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Rev. Rul. 62-169 1962-2 C.B. 245

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Revenue Ruling 62-169

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Headnote

For purposes of the manufacturers excise tax imposed by section 4181 of the Internal Revenue Code of 1954, kits' which contain all of the necessary component parts for the assembly of shotguns are complete firearms in knockdown condition even though, in assembling the shotguns the purchaser must final-shape,’ sand, and finish the fore-arm and the stock. Accordingly, the manufacturers excise tax applies to these `kits’ when sold by the manufacturer, producer, or importer.

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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 the shotgun `kits’ described below when sold by the manufacturer, producer, or importer.

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FACTS

Each kit contains all of the necessary component parts for the assembly of a shotgun. An action, barrel, fore-arm, stock, butt plate, and other fittings are included in each kit. The fore-arm and the stock, which are the wood components of the gun, are cut to the proper length and shape. However, in assembling the shotgun, it is necessary for the purchaser to `final-shape,’ sand, and finish the fore-arm and the stock.

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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, other firearms, shells, and cartridges. Section 48.4181-1(a)(2) of the Manufacturers and Retailers Excise Tax Regulations provides that the tax imposed by section 4181 of the Code attaches to the sales of complete firearms, pistols, revolvers, shells, and cartridges, or to sales of such articles which, although in a knockdown condition, are complete as to all component parts. The kits which are described above are complete as to all component parts. The fact that the person who assembles the components must `final-shape,’ sand, and finish the wood components is not material in determining the taxability of the kit.

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HOLDING

Accordingly, it is held that the manufacturers excise tax imposed by section 4181 of the Code applies to the kits described in the instant case when they are sold by the manufacturer, producer, or importer.