The Bureau of Alcohol,
Tobacco and Firearms (ATF) has been asked whether a certain type of barrel
is a nontaxable part or accessory or is includible in the price for purposes
of calculating Federal excise tax liability pursuant to 26 U.S.C. 4181.
An importer of firearms
imports an over and under trap shotgun and also imports a single barrel
which is interchangeable with the double barrels of the over and under trap shotgun.
Customers may purchase the over and under trap shotgun as a complete firearm
or may purchase the over and under trap shotgun along with the single
barrel. The single barrel may also be purchased by itself.
Title 27, Code of
Federal Regulations, Section 53.61 (b) provides that no tax is imposed
by section 4181 of the Internal Revenue Code of 1986 on the sale of parts
or accessories of firearms, pistols, revolvers, shells, and
cartridges when sold separately or when sold with a complete firearm.
Thus, no tax attaches to the sale of telescopic mounts, rubber recoil pads, rifle sights, and similar parts
for firearms when sold separately, or when sold with complete firearms
for use as spare parts or accessories.
When a firearm is
sold with an extra part, such as a barrel, ATF must determine which part
is a taxable component part of the firearm and which part is a nontaxable
spare part. The most important factor in making such determinations is
whether the part under consideration was originally designed and intended
to be used with the firearm.
In the present case
the over and under trap shotgun was originally designed and intended to
be used with the over and under barrels. The single barrel is available
to customers as an option, so that they may use the shotgun as a single
barrel or double barrel shotgun for trap shooting. Since the shotgun was
not originally designed and intended as a single barrel shotgun, the single
barrel is a nontaxable spare part.
Held: The single
barrel when sold in combination with the over and under trap shotgun is
a spare part which may be excluded from the sale price when calculating
the Federal excise tax on the firearm pursuant to section 4181.
26 U.S.C. Section
4181 and 27 CFR 53.61(b): Parts and Accessories