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Revenue Ruling 60-233

Rev. Rul. 60-233 1960-2 C.B. 321

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Headnote

A starter pistol which uses blank ammunition and which cannot discharge by an explosive a shot, bullet, or projectile is not a pistol, revolver, or firearm (other than a pistol and revolver) within the meaning of section 4181 of the Internal Revenue Code of 1954. Accordingly, sales of such starter pistols are not subject to the manufacturers excise tax on firearms imposed by that section of the Code. However, where a person removes the original barrels from such starter pistols and inserts prefitted, bored, and rifled barrels in the pistols so that a shot, bullet, or projectile can be discharged by an explosive, such person is a “manufacturer” of taxable firearms within the meaning of section 4181 of the Code. Therefore, his sales of the converted starter pistols described above are subject to the manufacturers excise tax on firearms.

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ISSUE

Advice has been requested whether the manufacturers excise tax on firearms, imposed by section 4181 of the Internal Revenue Code of 1954, applies to sales of starter pistols of the type used for signaling at athletic events or to sales of converted starter pistols which are fitted with bored and rifled barrels.

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FACTS

A manufacturer produces and sells starter pistols of the type used for signaling purposes at track meets, football games, and other athletic events. The pistols are constructed so that they use blank ammunition to produce an explosive sound. The starter pistols cannot discharge a shot, bullet, or projectile. Another manufacturer imports similar starter pistols and changes the barrels on such pistols before he sells them to his customers. He removes the original barrels from the imported starter pistols and inserts prefitted, bored, and rifled barrels. The converted pistols can discharge a shot, bullet, or projectile by an explosive.

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LAW AND ANALYSIS

Section 4181 of the Code imposes a tax upon the sale by the manufacturer, producer, or importer of pistols, revolvers, firearms (other than pistols and revolvers), shells, and cartridges. Section 48.4181-2(c) of the Manufacturers and Retailers Excise Tax Regulations provides that the term “firearms” means any portable weapons, such as rifles, carbines, machine guns, shotguns, or fowling pieces, from which a shot, bullet, or other projectile may be discharged by an explosive. Capability of discharging a projectile by means of an explosive is one of the factors which are to be considered in determining whether a device is a “pistol” or “revolver.”

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HOLDING

It is held that a starter pistol which uses blank ammunition and which cannot discharge by an explosive a shot, bullet, or projectile is not a pistol, revolver, or firearm (other than a pistol and revolver) within the meaning of section 4181 of the Code. Accordingly, sales of such starter pistols are not subject to the manufacturers excise tax on firearms imposed by that section of the Code. However, where a person removes the original barrels from such starter pistols and inserts prefitted, bored, and rifled barrels in the pistols so that a shot, bullet, or projectile can be discharged therefrom by an explosive, it is held that such person is a “manufacturer” of taxable firearms for the purpose of section 4181 of the Code. Therefore, his sales of the converted starter pistols are subject to the manufacturers excise tax on firearms at the rate of eleven percent.