Rev. Rul. 57-111

Advice has been requested whether the manufacturers excise tax on musical instruments is applicable to mouthpieces, reeds, ligatures, mouth piece caps, neck cords, mutes, and lyres for holding music, when sold by the manufacturer on or in connection with saxophones and other wind instruments.

Section 4151 of the Internal Revenue Code of 1954 provides that a tax shall be imposed upon the sale of musical instruments by the manufacturer, producer, or importer. No tax is imposed by this section upon parts or accessories sold on or in connection with the sale of musical instruments.

It is held that the term `musical instruments' as used in the statute includes all component elements of musical instruments essential to their operation. For example, in the case of a saxophone, one mouthpiece, one reed, and one ligature are essential to the operation of the instrument. Therefore, the tax applies to the complete instrument including such components when they are sold on or in connection with the instrument. On the other hand, the tax does not apply to the sale by the manufacturer of any extra or spare mouthpieces, reeds, or ligatures, whether sold separately or in connection with the sale of a complete musical instrument.

It is further held that mouthpiece caps, neck cords, mutes, and lyres for holding music are accessories for musical instruments rather than component elements essential to their operation and, therefore, are not subject to tax whether sold separately or on or in connection with the sale of musical instruments.

The Internal Revenue Service has previously held that the sale of a mouthpiece, reed, or ligature, with a musical instrument was not subject to tax. That position has received publicity in the industry involved and has been relied upon as a basis for not paying the tax on such components. Therefore, under the authority of section 7805(b) of the Code, this ruling, to the extent that it holds taxable the sale of components under the circumstances stated, will not be applied to sales made prior to May 1, 1957.