Rev. Rul. 58-375

Advice has been requested concerning the applicability of the retailers excise tax on luggage, handbags, etc., to the sale of a bag made of leather, which is sold for the purpose of carrying books and other school supplies. The bag is equipped with a handle, has two straps for closure purposes, but does not have any partitions, pockets, or zippers.

Section 4031 of the Internal Revenue Code of 1954 imposes a tax upon the sale at retail of various articles, including brief cases made of leather or imitation leather.

Section 320.60 of Regulations 51, made applicable to the 1954 Code by Treasury Decision 6091, C.B. 1954-2, 47, states that the term `brief cases made of leather or imitation leather' includes all receptacles commonly or commercially known and sold as such, which are made of leather or imitation leather, regardless of size or the purpose for which purchased. This term also includes so-called `ring binders,' `portfolios,' `envelopes,' etc., which are made of leather or imitation leather, regardless of size, provided such articles are capable of being closed on all four sides by means of a zipper, lock, snap fastener, or some other such device.

Accordingly, so-called `schoolbags,' which are made of leather or of any material which has been processed or treated in any manner to simulate or imitate leather and which can be closed on all four sides by means of a zipper, lock, snap fastener, or some other similar device so as to serve as a brief case, are subject to the retailers excise tax when sold at retail. The statute contains no provisions which would exempt from tax the sale of such bags to students for educational purposes. Therefore, it is held that the bag described above falls within the meaning of the term `brief cases made of leather or imitation leather,' and is subject to the retailers excise tax on luggage, handbags, etc.