the transportation of property applies to an amount paid by a shipper to a carrier for weighing empty tank cars.

A carrier billed a shipper for weighing an empty tank car before it was loaded for an outbound shipment. The weighing was performed at the request of the shipper to determine the exact weight of the tank car. The shipper also has had occasion to request the carrier to weigh inbound tank cars after they have been unloaded as an additional check on the weight of the contents of the tank car. The tariffs of the carrier provide that, when either an empty or a loaded car is weighed or reweighed at the request of the consignor or consignee, a charge will be made by the carrier for the weighing, switching, and/or spotting services performed in connection with each weighing. However, there will be no charge made by the carrier provided that (1) in the case of the reweighing of a car containing a commodity which is not subject to shrinkage from its inherent nature, the reweighing discloses error in the billed weight of more than the tolerance provided in the tariff, (2) in the case of the weighing or reweighing of an empty car, such weighing or reweighing discloses error in the tare weight in excess of the tolerance provided in the tariff and, (3) in the case where reweighing requires the weighing of both the loaded and empty car, the difference between the net weight obtained by the weighing and the previous net weight exceeds the tolerance provided in the tariff.

Section 4271(a) of the Internal Revenue Code of 1954 imposes a tax upon the amount paid within or without the United States for the transportation of property by rail, motor vehicle, water, or air from one point in the United States to another. Under the provisions of section 143.1(d) of Regulations 113, made applicable to the 1954 Code by Treasury Decision 6091, C.B. 1954-2, 47, the term `transportation' means the movement of property by a person engaged in the business of transporting property for hire, including interstate, intrastate, and intracity or other local movements, as well as towing, ferrying, switching, etc. In general, it includes accessorial services furnished in connection with a transportation movement, such as loading, unloading, storage, demurrage, ventilation, refrigeration, icing, and similar services and facilities.

The weighing service requested by the shipper is primarily for the purpose of determining errors in the billed weight, tare weight, etc. Accordingly, it is held that such weighing service is an accessorial service furnished in connection with the prior or subsequent transportation of the commodity involved. Therefore, the amount paid to the carrier for such service, when furnished at the request of a shipper or consignee and in connection with a taxable transportation movement, is subject to the tax on the transportation of property, regardless of whether the charge is billed separately.