Rev. Rul. 60-78

Advice has been requested whether the retailers excise tax is applicable to certain charges for special packing of clocks.

A manufacturer makes retail sales of some of its clocks to a customer who requires that the clocks be packed for shipment in a special protective material to prevent deterioration resulting from exposure to tective material to prevent deterioration resulting from exposure to atmospheric conditions during shipment or storage. This special and is in addition to the standard packing required for clocks sold in regular trade.

Section 4051 of the Internal Revenue Code of 1954 provides that, in determining the price for which an article is sold, there shall be included any charge for coverings and containers of whatever nature, and any charge incident to placing the article in condition packed ready for shipment.

Section 320.6 of Regulations 51, made applicable to the 1954 Code by Treasury Decision 6091, C.B. 1954-2, 47, states that the amount paid for the article and its covering or container is the basis for computing the tax even though a separate charge for such covering or container is billed on the invoice.

A charge for special packing of taxable articles to prevent deterioration during shipment or storage is considered to be a part of the sale price for purposes of the retailers excise tax. Accordingly, it is held that the charges for special packing of the clocks in the instant case are to be included in the taxable sale price of the clocks.