Rev. Rul. 62-158

Advice has been requested whether the manufacturers excise tax on motor vehicle articles applies to sales by the manufacturer of the three-wheel electrically-powered motor vehicles described below.

A company manufactures and sells three-wheel electrically-powered motor vehicles which are designed for use on streets and highways for shopping, local visiting, and relatively short pleasure trips. These vehicles, which are powered by three or four heavy duty six-volt storage batteries, are about 80 inches long and 38 inches wide, and they weigh about 425 pounds each without the batteries. Each vehicle has one front wheel and two rear wheels and is driven by means of a direct chain drive.

Included as standard equipment on each of these vehicles are dual headlights and taillights, an electric horn, a rearview mirror, and two-wheel automotive-type internal expanding brakes. They are also equipped with either hand controls or foot controls. Wrap-around windshields and custom-type tops are available as optional accessories.

These vehicles, which are designed to accommodate two persons each, have three forward and three reverse speeds, the maximum speed being approximately 16 miles per hour. Normally, they may be driven more than 30 miles before the batteries need recharging. The recharging of the batteries is accomplished by plugging into standard house current.

Although these vehicles are widely used on streets and highways they are not recommended for use on high-speed `freeways'; in fact, their use on such freeways is prohibited in some areas.

Section 4061(a)(2) of the Internal Revenue Code of 1954 imposes a tax upon sales by the manufacturer, producer, or importer of automobile chassis and bodies other than those taxable under section 4061(a)(1) of the Code. A sale of an automobile, for purposes of this paragraph of the Code, is considered to be a sale of the chassis and of the body.

The fact that a vehicle has less than four wheels does not, of itself, place the vehicle outside the scope of the articles taxable under section 4061(a)(2) of the Code. Moreover, in determining taxability it is immaterial that a vehicle is propelled by a self-contained electric power source rather than by an internal combustion engine.

The three-wheel electrically-powered motor vehicles described above, which are designed for the transportation of persons on streets and highways, are considered to be `automobiles' within the meaning of section 4061(a)(2) of the Code. Therefore, it is held that the manufacturers excise tax imposed by that section applies to sales of these vehicles by the manufacturer thereof.

See Revenue Ruling 60-212, C.B. 1960-1, 413, which holds that a certain four-wheel electrically-operated motor vehicle is an automobile within the meaning of section 4061(a)(2) of the Code.