Rev. Rul. 57-604

Advice has been requested whether the manufacturers excise tax on automobile parts and accessories imposed by section 4061 of the Internal Revenue Code of 1954 applies to the rebuilder's sale of reassembled transmissions.

It is held that transmissions which are reassembled for sale are considered rebuilt where any parts contained therein are ground or otherwise machined by the reassembler and the tax applies to the complete reassembled transmissions when sold. However, the tax does not apply to the sale of reassembled transmissions where the reassembler performs no rebuilding of the parts contained therein and all new or rebuilt replacement parts are purchased tax-paid.

Pursuant to the provisions of section 1108(b) of the Revenue Act of 1926, this ruling is limited in its retroactive application in any case, where (1) it reverses a prior ruling holding the particular article to be nontaxable, and (2) the taxpayer in reliance upon such ruling parted with possession or ownership of such article without passing the tax on to his customer. See section 12.07, Rev. Rul. 54-172, C.B. 1954-1, 394.