It is recognized that for estate tax purposes, the entire amount of the $80,000 would be allowable as a deduction from the decedent's gross estate, whereas, for income tax purposes, only $70,000 is deductible. To hold that the filing of the statement of waiver under section 642 (g) of the Code constitutes a relinquishment of the right to deduct, for estate tax purposes, the balance of $10,000 in administration expenses would not give proper effect to the intent of Congress in enacting the statute. Section 642 (g) of the Code is primarily concerned with the prohibition of double deductions, i. e., disallowing the same deduction for the estate tax return and the income tax return. As was stated in Revenue Ruling 240, C. B. 1953-2, 79,

In the event that administrative expenses are such that they would be allowable for either income or estate tax purposes, the taxpayer may allocate the expenses to either the estate tax return or the income tax return for the year in which payment is made, or to both in such proportions as he desires, provided there is no duplication of deduction and provided the terms of section 162 (e) of the Code [section 642 (g) of the 1954 Code] are complied with.

The facts herein are different from the factual situations on which Revenue Ruling 240 is based, but the rationale of the ruling is considered in point. It is held, therefore, that the $10,000 of disbursements not allowable as a deduction for income tax purposes are deductible from the gross estate under section 2053 of the Code.

SECTION 4041.-IMPOSITION OF TAX

[SPECIAL FUELS]

Rev. Rul. 59-33

The retailers excise tax imposed by section 4041 (a) of the Internal Revenue Code of 1954 does not apply to diesel fuel sold for use or used as fuel in certain logging vehicles which are not generally used on the highway but, by certain modifications, may qualify for a special permit for emergency highway use.

Advice has been requested concerning the applicability of the retailers excise tax on diesel fuel to sales for use or use of such fuel in certain types of logging vehicles.

Certain diesel-powered logging vehicles are operated on private roads within the confines of company-owned timber lands. These vehicles are not registered for use on highways because their width is in excess of that prescribed for highway use by the laws of the state in which they are operated. However, by certain modifications, the width of the vehicle may be changed to such an extent that they qualify for a special permit for highway use which is authorized by the state. On several occasions some of the vehicles have been temporarily converted for emergency use on the highway, under the special permit provisions. However, it is not economically feasible to continuously operate them on the highway, as the unloaded vehicles are close to state weight limitations, leaving very little load-carrying capacity.

Section 4041 (a) of the Internal Revenue Code of 1954 imposes a tax upon diesel fuel (1) sold by any person to an owner, lessee, or other operator of a diesel-powered highway vehicle, for use as a fuel

in such vehicle; or (2) used by any person as a fuel in a dieselpowered highway vehicle unless there was a taxable sale of such liquid under paragraph (1). Section 324.10 (c) of Regulations 119, made applicable to the 1954 Code by Treasury Decision 6091, C. B. 1954-2, 47, provides that the term "diesel-powered highway vehicle" has reference to the type of vehicle and not to the use which is made of the vehicle. The term includes any vehicle powered or propelled by a diesel motor or engine and of the type which is capable of general use upon public highways, such as automobile trucks, busses, highway tractors, etc. The term does not, however, include equipment designed primarily for off-highway use, such as road graders, bulldozers, power shovels, earth movers, farm tractors, etc.

The logging vehicles, in the instant case, are of the type primarily designed and adapted for purposes predominantly other than general use upon public highways. Consequently, the logging vehicles are not considered to be diesel-powered highway vehicles within the meaning of section 4041 (a) of the Code. Therefore, it is held that the retailers excise tax imposed by that section does not apply to diesel fuel sold for use or used as a fuel in such vehicles.

SECTION 4061.-IMPOSITION OF TAX [MOTOR VEHICLES] Rev. Rul. 59-34

A single unit battery meter sold for use on automobiles, trucks, tractors, boats, and industrial engines, etc., constitutes an automobile part or accessory within the meaning of section 4061 (b) of the Internal Revenue Code of 1954 and is subject to the manufacturers excise tax upon its sale by the manufacturer, producer, or importer thereof.

Advice has been requested whether the battery meter described below is subject to the manufacturers excise tax on automobile parts or accessories.

A company manufactures and sells a single unit battery meter for installation on automobiles, trucks, tractors, boats, and industrial engines, or wherever a 12-volt battery is used in a charging or starting electrical system. Each meter is equipped with a calibrated dial and an indicating pointer which shows the amount of voltage applied to an electrical system under various operating conditions. If the pointer moves outside the range on the dial designated for a particular operating condition, this indicates the improper functioning of the system and the need for inspection of the battery and the charging system.

Section 4061 (a) of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of certain motor vehicle articles, including automobile and truck chassis and bodies. Section 4061 (b) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of parts of accessories (other than tires and tubes and other than automobile radio and television receiving sets) for any of the articles enumerated in section 4061 (a).

Section 316.55 of Regulations 46, made applicable to the 1954 Code by Treasury Decision 6091, C. B. 1954-2, 47, defines the term "parts or accessories" for an automobile truck or other automobile chassis or body, as including any article the primary use of which is in connection with such vehicle or article whether or not essential to its operation or use.

It is held that the single unit battery meter described above is an automobile part or accessory within the meaning of section 4061 (b) of the Code and is subject to the manufacturers excise tax imposed by that section upon its sale by the manufacturer.

SECTION 4071.-IMPOSITION OF TAX
[TIRES AND TUBES]

26 CFR 40.4071: Statutory provisions; impo

sition of tax; imposition and rate of tax.

T. D. 63431

TITLE 26-INTERNAL REVENUE, 1954.-CHAPTER I, SUBCHAPTER D, PART 40.MANUFACTURERS AND RETAILERS EXCISE TAXES

Regulations under sections 4071 to 4073, inclusive, of the Internal Revenue Code of 1954, as amended, relating to the tax on the sale of tires, inner tubes, and tread rubber.

DEPARTMENT OF THE TREASURY,

OFFICE OF COMMISSIONER OF INTERNAL REVENUE,

Washington 25, D. C. To Officers and Employes of the Internal Revenue Service and Others Concerned:

On October 18, 1958, notice of proposed rulemaking regarding the regulations under sections 4071 to 4073, inclusive, of the Internal Revenue Code of 1954, as amended, relating to the excise taxes imposed on the sale of tires, inner tubes, and tread rubber was published in the Federal Register (23 F. R. 8061). No objection to the rules proposed having been received during the 30-day period prescribed in the notice, the regulations as so published are hereby adopted.

The Manufacturers and Retailers Excise Tax Regulations (26 CFR Part 40) set forth in paragraph 2 below are hereby prescribed under part II of subchapter A of chapter 32 of the Internal Revenue Code of 1954, as amended, relating to manufacturers excise tax on tires, inner tubes, and tread rubber.

PARAGRAPH 1. Section 40.0-3 of the Manufacturers and Retailers Excise Tax Regulations (26 CFR Part 40) is hereby amended by striking paragraph (g) and inserting in lieu thereof the following: (g) Subpart H.-The regulations in Subpart H of this part, unless otherwise specified in such subpart, relate to:

(1) Motor vehicles.-[Reserved].

(2) Tires, tubes, and tread rubber.-Sales made by the manufacturer, producer, or importer on or after July 1, 1956, of tires, tubes, and tread rubber.

(3) Gasoline.-[Reserved].

(4) Lubricating oil.-[Reserved].

123 F.R. 10181.

PAR. 2. The following regulations are prescribed under part II of subchapter A of chapter 32 of the Internal Revenue Code of 1954, as amended, relating to tires, tubes, and tread rubber:

TABLE OF CONTENTS

SUBPART H-MOTOR VEHICLES, TIRES, TUBES, TREAD RUBBER, GASOLINE, AND LUBRICATING OIL

Section

40.4071

TIRES, TUBES, AND TREAD RUBBER

Statutory provisions; imposition of tax; imposition and rate of tax. 40.4071-1 Imposition and rates of tax.

40.4071-2 Determination of weight.

40.4072

40.4072-1 40.4073

40.4073-1

Statutory provisions; definitions; rubber; tread rubber; tires of the type used on highway vehicles.

Definitions.

Statutory provisions; exemptions.

Exemption of tires of certain sizes.

40.4073-2 Exemption of tires with internal wire fastening.

40.4073-3 Exemption of tread rubber used for nonhighway tires.

40.4073-4 Other tax-free sales.

AUTHORITY: §§ 40.4071 to 40.4073-4, incl., issued under sec. 7805, I. R. C. 1954; 68A Stat. 917; 26 U.S.C. 7805.

TIRES, TUBES, AND TREAD RUBBBER

$40.4071 STATUTORY PROVISIONS; IMPOSITION OF TAX.

SEC. 4071. IMPOSITION OF TAX.

(a) IMPOSITION AND RATE OF TAX.-There is hereby imposed upon the following articles, if wholly or in part of rubber, sold by the manufacturer, producer, or importer, a tax at the following rates:

(1) Tires of the type used on highway vehicles, 8 cents a pound. (2) Other tires, 5 cents a pound.

(3) Inner tubes for tires, 9 cents a pound.

(4) Tread rubber, 3 cents a pound.

(b) DETERMINATION OF WEIGHT.-For purposes of this section, weight shall be based on total weight, except that in the case of tires such total weight shall be exclusive of metal rims or rim bases. Total weight of the articles shall be determined under regulations prescribed by the Secretary or his delegate.

(c) RATE REDUCTION.-On and after July 1, 1972

(1) The tax imposed by paragraph (1) of subsection (a) shall be 5 cents a pound; and

(2) Paragraph (4) of subsection (a) shall not apply.

[Sec. 4071 as amended by sec. 204 (a), Highway Revenue Act 1956 (70 Stat. 388) P. L. 627, C. B. 1956-2, 1150]

§ 40.4071-1 IMPOSITION AND RATES OF TAX-(a)

Imposition of tax.-Section 4071 imposes a tax upon the following articles sold by the manufacturer, producer, or importer thereof:

(1) Tires made wholly or in part of rubber,

(2) Inner tubes (for tires) made wholly or in part of rubber,

and

(3) Tread rubber.

For definitions of the terms "tires", "inner tubes", "tread rubber", and "rubber", see § 40.4072-1.

(b) Rates and computation of tax-(1) Rates of tax.-Tax is imposed upon each of the above mentioned taxable articles at the rate applicable on the date on which the article is sold, as specified below:

For definition of the term "tires of the type used on highway vehicles", see paragraph (c) of § 40.4072–1.

(2) Computation of tax.-The tax on tires, inner tubes, and tread rubber is computed by applying to the total weight (including a fractional part of a pound) of the article the rate in effect at the time the article is sold. See § 40.4071-2, relating to determination of weight.

(c) Liability for tax.-The tax imposed by section 4071 is payable by the manufacturer, producer, or importer making the sale.

$40.4071-2 DETERMINATION OF WEIGHT-(a) In general-(1) Tires.-(i) The metal rims or rim bases are not to be included in determining the total weight of a tire. However, the wire, staples, darts, clips, and other material or fastening devices which form a part of the tire or are required for its use must be included in determining the total weight of the tire. In the case of a tubeless tire, the total weight includes the weight of the air valve and stem or any other mechanism which may be used for inflating the tire or maintaining air pressure when sold by the tire manufacturer with the tubeless

tire.

(ii) When tires are sold with metal rims or rim bases attached, the manufacturer must maintain records which will establish what portion of the total weight of the finished product represents the tire exclusive of the metal rim or rim base.

(2) Inner tubes.-The total weight of an inner tube shall include the weight of the air valve and stem or any other mechanism attached to the inner tube which may be used for inflating the tube or maintaining air pressure.

(b) Alternative method of determining weight of tires and inner tubes.-(1) A manufacturer who has received permission from the Commissioner may, subject to such conditions as the Commissioner