Publication 510 - Excise Taxes For 2005 - Department Of Treasury (Page 27 of 47) in pdf

truck trailers and semitrailers and remanufac-

arrive at the tax base, the price is the total

as a component part of, another article to be

tured trucks and tractors, the presumed markup

consideration paid (including trade-in allow-

manufactured or produced by that person. Do

percentage is zero.

ance) for the item and includes any charge inci-

not treat a person as engaged in the manufac-

dent to placing the article in a condition ready for

ture of any article merely because that person

Sale. For a taxable sale by a manufacturer,

use. However, see Presumptive retail sales

combines the article with any of the following

producer, importer, or related person, you gen-

price, earlier.

items.

erally figure the tax on a tax base of the sales

•

price plus an amount equal to the presumed

Exclusions from tax base. Exclude from

Coupling device (including any fifth

markup percentage times that sales price.

the tax base the retail excise tax imposed on the

wheel).

sale. Exclude any state or local retail sales tax if

•

Long-term lease. In the case of a long-term

Wrecker crane.

stated as a separate charge from the price

lease by a manufacturer, producer, importer, or

•

whether the sales tax is imposed on the seller or

Loading and unloading equipment (includ-

related person, figure the tax on a tax base of

purchaser. Also exclude the value of any used

ing any crane, hoist, winch, or power lift-

the constructive sales price plus an amount

component of the article furnished by the first

gate).

equal to the presumed markup percentage

user of the article.

•

times the constructive sales price.

Aerial ladder or tower.

Exclude charges for transportation, delivery,

•

Short-term lease. When a manufacturer,

insurance, and installation (other than installa-

Ice and snow control equipment.

producer, importer, or related person leases an

tion charges for parts and accessories, dis-

•

Earth moving, excavation, and construc-

article in a short-term lease considered a tax-

cussed earlier) and other expenses incurred in

tion equipment.

able use, figure the tax on a constructive sales

connection with the delivery of an article to a

•

price at which those or similar articles generally

purchaser. These expenses are those incurred

Spreader.

are sold in the ordinary course of trade by retail-

in delivery from the retail dealer to the customer.

•

Sleeper cab.

ers.

In the case of delivery directly from the manufac-

•

turer to the dealer’s customer, include the trans-

But if the lessor in this situation regularly

Cab shield.

portation and delivery charges to the extent the

sells articles at retail in arm’s-length transac-

•

Wood or metal floor.

charges do not exceed what it would have cost

tions, figure the tax on the lowest established

retail price in effect at the time of the taxable

to ship the article to the dealer.

Combining an article with an item in this list does

use.

Exclude amounts charged for machinery or

not give rise to taxability. However, see Parts or

equipment that does not contribute to the high-

If a person other than the manufacturer, pro-

accessories, discussed earlier.

way transportation function of the vehicle, pro-

ducer, importer, or related person leases an

vided those charges are supported by adequate

article in a short-term lease considered a tax-

Articles exempt from tax. The tax on heavy

records. For example, for an industrial vacuum

able use, figure the tax on a tax base of the price

trucks, trailers, and tractors does not apply to

loader vehicle, exclude amounts charged for the

for which the article was sold to the lessor plus

sales of the articles described in the following

vacuum pump and hose, filter system, material

the cost of parts and accessories installed by the

discussions.

separator, silencer or muffler, control cabinet,

lessor and a presumed markup percentage.

Rail trailers and rail vans. This is any

and ladder. Similarly, for a sewer cleaning vehi-

Related person. A related person is any

chassis or body of a trailer or semitrailer de-

cle, exclude amounts charged for the high pres-

member of the same controlled group as the

signed for use both as a highway vehicle and a

sure water pump, hose components, and the

manufacturer, producer, or importer. Do not

railroad car (including any parts and accessories

vacuum pipe.

treat as a related person a person that sells the

designed primarily for use on and in connection

Sales not at arm’s length. For any taxable

articles through a permanent retail establish-

with it). Do not treat a piggyback trailer or semi-

article sold (not at arm’s length) at less than the

ment in the normal course of being a retailer if

trailer as designed for use as a railroad car.

fair market price, figure the excise tax on the

that person has records to prove the article was

price for which similar articles are sold at retail in

Parts and accessories. This is any part or

sold for a price that included a markup equal to

the ordinary course of trade.

accessory sold separately from the truck or

or greater than the presumed markup percent-

trailer, except as described earlier under Parts

A sale is not at arm’s length if either of the

age.

following apply.

or accessories and Separate purchase.

General rule for sales by dealers to the con-

•

One of the parties is controlled (in law or

Trash containers.

This is any box,

sumer. For a taxable sale, other than a

in fact) by the other or there is common

container, receptacle, bin, or similar article that

long-term lease, by a person other than a manu-

control, whether or not the control is actu-

meets all the following conditions.

facturer, producer, importer, or related person,

ally exercised to influence the sales price.

•

your tax base is the retail sales price as dis-

It is designed to be used as a trash

•

cussed next under Determination of tax base.

The sale is made under special arrange-

container.

When you sell an article to the consumer,

ments between a seller and a purchaser.

•

It is not designed to carry freight other

generally you do not add a presumed markup to

than trash.

the tax base. However, you do add a markup if

Installment sales. If the first retail sale is an

•

all the following apply.

installment sale, or other form of sale in which

It is not designed to be permanently

the sales price is paid in installments, tax liability

•

mounted on or affixed to a truck chassis or

You do not perform any significant activi-

arises at the time of the sale. The tax is figured

body.

ties relating to the processing of the sale

on the entire sales price. No part of the tax is

of a taxable article.

deferred because the sales price is paid in in-

House trailers. This is any house trailer (re-

•

stallments.

The main reason for processing the sale

gardless of size) suitable for use in connection

through you is to avoid or evade the pre-

with either passenger automobiles or trucks.

Repairs and modifications. The tax does

sumed markup.

not apply to the sale or use of an article that has

Camper coaches or bodies for self-pro-

•

been repaired or modified unless the cost of the

You do not have records proving that the

pelled mobile homes. This is any article de-

repairs and modifications is more than 75% of

article was sold for a price that included a

signed to be mounted or placed on trucks, truck

the retail price of a comparable new article. This

markup equal to or greater than the pre-

chassis, or automobile chassis and to be used

includes modifications that change the transpor-

sumed markup percentage.

primarily as living quarters or camping accom-

tation function of an article or restore a wrecked

modations. Further, the tax does not apply to

In these situations, your tax base is the sales

article to a functional condition. However, this

chassis specifically designed and constructed to

price plus an amount equal to the presumed

exception generally does not apply to an article

accommodate and transport self-propelled mo-

markup percentage times that selling price.

that was not subject to the tax when it was new.

bile home bodies. If a chassis is not specifically

Determination of tax base. These rules ap-

Further manufacture. The tax does not ap-

designed and constructed to accommodate and

ply to both normal retail sales price and pre-

ply to the use by a person of a taxable article as

transport self-propelled mobile home bodies,

sumptive retail sales price computations. To

material in the manufacture or production of, or

the chassis is subject to tax unless the chassis is

Page 27

Publication 510 - Excise Taxes For 2005 - Department Of Treasury Page 27

Related Articles

Related forms

Related Categories