Rev. Rul. 69-579

The Internal Revenue Service has reconsidered the position set forth in Revenue Ruling 66-315, C.B. 1966-2, 463, with respect to whether certain bulk feed bodies are subject to the manufacturers excise tax imposed on sales of automotive articles by section 4061(a)(1) of the Internal Revenue Code of 1954.

The articles involved are truck, trailer, or semitrailer bodies used primarily for hauling animal and poultry feed to farms and unloading such products into bins and troughs on the farms. The bodies contain heavy-duty mechanical or pneumatic type unloading equipment specially designed to facilitate unloading on the farm. The unloading equipment is built into, and forms an integral part of, the bodies, adding substantially to their cost and weight, and limiting their load-carrying capacity. The mechanical system employs conveyors or augers, and unloads from the top of the body; the pneumatic system employs a blower and hose, and usually unloads from the bottom and rear of the body. Each system is activated by a power take-off from the truck engine. The bodies are usually divided into separate compartments and are either open at the top or completely enclosed. The enclosed type body is equipped with sliding doors on top to permit easy loading at grain elevators.

Section 4061(a)(1) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of certain enumerated articles including automobile truck bodies and truck trailer and semitrailer bodies.

Section 4063(a)(2)(B) of the Code provides that the tax imposed by section 4061 shall not apply in the case of any body, part, or accessory primarily designed to haul feed, seed, or fertilizer to and on farms.

In the case of Highway Equipment Co. v. United States, the United States District Court for the Northern District of Iowa, entered January 18, 1968, the court held that certain automobile bodies, substantially similar to those described above, were primarily designed to haul feed to and on farms within the meaning of section 4063(a)(2)(B) of the Code, and consequently were exempt from the tax imposed by section 4061(a)(1). A similar conclusion was reached in the case of B. M. Clark Co., Inc. v. United States, United States District Court, District of Maine, Southern Division, entered July 31, 1969.

Upon reconsideration of Revenue Ruling 66-315, the Service has concluded that the automotive bodies involved are not designed primarily for the general hauling of feed, seed, or fertilizer over the highway. The elaborate and expensive unloading systems built into these bodies, and the modifications of the bodies required to accommodate the unloading systems, make it impractical to purchase the bodies for use other than in hauling feed, seed, or fertilizer to, and unloading it on, farms.

Accordingly, it is held that the described automotive bodies are primarily designed to haul feed, seed, or fertilizer to and on farms, within the meaning of section 4063(a)(2)(B) of the Code, and are therefore exempt from the tax imposed by section 4061(a)(1).

Revenue Ruling 66-315 is hereby revoked.