producers, or importers of articles subject to the manufacturers excise taxes imposed under Chapter 32, sell such articles to a State for use by the National Guard. Held, such sales are for the exclusive use of a State within the meaning of sections 4055 and 4221 (a) (4). Therefore, in accordance with the provisions of those sections, the excise taxes imposed under Chapters 31 and 32 do not apply to such sales. S.T. 795, C.B. XÎV-1, 413 (1935), is hereby superseded, since the provisions thereof are restated under current law in this Revenue Ruling. The exemptions relating to "nonprofit educational organizations" do not apply to transactions with the Girl Scouts of the United States of America. SECTION 4057.-EXEMPTION FOR NONPROFIT 26 CFR 148.1-4: Tax-free sales or services to certain nonprofit educational organizations. (Also Sections 4221, 4294.) Rev. Rul. 68-569 The Girl Scouts of the United States of America (including its local councils) is a nonprofit organization which has been granted exemption from Federal income tax under section 501 (a) of the Internal Revenue Code of 1954 as an organization described in section 501(c) (3). The organization provides a recreational and camping program for its members and also provides informal instruction in a variety of subjects designed to develop manual skills and to promote physical, mental, and moral awareness and civic responsibility. Held, the organization, is not a "nonprofit educational organization," within the meaning of sections 4057 (b), 4221(d) (5), and 4294(b) of the Code, and applicable regulations, as an organization whose primary function is the presentation of formal instruction and which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Accordingly, the exemptions from the retailers excise taxes and the manufacturers excise taxes, provided by sections 4057(a) and 4221(a)(5) of the Code, do not apply to sales of taxable articles to the organization. Furthermore, the exemption from the communications and transportation taxes, provided by section 4294 (a) of the Code, does not apply to amounts paid by the organization for taxable services or facilities furnished to it. CHAPTER 32.-MANUFACTURERS EXCISE TAXES SUBCHAPTER A.-AUTOMOTIVE AND RELATED ITEMS Collection tanks of certain refuse trucks are truck bodies subject to the manufacturers tax; hydraulic compactors and hydraulic drum-dumps designed for use with the tanks are taxable parts or accessories. SECTION 4061.-IMPOSITION OF TAX 26 CFR 48.4061 (a)-1: Imposition of tax. (Also 48.4061 (a)-4, 48.4061 (b)−2.) Rev. Rul. 68-380 Advice has been requested regarding application of the manufacturers excise tax imposed by section 4061 of the Internal Revenue Code of 1954 to the sale of certain refuse truck bodies. A company manufactures hydraulic tilt-down refuse truck bodies and installs them on taxable truck chassis furnished by a distributor. The bodies consist of a collection tank, a refuse compactor, and, at the option of the purchaser, a hydraulic drum-dumping attachment used to place refuse in the bodies. Section 4061 (a) (1) of the Code imposes a tax upon sales by the manufacturer, producer, or importer of automobile truck chassis and bodies (including parts or accessories therefor sold on or in connection therewith or with the sale thereof). Section 4061 (b) of the Code imposes a tax upon sales by the manufacturer, producer, or importer of parts or accessories (other than tires and inner tubes) for any of the articles enumerated in section 4061 (a) (1) of the Code. Section 48.4061 (b)-2(a) of the Manufacturers and Retailers Excise Tax Regulations provides that, in general, the term "parts or accessories" includes (1) any article the primary use of which is to improve, repair, replace, or serve as a component part of an automobile truck or bus chassis or body, or taxable tractor, (2) any article designed to be attached to or used in connection with such chassis, body, or tractor to add to its utility or ornamentation, and (3) any article the primary use of which is in connection with such chassis, body, or tractor, whether or not essential to its operation or use. An article such as a towing cradle or loading or unloading equipment designed to be attached to or to be primarily used in connection with a truck is a taxable part or accessory inasmuch as the article contributes to the load-carrying function of the truck. The collection tanks mentioned above are truck bodies subject to the manufacturers excise tax imposed by section 4061 (a) (1) of the Code. The hydraulic compactors and the hydraulic drum-dumps contribute to the loading function of the bodies, thus adding to their utility. They are, therefore, parts or accessories for the bodies and includible in the tax base of the bodies when sold on or in connection therewith. Separate sales of the hydraulic compactors and the hydraulic drum-dumps are subject to the manufacturers excise tax on parts or accessories imposed by section 4061 (b) (1) of the Code. The manfacturers tax does not apply to a self-propelled four-wheel vehicle designed for use in performing horticultural operations in orchards, or to a boom designed to be mounted on the vehicle. 26 CFR 48.4061 (a)-1: Imposition of tax. (Also 48.4061 (b)-2.) Rev. Rul. 68-381 A company manufactures a self-propelled four-wheel vehicle designed for use in orchards by workers engaged in picking, pruning, thinning, topping, and shaking trees. A boom with a work platform or cage attached to the end is mounted in the center of the vehicle as an integral part. The worker controls the vehicle and operates the boom from the work platform or cage. The vehicle moves between rows of trees and can attain a maximum speed of 2.5 miles per hour. It is towed from one job location to another. Held, the vehicle is not an automobile truck or trailer chassis designed for highway use within the meaning of section 4061 (a) (1) of the Internal Revenue Code of 1954. Furthermore, the boom is not a part or accessory for any of the articles enumerated in section 4061 (a) (1), within the meaning of section 4061 (b) (1) of the Code. Therefore, the manufacturers excise tax imposed by section 4061 of the Code does not apply to sales by the manufacturer of the vehicle and boom. described above. A tractor-type, self-propelled, three-wheeled chassis designed primarily for use in applying farm chemicals to fields is not subject to the manufacturers tax. 26 CFR 48.4061(a)-1: Imposition of tax. Rev. Rul. 68-462 A company manufactures a tractor-type self-propelled, threewheeled chassis for use in spreading liquid or dry fertilizers, lime, insecticides, herbicides, and other farm chemicals. The chassis is so designed as to permit the mounting of a tank body thereon. Due to the tricycle design, the chassis is highly maneuverable and can be used in small fields as well as large fields at speeds over 35 miles per hour, spraying a 60 foot swath. The extra wide, low profile terra-tires permit the chassis to be driven through muddy fields without rutting, gouging, or disturbing the cultivated surface. The lug-type treads on the high floatation tires used on this three-wheeled chassis are typical of those used on vehicles characterized as farm tractors. The chassis has a maximum speed of 45 miles per hour and is built with a heavyduty rear axle. Held, sales by the manufacturer of the described chassis are not subject to the manufacturers excise tax imposed by section. 4061(a)(1) of the Internal Revenue Code of 1954 because it is primarily designed for use other than on highways. "Tree movers," consisting of truck or semitrailer chassis upon which are mounted special machines designed to dig up and replant trees, are not subject to the tax on chassis and bodies or the tax on parts and accessories. 26 CFR 48.4061 (a)-1: Imposition of tax. (Also Section 4061; 48.4061 (b)-2.) Rev. Rul. 68-570 A company manufactures and sells automotive articles designed to move trees. The completed units consist of either a truck chassis or a semitrailer chassis upon which is mounted a special machine designed to dig up and replant trees on development sites or other open areas, such as parks, golf courses, and nurseries. The chassis are constructed without springs, and the chassis frames are mounted directly on a rear axle assembly. The vehicles are equipped with off-highway traction tread tires, and any highway use of the vehicles is incidental to their jobsite function. Held, since neither the described chassis nor the special machine mounted thereon is primarily designed for use in the transportation of persons or property over the highway, the chassis are not motor vehicle articles of a type enumerated in section 4061 (a) (1) of the Internal Revenue Code of 1954, nor are the tree digging machines automotive parts or accessories, within the meaning of section 4061 (b) (1). Accordingly, sales of the described "tree movers" by the manufacturer thereof are not subject to the manufacturers excise taxes imposed by these sections. One-horse and two-horse trailers suitable for use with passenger automobiles are taxable under section 4061 (a) (2) of the Code; whereas, three-horse and four-horse trailers and stock trailers designed primarily as carriers of livestock are taxable under section 4061 (a) (1); Revenue Ruling 59-358 superseded. 26 CFR 48.4061 (a)-1: Imposition of tax. Rev. Rul. 68–584 Advice has been requested regarding application of the manufacturers excise tax imposed by section 4061 (a) of the Internal Revenue Code of 1954 to sales by the manufacturer of the trailers described below. Item (1). Stock trailers designed and manufactured primarily for use by farmers as carriers of livestock (such as cattle, hogs, sheep, horses, and goats) and other loads, including loose or sacked grain, baled hay, animal salt, or bundled feed. The trailers are used by farmers to transport livestock to a market place, from pasture to pasture, or to veterinarians. Some models are equipped with a conventional tongue and bolt-type hitch and others are equipped with a gooseneck-type hitch designed to place the towing point in the center of a pickup truck bed. Other equipment includes turn signals, stoplights, taillights, and such options as electric brakes and a top. Item (2). One-horse, two-horse, three-horse, and four-horse trailers designed and sold for transporting horses over the highways. Some models of these trailers have such features as a dressing room, tack compartment, feed manger, or sleeping compartment. The one-horse and two-horse trailers are equipped with a conventional tongue and ball-type hitch. The three-horse and four-horse trailers are equipped with either a ball-type or a gooseneck-type hitch. Section 4061 (a)(1) of the Code imposes a tax upon the sale by the manufacturer, producer, or importer of certain enumerated articles including truck trailer and semitrailer chassis and bodies. Section 4061 (a) (2) of the Code imposes a tax upon sales of chassis and bodies for trailers and semitrailers (other than house trailers) suitable for use in connection with passenger automobiles, including in each case parts and accessories therefor sold on or in connection therewith. Section 48.4061 (a)-1 (e) of the Manufacturers and Retailers Excise Tax Regulations provides that a trailer or semitrailer chassis or body primarily designed for highway use in combination with a taxable truck, bus, or tractor is subject to the tax imposed by section 4061 (a) (1) of the Code. That section further provides that trailers and semitrailers which are suitable for use in combination with passenger automobiles, but which are not house trailers, are subject to the tax imposed by section 4061 (a) (2). The regulations also cite as an example of a vehicle which is not a trailer within the meaning of section 4061 (a), a farm wagon primarily designed for use on farms, although it may be used on the highway. As used in the foregoing statute and regulations, the term "suitable for use" means possessing actual and practical fitness for use in connection with passenger automobiles. With respect to Item (1), the facts indicate that the stock trailers are not farm wagons primarily designed for use on farms, within the meaning of section 48.4061 (a)-1 (e) of the regulations, but are trailers designed for various uses on the highway. Furthermore, they are primarily designed for use in combination with taxable trucks and do not have an actual and practical fitness for use in combination with passenger automobiles. Therefore, sales by the manufacturer of such trailers are subject to the manufacturers excise tax imposed by section 4061 (a) (1) of the Code. With respect to Item (2), the one-horse and two-horse trailers are considered to be suitable for use in connection with passenger automobiles, inasmuch as they possess actual and practical fitness for such use. Accordingly, sales by the manufacturer of these trailers are subject to tax at the rate imposed by section 4061 (a) (2) of the Code. However, horse trailers with a capacity for carrying more than two horses, such as the three-horse and four-horse trailers in the instant case, are not considered to possess actual and practical fitness for use in combination with passenger automobiles. Therefore, they are concluded to be primarily designed for highway use in combination with taxable trucks. Accordingly, sales by the manufacturer of such trailers are subject to tax at the rate imposed by section 4061(a)(1) of the Code. Revenue Ruling 59-358, C.B. 1959-2, 254, holds that the sale by a manufacturer of a horse trailer designed to be attached to and pulled by passenger automobiles is subject to tax under section 4061 (a) (2) of the Code. Since that conclusion is incorporated herein, Revenue Ruling 59-358 is hereby superseded. |