Rev. Rul. 57-96

Advice has been requested whether the manufacturers excise tax on electric light bulbs applies to sales by the importer of miniature bulb light sets, such as Christmas tree lighting outfits.

In the instant case, a company is engaged in the business of importing miniature bulb light sets from Japan. These sets consist of insulated wire, a plug, and miniature light bulbs surrounded by little plastic cups. They are imported in decorated boxes and resold in the same boxes.

Section 4131 of the Internal Revenue Code of 1954 imposes a tax upon the sale by the manufacturer, producer, or importer of electric light bulbs. Section 4218 of the Code provides, insofar as it is applicable to imported electric light bulbs, that if any person imports an article and uses it (otherwise than in the manufacture of a taxable article), he shall be liable for manufacturers excise tax in the same manner as if such article was sold by him.

If electric light bulbs are imported and sold as loose bulbs, the tax imposed by section 4131 of the Code applies to the importer's sale of the bulbs. If the importer uses the imported bulbs in the manufacture of complete light sets, the tax imposed by section 4218 of the Code applies to his use of them. However, the Internal Revenue Service does not regard the importation of complete light sets as the importation of electric light bulbs, as such, within the meaning of section 4131 of the Code.

Accordingly, it is held that the manufacturers excise tax does not apply to the importer's sales of miniature bulb light sets under the circumstances in the instant case.