Rev. Rul. 70-276 1970-1 C.B. 227

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Revenue Ruling 70-276

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Headnote

A device that uses compressed carbon dioxide gas for launching plastic projectiles, and the projectiles used with such device, are not subject to the tax imposed on firearms, shells and cartridges.

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ISSUE

Advice has been requested as to the applicability of the manufacturers excise tax on firearms, imposed by section 4181 of the Internal Revenue Code of 1954, to sales of the article described below.

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FACTS

A company manufactures a non-lethal device for launching a plastic projectile to strike targets up to a distance of fifty feet. The device, which resembles a revolver in appearance, uses compressed carbon dioxide gas to eject the projectile. The gas is contained in small cylinders similar to those used in making effervescent beverages. When the trigger of the device is pulled, a regulated amount of the gas is released through a valve. The gas pushes against the rear face of the plastic projectile driving it forward out of its case which is located at the valve outlet. The projectile proceeds without further propulsion to the target where, upon impact, it distributes tear gas or dye. In some models, the distribution of the tear gas or dye is accomplished by the release of a small quantity of carbon dioxide trapped in the projectile on launching. In other models, the tear gas or dye is distributed by a small detonation generated by a primer or percussion cap igniting a light charge of flash powder in a plastic tube within the projectile. The device has no firing pin, no gun barrel, no rifling, and no chamber. The materials used in the construction of the device are not of a type sufficient to contain an explosive force.

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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. For purposes of the tax imposed by section 4181 of the Code, section 48.4181-2 of the Manufacturers and Retailers Excise Tax Regulations defines the term “pistols” to mean small projectile firearms which have a short one-hand stock or butt at an angle to the line of bore and a short barrel, and which are designed, made, and intended to be aimed and fired from one hand. The term “revolvers” means small projectile firearms of the pistol type, having a breech-loading chambered cylinder so arranged that the cocking of the hammer or movement of the trigger rotates it and brings the next cartridge in line with the barrel for firing. The term “firearms” means any portable weapons from which a shot, bullet, or other projectile may be discharged by an explosive. “Shells” and “cartridges” include any combination of projectile, explosive, and container which is designed, assembled, and ready for use without further manufacture in firearms, including pistols and revolvers. Capability of discharging a projectile by means of an explosive is one of the factors to be considered in determining whether a device is a “pistol,” “revolver,” or “firearm.”

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HOLDING

Inasmuch as the device described above cannot discharge a shot, bullet, or other projectile by means of an explosive, it is held that such device is not a pistol, revolver, or other firearm within the meaning of section 4181 of the Code. Accordingly, sales of this device are not subject to the manufacturers excise tax on firearms imposed by that section. Furthermore, since the plastic projectiles used with the device are not designed, assembled, and ready for use in firearms, it is also held that they are not “shells” or “cartridges” within the meaning of section 4181 of the Code and sales thereof by the manufacturer are not subject to tax. See Revenue Ruling 70-10, page 227, which holds that sales of signal pistols, rocket signals, miniflares, and cartridges for use in such devices, are not subject to the manufacturers tax.