Rev. Rul. 58-488

Advice has been requested whether the manufacturers excise tax applies to the sale by the importer of the two motor vehicles described below. The basis for the request is that the vehicles should be considered as motorcycles which are not subject to the manufacturers excise tax.

The first vehicle has two front wheels and one rear wheel. It has a single-cylinder, air-cooled, two stroke engine which develops nine horsepower. It is driven by a roller chain drive, steered by handle bars, and is accelerated by rotating a handle bar grip. The vehicle has a `kick' starter, four speeds, three-wheel mechanical brakes, luggage compartment, two headlamps and one tail lamp. It weighs 385 pounds and attains a maximum speed of 50 miles per hour. Two persons may ride in the vehicle in tandem. The body of the vehicle consists of a lower portion of light sheet metal `wrap-around,' which provides almost shoulder-high protection for the driver and any passenger, and an upper portion of clear plastic which forms a hood over the occupants. The plastic hood is hinged on one side of the vehicle in such a manner that the hood and a portion of the metal side panel are raised to permit entrance and exit.

The second vehicle has one front and two rear wheels. It has a single-cylinder, three-speed, two-stroke engine with electric starter, and develops 5.2 horsepower. It likewise has three-wheel mechanical brakes, is driven by chain drive, and attains a maximum speed of 50 miles per hour. The vehicle has one headlamp and one tail lamp, and directional lights and it weighs 210 pounds. The streamlined body, which has no front fenders, encloses the chassis and has an open cockpit for the driver.

Section 4061(a)(2) of the Internal Revenue Code of 1954 imposes a tax on automobile chassis and bodies other than those taxable under paragraph (1), and on chassis and bodies, for trailers and semitrailers (other than house trailers) suitable for use in connection with passenger automobiles.

Although the above-described vehicles have some characteristics of motorcycles, since they have automobile-type bodies which enclose and protect the driver and any passengers and are primarily designed for the transportation of persons on the highway, it is held that they are automobiles within the meaning of section 4061(a)(2) of the Code. Accordingly, sales of the vehicles by the importer thereof are subject to the manufacturers excise tax imposed by that section.