Rev. Rul. 62-103

Sterling silver shoe buckles are subject to the retailers excise tax imposed by section 4001 of the Internal Revenue Code of 1954 upon articles made of precious metals. Where they are sold in combination with nontaxable shoes, the tax applies to that portion of the total retail sale price which is allocable to the taxable buckles. This allocation may be made in accordance with the principles set forth in Revenue Ruling 58-551, C.B. 1958-2, 747.

Pursuant to the ruling cited above, the basis for tax is determined by applying to the retail sale price of the combination, the ratio which the separate retail sale prices of the taxable articles bear to the sum of the separate retail sale prices of both the taxable and nontaxable articles when sold separately at retail. However, in case certain taxable and nontaxable articles in a combination are not sold separately at retail and to not have established retail sale prices, the taxable portion may be determined by applying to the retail sale price of the combination, the ratio that the costs of the taxable articles bear to the total costs of the taxable and nontaxable articles. Where the retailer does not have such cost-ratio information, he may obtain it from the person who assembles the combination.