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Rev. Rul. 64-201 1964-2 C.B. 430

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Revenue Ruling 64-201

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Headnote

The manufacturers excise tax on firearms, imposed by section 4181 of the Internal Revenue Code of 1954, applies to the total price for which shotguns are sold, including the charge attributable to ventilated ribs and poly-chokes which are permanently attached to the shotguns.

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ISSUE

Advice has been requested whether the charges attributable to certain articles which are permanently attached to shotguns are includible in the basis upon which the manufacturers excise tax on firearms is computed.

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FACTS

A company manufactures and sells firearms, including shotguns. The company sells some of the shotguns with ventilated ribs and poly-chokes permanently attached by a method such as silver-soldering. The charge attributable to these articles is separately stated on the company’s invoices.

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LAW AND ANALYSIS

Section 4181 of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of pistols, revolvers, and other firearms at a specified percentage of the price for which each article is sold. However, the statute imposes no tax upon the sale of parts or accessories of such articles. Section 48.4181-1(a)(2) of the Manufacturers and Retailers Excise Tax Regulations provides that no tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately, or when sold with a complete firearm. Thus, no tax attaches to the sale of telescopic mounts, rubber recoil pads, rifle sights, and similar parts for firearms when sold separately, or when sold with complete firearms for use as spare parts or accessories. The tax does attach, however, to 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. When an article, such as a ventilated rib or a poly-choke, is permanently attached to a shotgun, that article becomes a component part of the complete shotgun which the company manufactures and sells.

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HOLDING

Accordingly, it is held that the manufacturers excise tax, imposed by section 4181 of the Code, applies to the total price for which the shotguns are sold, including the charge attributable to the ventilated ribs and poly-chokes.