W-4, Employee's Withholding Exemption Certificate. See Treasury Decision 6882, C.B. 1966-1, 244. Under method b, the agency may aggregate the lump-sum payment with the regular wages paid to the employee in the same calendar year for the last preceding payroll period, determine the income tax to be withheld as if the aggregate amount were a single payment, subtract the tax already withheld from the regular wages, and withhold the remaining tax from the lump-sum payment. If the agency has not withheld income tax on the employee's regular wages (as, for example, where the employee's withholding exemptions exceeded his wages), then the agency, in withholding income tax on the lump-sum payment, must use method b, described above. In such case, the agency must aggregate the lump-sum payment with the regular wages paid the employee during the same calendar year for the last preceding payroll period and withhold income tax thereon at the regular graduated rates as if the aggregate of the lump-sum payment and the regular wages were a single payment for the regular payroll period. If, instead of giving a separate check in payment for the accumulated annual leave, the employing agency gives one check for a single payment combining both regular wages and the amount due for accumulated annual leave, the income tax to be withheld is determined under the standard wage bracket or percentage method, using the aggregate amount and the biweekly pay period as the basis for the determination. See Rev. Rul. 67-88, page 289, this Bulletin. SUBTITLE D.-MISCELLANEOUS EXCISE TAXES CHAPTER 31.-RETAILERS EXCISE TAXES SUBCHAPTER E.-SPECIAL FUELS SECTION 4041.-IMPOSITION OF TAX 26 CFR 48.4041-9: Exemption for use as sup plies for vessels or aircraft. Excise taxes on aircraft fuels and lubricants; reciprocal privileges by Iceland and the Union of Soviet Socialist Republics. See Rev. Rul. 67-193, page 306. CHAPTER 32.-MANUFACTURERS EXCISE TAXES SUBCHAPTER A.-AUTOMOTIVE AND RELATED ITEMS SECTION 4061.-IMPOSITION OF TAX 26 CFR 48. 4061(a)-1: Imposition of tax. Rev. Rul. 67-19 The manufacturers excise tax on motor vehicle articles, imposed by section 4061(a)(1) of the Internal Revenue Code of 1954, applies to that portion of the sale price of an "asphalt softener trailer" attributable to the trailer chassis. Advice has been requested concerning the applicability of the manufacturers excise tax on motor vehicle articles to sales by the manufacturer of the "asphalt softener trailer" described below. A company manufactures and sells an "asphalt softener trailer" for use in the repair and maintenance of asphalt surfaces. The article consists of a steel chassis frame mounted on a rear axle wheel assembly and a single front wheel, and an insulated "hot box," which contains liquefied petroleum gas burners, attached to the chassis frame. The article will ordinarily be towed by a truck or similar vehicle to the section of asphalt surface in need of repair. It will then be unhooked and left at the job site until the work is completed. The unit is small enough to be operated by one man who pushes it into position over the section of surface to be repaired. The "hot box" is then lowered into position, the fires lighted, and the appliance allowed to remain for several minutes. This softens the asphalt and it is then in condition to be raked and tamped down. Section 4061 (a) (1) of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of certain enumerated motor vehicle articles, including truck and bus trailer and semitrailer chassis and bodies. Section 48.4061(a)-1(e) (1) of the Manufacturers and Retailers Excise Tax Regulations provides, in part, that a trailer of semitrailer chassis or body primarily designed for highway use in combination with a taxable truck, bus, or tractor is subject to the tax imposed by Section 4061 (a) (1) of the Code. The tax attaches even though the trailer or semitrailer may have equipment to perform functions other than in connection with the transportation of property or persons. However, no tax under section 4061 (a) of the Code attaches to that part of the selling price of the complete unit which is reasonably attributable to such equipment provided such part of the selling price is billed separately on the invoice to the customer or can be otherwise established by adequate records. Revenue Ruling 62-118, C.B. 1962-2, 233, holds, in part, that certain two- and four-wheel mountings or undercarriages which are designed, constructed, and sold for use in transporting various items of equipment, such as air compressors, arc welders, and pumps are considered to be truck trailer or semitrailer chassis within the meaning of section 4061 (a) (1) of the Code. Each undercarriage is intended to provide mobility for the item of equipment which is to be bolted or otherwise attached to an identifiable chassis frame which is an integral part of the undercarriage. Similarly, the undercarriage and frame of the "asphalt softener trailer" constitutes a trailer chassis under the rationale of Revenue Ruling 62-118. Furthermore, the trailer chassis is primarily designed and constructed to transport property over the highways in combination with a taxable truck. The asphalt heating apparatus is considered to be equipment "which performs a function other than in connection with the transportation of property or persons" within the meaning of section 48.4061 (a)-1 (e) (1) of the regulations. Therefore, the manufacturers excise tax imposed by section 4061 (a) (1) of the Code applies to that portion of the sale price of the "asphalt softener trailer" attributable to the trailer chassis. No tax under section 4061 (a) of the Code attaches to that part of the selling price of the complete unit attributable to the asphalt heating apparatus provided that such part of the selling price is billed separately on the invoice to the customer or can be otherwise established by adequate records. (Also 48.4061 (b)−1.) Rev. Rul. 67-20 The manufacturers excise tax on motor vehicle articles, imposed by section 4061(a)(1) of the Internal Revenue Code of 1954, does not apply to the trailer chassis for an article referred to as a "mobile test stand" designed to be used at Air Force bases. The equipment mounted on the trailer chassis is not subject to the tax imposed on automotive parts or accessories by section 4061 (b) of the Code. Advice has been requested whether the manufacturers excise tax on motor vehicle articles applies to the sale by the manufacturer of the assembly unit described below. A company manufactures and sells articles which it refers to as "mobile test stands" primarily designed and constructed for the maintenance, testing, and servicing of gas turbine power and heating units installed in aircraft at various Air Force bases. The "mobile test stand" consists of a trailer chassis made up of a platform mounted on two pneumatic tired wheel assemblies and a tow bar. The platform is designed to accommodate the power and heating units to be tested, the field tester, fuel tanks, exhaust silencer, and other related equipment. The test stand, with equipment, including the power and heating unit to be tested, weighs approximately 1,700 pounds. It is 7134 inches wide, 24 inches high (to the mounting platform only) and 118 inches long. The trailer chassis is not designed primarily as a carrier for the field tester and power and heating unit over the highways but rather for mobility of the tester and units to be tested when removed from the aircraft for testing. The "mobile test stand" may be towed at the following maximum speeds: Paved surfaces-20 miles per hour, graded gravel roads-10 miles per hour, broken ground-5 miles per hour. Section 4061 (a) (1) of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of certain enumerated motor vehicle articles, including truck trailer and semitrailer chassis and bodies. Section 4061 (b) of the Code imposes a tax on the sale by the manufacturer, producer, or importer of parts and accessories (other than tires or inner tubes) for any of the articles enumerated in section 4061 (a)(1) of the Code, except that no tax shall be imposed upon any part or accessory which is suitable for use (and ordinarily is used) on or in connection with, or as a component part of, any article enumerated in section 4061 (a) (2) or a house trailer. Section 48.4061(a)-1(d) of the Manufacturers and Retailers Excise Tax Regulations provides that a chassis or body specified in section 4061 (a) of the Code which is not designed for highway use is not subject to the tax imposed by such section." Based upon all the factors outlined above, it is held that this trailer chassis is "not designed for highway use" within the meaning of section 48.4061(a)-1(d) of the regulations. Thus, the chassis is not a motor vehicle article under the provisions of section 4061 (a) (1) of the Code and is not subject to the manufacturers excise tax imposed by that section. Further, the testing equipment mounted on the trailer chassis is not considered to be "parts or accessories" under section 4061 (b) of the Code. Accordingly, such articles are not subject to the manufacturers excise tax imposed by that section. (Also Section 4218; 48.4218-5.) Rev. Rul. 67-56 Revenue Ruling 65-317, C.B. 1965-2, 422, holds that a resident of the United States who purchases a foreign-made automobile under conditions described therein is the importer of the vehicle for purposes of imposition of the manufacturers excise tax under sections 4061 (a) (2) and 4218(a) of the Internal Revenue Code of 1954. Revenue Ruling 66-66, C.B. 1966-1, 252, amplifies Revenue Ruling 65-317 to hold that tax in such cases is to be computed on the total cost of acquisition of the vehicle at the time of taxable use. The specific question presented herein is whether State and local use taxes and fees paid for registration or license tags under State law are acquisition costs of the type required to be included in the tax base. Held, the term "total cost of acquisition", as defined in Revenue Ruling 66-66, does not include such State and local taxes or fees required to be paid for the privilege of operating an automobile on State highways. Acquisition costs described in Revenue Ruling 66-66 are those elements of costs incurred by the importer in connection with importing and taking possession or control of a foreign-made automobile. Revenue Ruling 66-66 is hereby clarified. Rev. Rul. 67-207 A tank used in connection with a taxable trailer chassis and highway tractor to transport liquid sugar from one location to another is a trailer body and is subject to manufacturers excise tax on motor vehicles when sold by the manufacturer. Revenue Ruling 60-185, C.B. 1960-1, 412, distinguished. Advice has been requested as to whether the article described below is subject to the tax on motor vehicles imposed by section 4061 (a) (1) of the Internal Revenue Code of 1954. A company manufactures and sells a 2,400-gallon cylindrical aluminum tank that is approximately 20 feet long and 5 feet in diameter. The tank is used to transport liquid sugar over the highway to a destination where it is used for storage and as a source of supply. When the tank is empty, it is returned to the sugar manufacturer for reuse. The tank is mounted on skids to prevent rolling during transit and to afford a stable base while the tank is being used for storage. For purposes of moving the tank from one place to another, the tank is set upon a truck trailer and securely fastened to the trailer by use of hold-down ties located at each end of the tank. At the centerline of the tank there is a lifting eye which is used by an overhead crane or similar machine to place the tank on the trailer and in its storage location. Section 4061(a)(1) of the Code imposes a tax on certain articles sold by the manufacturer thereof. Among the articles enumerated in that section are truck and bus trailer and semitrailer bodies. Section 48.4061(a)-1(e)(1) of the Manufacturers and Retailers Excise Tax Regulations states that a trailer or semitrailer chassis or body primarily designed for highway use in combination with a taxable truck, bus, or tractor is subject to the tax imposed by section 4061(a)(1) of the Code. The tank in the instant case is designed for use in combination with a taxable trailer chassis and highway tractor to transport liquid sugar from one location to another. Although the tank may serve as a storage device, its utility lies in the highway transportation function it performs. Therefore, it is held that the tank is a body for a taxable trailer chassis and is subject to the tax imposed by section 4061 (a) (1) of the Code when sold by the manufacturer. The article described above is distinguishable from the article described in Revenue Ruling 60-185, C.B. 1960-1, 412. In that ruling the article, a cargo container resembling a truck trailer or semitrailer body, is designed for use and is used in connection with different modes of transportation and not primarily highway transportation. (Also Section 4218; 48.4218-1.) Rev. Rul. 67-208 An otherwise nontaxable trailer or semitrailer chassis with plates and brackets for mounting a liquid fertilizer tank thereon, becomes a taxable article within the meaning of section 4061 (a) (1) of the Internal Revenue Code of 1954. Revenue Ruling 64-107, C.B. 1964-1 (Part 1), 364, amplified. Advice has been requested whether the manufacturers excise tax on truck trailer and semitrailer chassis, imposed by section 4061 (a) (1) of the Internal Revenue Code of 1954, applies to certain trailer and semitrailer chassis. A manufacturer of a certain type of four-wheel trailer chassis and two-wheel semitrailer chassis ordinarily sells these articles to farm machinery dealers and cooperatives for farm use. As usually manufactured and sold, these chassis have been classified as farm wagon chassis and held to be not subject to tax. Section 48.4061(a)-1(e) of the Manufacturers and Retailers Excise Tax Regulations. The manufacturer receives an order from an anhydrous ammonia liquid fertilizer distributor for a similar chassis, which differs from the foregoing chassis only to the extent that welded to it is a bracket to hold a 5 |