Rev. Rul. 68-275

Because of adverse business conditions, a company that has been actively engaged in its business as a producer of gasoline, within the meaning of section 4082 of the Internal Revenue Code of 1954, temporarily discontinues its producing activities.

Held, the company does not cease to be a producer upon the temporary discontinuance of producing activities for such reasons as adverse business conditions, excess inventories, etc. Under such circumstances, where the company intends to resume the production, blending, or compounding of gasoline, it retains the status of a producer, with all the rights and liabilities accompanying such status under the provisions of section 4081 and 4083 of the Code.

On the other hand, if the company were to dispose of its producing equipment for the purpose of abandoning all producing operations in the future, it would no longer have the status of a producer for purposes of the provisions of sections 4081 and 4083 of the Code. However, after permanently abandoning its producing operations, the company would still be regarded as the producer of gasoline sold by it that was produced, compounded, blended, or purchased tax-free by it during the period in which it was actively producing, compounding, or blending gasoline.

This Revenue Ruling restates under current law the position set forth in S.T. 686, C.B. XII-1, 413 (1933). Therefore, S.T. 686 is hereby superseded.

¹ Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.