Rev. Rul. 60-212

Advice has been requested whether sales by the manufacturer of the motor vehicle described below are subject to the manufacturers excise tax imposed by section 4061(a)(2) of the Internal Revenue Code of 1954. This request was made in view of the fact that it is impractical to drive such a vehicle on freeways or main highways where the traffic is heavy.

A manufacturer produces and sells a four-wheel electrically powered motor vehicle designed for use in the transportation of persons on public streets where the traffic is relatively light. It is approximately nine feet long and three and one-half feet wide and is equipped with a closed body which is designed to accommodate two people. The total weight of the vehicle is about 800 pounds. The vehicle can attain a maximum speed of approximately 30 miles per hour. Because the batteries must be recharged after a certain amount of mileage is driven, the vehicle has a limited driving range.

Section 4061(a)(2) of the Code imposes a tax upon the sale by the manufacturer, producer, or importer of automobile chassis and bodies other than those taxable under section 4061(a)(1) of the Code. A sale of an automobile, for purposes of this paragraph of the Code, is considered to be a sale of the chassis and of the body.

Under the provisions of section 40.4061(a)-1(d) of the Manufacturers and Retailers Excise Tax Regulations, relating to `nonhighway vehicles,' a chassis or body specified in section 4061(a) of the Code which is not designed for highway use is not subject to the tax imposed by such section. The following are examples of vehicles which are not designed for highway use, and, therefore, not taxable: road graders, bulldozers, power shovels, earth movers, etc.

For purposes of the manufacturers excise tax, it is immaterial that an automobile is propelled by a self-contained electric power source rather than by an internal combustion engine.

Furthermore, the fact that it is impractical to use the subject vehicle on freeways or main highways does not characterize it as a `nonhighway vehicle' for purposes of the manufacturers excise tax under the provisions of the regulations.

Accordingly, it is held that the above-described electric motor vehicle is an automobile within the meaning of section 4061(a)(2) of the Code. Therefore, sales of such vehicles by the manufacturer thereof are subject to the manufacturers excise tax imposed by that section of the Code.