
    WALKER MANUFACTURING CO. v. THE UNITED STATES
    [No. E-488.
    Decided April 16, 1928]
    
      Owthe Proofs
    
    
      Excise tax; sec. 900, revenue acts of 1918 and 1921; accessories for automobiles; lifting jacios. — lifting jacks designed, manufactured, and sold for special use with automobiles, are accessories for automobiles and as such subject to the excise tax imposed by section 900 of the revenue acts of 1918 and 1921.
    
      
      The Reporter’s statement of the case:
    
      Mr. Marvin Farrington for the plaintiff. Mr. George R. Jackson was on the brief.
    
      Mr. Ralph G. Williamson, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.
    The court made special findings of fact, as follows:
    I. The plaintiff is a manufacturing corporation duly incorporated pursuant to the laws of the State of Wisconsin, with its' principal office in Racine, in said State, and since 1910 a large part of its business has been the manufacture and sale of lifting jacks of various sizes and types.
    II. By monthly payments beginning March, 1919, and ending with a payment in September, 1923, the plaintiff on the demand of the collector of internal revenue paid the United States the manufacturer’s excise taxes in the sum of $101,-929.56 under section 900 (3) of the revenue acts of 1918 and 1921, on the sale of lifting jacks manufactured by the plaintiff, excepting only certain jacks haying a wheel base, which the collector classified as garage equipment.
    III. Prior to the year of 1910, the principal business of the plaintiff company had been the manufacture and sale of bolster springs for farm wagons. As the automobile and .truck industry were developed and wagons were being replaced by trucks, and. buggies were being replaced by automobiles, the plaintiff company found that there was a lesser demand for its products and began seeking other lines for manufacturing, upon which its business could be increased. In 1910 or 1911, when the tire industry was in its infancy, the plaintiff began the manufacture of a tire-saving jack for use in connection with automobiles and the purpose of which was to take the pressure off of the tires by raising the automobile from the ground when the automobile was standing in the garage. The plaintiff found a very ready market for that device and also found that there was a demand for lifting jacks of different .types in connection with automobiles, and since that time its business has almost exclusively been the development and manufacture of lifting jacks for automobiles.
    IY. The lifting jacks of the type involved in this case are mechanical devices for the lifting of weights through the utilization of the lever principle. Each jack is a complete unit including a handle and axle and a lifting surface inclosed in a suitable container or base. The mechanical principles utilized in plaintiff’s jacks have been known for many years and are described in a number of patents, some dating as far back as 77 years, all of which patents have expired. The jacks are a development of the old type of wagon jack. Automobiles and trucks are of such weight and construction as to require the use of a lifting jack or an equivalent' device whenever it is necessary to raise any parts thereof from the ground. The particular types of lifting jacks manufactured and sold by the plaintiff, and upon the sale of which the excise tax involved in this case was levied, were designed, manufactured, and sold for use with automobiles. The jacks were constructed with such a distance between the base and the lifting head as ordinarily exists between the ground and an axle of an automobile. The lifting head was constructed to be conveniently applied to the axle of an automobile and to prevent the same from slipping from its position. The handles were of such length and so placed as' to permit application of the power by the operator clear of the car. With the development of automobiles with less road clearance, plaintiff changed the design of its lifting jacks to meet the new requirements. The plaintiff is now manufacturing lifting jacks with a capacity ranging from 1 ton to 7% tons, and although the jacks could be used and are used to some extent other than in conjunction with automobiles and trucks, it clearly appears that the plaintiff’s lifting jacks which are the subject of this suit were particularly designed for automobile and truck use. An examination of several of the plaintiff’s catalogs which were introduced by the plaintiff in evidence in this case disclosed the fact that, with possibly one or two exceptions, each jack described or illustrated in these several catalogues is particularly designed as an automobile jack or is described as a jack particularly fitted for use in connection with certain types of automobiles or trucks.
    
      Y. The purposes for which the jacks here in question can be used in connection with an automobile are exclusively in the repair of said automobile and they could not be used in any manner in connection with the operation of the automobile or truck. The lifting jacks manufactured by the plaintiff ranged in size from the small jack which could be conveniently carried in the automobile for emergency use to the large type of roll-a-car which could only be used in a garage. The lifting jacks manufactured by the plaintiff were sold by the plaintiff to manufacturers of automobiles and. trucks who include jacks as a part of their standard equipment and to jobbers of automotive equipment and to heavy hardware jobbers who also handle automobile equipment, so.that the business of the plaintiff is divided into two classes, one class being its equipment business and one class being its jobbing business. It is the endeavor of the plaintiff to keep that business divided as equally as possible.
    YI. On October 9, 1923, the plaintiff filed a claim for refund of the taxes involved in this suit, totaling $101,929.56, with the collector of internal revenue for Milwaukee and on November 12, 1924, the Commissioner of Internal Revenue disallowed the claim in to to. No part of the total sum of $101,929.56 paid to the United States for these taxes has been repaid to the plaintiff.
    The court decided that plaintiff was not entitled to recover.
   Moss, Judge,

delivered the opinion of the court:

This is an action to recover an excise tax amounting to $101,929.56 paid by plaintiff on an article known as “ lifting-jacks,” which plaintiff claims was illegally collected under the provisions of section 900 of the revenue act of 1918, 40 Stat. 1057, 1122, and section 900 of the act of 1921, 42 Stat. 227, 291. In each act it is provided that a tax shall be levied and collected upon the following articles:

“(1) Automobile trucks and automobile wagons (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), 3 per centum.
“ (2) Other automobiles and motor cycles (including tires, inner tubes, parts, and accessories therefor, sold on or in connection therewith or with the sale thereof), except tractors, .5 per centum.
“(3) Tires, inner tubes, parts, or accessories for any of the articles enumerated in subdivision (1) or (2), sold to any person other than a manufacturer or producer of any of the articles enumerated in subdivision (1) or (2), 5 per centum.”

The sole question to be determined is whether or not the lifting jacks described in the record constitute a part or accessory of an automobile. The particular type of lifting jacks upon sale of which the excise tax was levied and collected was designed, manufactured, and sold for use with automobiles. The jacks were advertised in plaintiff’s catalogs as automobile jacks. Only this class of jacks, so designated, has been subjected to the payment of the tax. No tax has been required on certain other types manufactured and sold by plaintiff. In Article 16 of the Treasury Regulations 47, “ accessory ” is defined as follows:

“An accessory ’ for an automobile truck, automobile wagon, other automobile, or motor cycle is any article designed to be attached to or used in connection with such vehicle to add to its utility or ornamentation and which is primarily adapted for use in connection with such vehicle, whether or not essential to its operation.
“ The term accessories ’ includes, for example, automobile tops, back and side curtains, horns, speedometers, self-starters, spot lights, shock absorbers, tire pumps, pressure gauges, and hydrometers.
“Articles which have a general commercial use and which are not especially designed and peculiarly adapted for use .in connection with automobile trucks, automobile wagons, other automobiles, or motor cycles, are not subject to tax as ‘ parts ’ or ‘ accessories.’ Thus a wrench or other tool of a kind ordinarily sold in hardware stores for general purposes is not subject to tax when sold separately, but if incorporated in an automobile tool kit, designed, intended, advertised, or held out for use on an automobile as distinguished from garage or shop equipment, is taxable as part of the complete kit.
“A wrench or other tool of special design or construction primarily adapted for use in connection with automobiles is taxable.
“ If any doubt exists as to the special adaptability of any article, the fact of its sale by the manufacturer to be used with an automobile, or to an automobile accessories dealer, would determine ,its taxability.”

Plaintiff’s contention is that under the interpretation of the statute, as expressed in the regulations, its product is exempt from the tax. It is urged, for instance, that inasmuch as lifting jacks can not be used in the ofetation of an automobile, that they do not add to the utility or ornamentation of the automobile, that they are not designed to be attached to or used in connection with automobiles, they should be exempt from the tax. The argument is unconvincing and unsound. The almost universal use for the article involved herein is demonstrated by the fact that lifting jacks constitute a part of the automobile equipment of a vast majority of automobile owners. A large part of plaintiff’s business as a manufacturer is in the production and sale of lifting jacks of this type. During the period from February, 1919, to August, 1923, plaintiff’s sales on this product, manufactured, advertised, and sold for use in connection with automobiles, amounted to $2,037,214.43. In varying forms, questions of this character, involving the construction of section 900, have been before thjs court. In the recent case of Cole Storage Battery Company, No. D-784, decided April 2, 1928, ante, p. 164, this court said in an opinion by Judge Booth: “ We think, therefore, that where a manufacturer of storage batteries seeks the custom of the automobile trade, assures the latter of the especial qualities of his battery, and designs it as part of the automobile into which ,it is to be introduced, Congress intended by the taxing act to reach it as a source of revenue.”

It is the opinion of the court that the tax in this case was properly collected. Plaintiff is not entitled to recover and its petition should be dismissed, and it is so ordered.

Graham, Judge; Booth, Judge; and Campbell, Chief Justice, concur.

Green, Judge, took no part in the decision of this case.-  