Herren v. United States

• Decision Date: 18 August 1970
• Docket Number: Civ. A. No. 68-G-82.
• Citation: 317 F. Supp. 1198
• Parties: Henry J. HERREN, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — Southern District of Texas

317 F. Supp. 1198

Henry J. HERREN, Plaintiff, v. UNITED STATES of America, Defendant.

Civ. A. No. 68-G-82.

United States District Court, S. D. Texas, Galveston Division.

August 18, 1970.

Robert I. White, of Chamberlain & Hrdlicka, Houston, Tex., for plaintiff.

Daniel Penner, Atty., Tax Division, U. S. Dept. of Justice, Fort Worth, Tex., for defendant.

MEMORANDUM OPINION

NOEL, District Judge.

Plaintiff brought this action for refund of manufacturers excise tax assessed and paid with respect to certain articles he produced from October 1, 1965, to June 30, 1967. The Government contends that the articles are subject to the tax imposed on automobile parts and accessories by § 4061(b) (1) of the Internal Revenue Code of 1954 (hereinafter cited as "the Code" or by section number only). Plaintiff contends that the articles are not subject to such tax, or alternatively that they fall within the exemption prescribed in § 4063(a) (1).

In the nomenclature of the industry and applicable tax law the word "camper" is a generic term referring to any of several types of articles designed to be bolted to a pickup truck and used for living and sleeping accommodations in a recreational setting, as on fishing, hunting, or vacation trips. Such articles vary in size and amenity. The more elaborate contain cabins having ceilings, insulated walls and floors, and are equipped with sitting, sleeping, cooking, refrigeration, dining, toilet, and similar facilities customarily present in a residence. At the other extreme is an article consisting of one piece which simply fits on top of and encloses the bed of a pickup truck. Such an article is not customarily called a "camper" at all, but rather a truck top cover or simply a top or cover. Articles of this last kind do not contain or constitute a cabin, nor are they ordinarily equipped with the above mentioned facilities customarily present in a residence.

From 1964 to date, plaintiff Henry J. Herren has been engaged in the manufacture and sale of campers under the trade name "Heron." During the period involved here, he manufactured, advertised, and sold three basic items, a slidein cab-over unit,¹ a slide-in sleeper unit,² and a truck top cover identified in his advertising as a "Jr. Camper."³ All three items are designed to be attached to a pickup truck by four bolts and have a roof, four sides, side crank-out windows with screens, and a fixed front window. The slide-in cab-over and slide-in sleeper units have a floor, 32 square feet of floor space, a vertical door, a screened crank-out roof vent, insulation, and wood paneling. With a height of 74 inches, the slide-in cab-over unit provides 375 cubic feet of space inside and is equipped with beds and mattresses for four, 12-volt electrical connections and lighting, a stove, a refrigerator or icebox, a sink, dinette seats, a table, a cupboard, and a sideboard. The slide-in sleeper is 60 inches high and has 290 cubic feet of space, two mattresses, 12-volt interior lighting, a cabinet, and a shelf.

By contrast, plaintiff's pickup cover, which he now advertises as his Jr. Camper, has no floor except that provided by the pickup truck to which it is attached. After installation and in conjunction with the truck body sides and the truck floor, the unit provides a waterproof area of 48 square feet containing 220 cubic feet of space inside and a height from truck floor to camper ceiling of 54 inches if equipped with a vertical door, but only 200 cubic feet and a height of 48 inches if equipped with a horizontal door. During the period in suit plaintiff would build a pickup cover to a greater height for a charge of from $20 to $30 for each six inches of height.

Available to purchasers of plaintiff's pickup covers as options at extra cost are insulation, paneling, a crank-out roof vent, and 12-volt lighting. Overhead and floor cabinets, bunks, mattresses, tables, iceboxes, stoves, sinks, commodes and floors which are installed as standard equipment in the slide-in cab-over and slide-in sleeper units, may be purchased separately from plaintiff's stock and used in or with the pickup covers.

During the period October 1, 1965, to June 30, 1967, the slide-in cab-over units ranged in price from $1,095 to $2,495, the slide-in sleeper units, from $535 to $565, and the pickup covers, from $189.50 to $349.50.

On October 5, 1968, the Government assessed taxes and accrued interest in the amount of $11,882.46 with respect to plaintiff's sales of pickup covers (Jr. Campers) during the period. Only such assessments are involved in this litigation. Plaintiff paid $56.54, representing the tax assessed on the sale of four articles, filed timely claims for refund of the amounts paid, and instituted this action. Defendant thereafter counterclaimed for the unpaid portion of the assessment. The case was tried to the Court without interposition of a jury on June 3, 1969, at Galveston, Texas. Jurisdiction is present. 28 U.S.C. § 1346 (a) (1), (c).

Section 4061(a) (1) imposes a tax on the bodies and chassis of certain motor vehicles including pickup trucks. Section 4061(b) (1), the provision upon which the Government relies here, imposes a tax "upon parts or accessories * * * for any of the articles enumerated in subsection (a) (1) sold by the manufacturer. * * *" Plaintiff's first contention is that his pickup covers (Jr. Campers) are not "parts or accessories" within the meaning of such provision.

The term "parts or accessories" is not defined in the tax statute, but is the subject of a regulation sustained 40 years ago as reasonable by the Supreme Court in Universal Battery Co. v. United States, 281 U.S. 580, 50 S.Ct. 422, 74 L.Ed. 1051 (1930). In view of that decision and the regulation's long history, the definition it provides "ought not to be disturbed now unless it be plainly wrong." Id. at 583, 50 S.Ct. at 423. See also, United States v. Correll, 389 U.S. 299, 305-306, 88 S.Ct. 445, 19 L.Ed.2d 537 (1967). As phrased presently it provides in pertinent part:

Treas.Reg. § 48.4061(b)-2 Definition of parts or accessories.

(a) In general. The term "parts or accessories" includes (1) any article the primary use of which is to improve, repair, replace, or serve as a component part of an article taxable under § 4061(a) (1), (2) any article designed to be attached to or used in connection with such taxable article to add to its utility or ornamentation, and (3) any article the primary use of which is in connection with such taxable article, whether or not essential to its operation or use. * * An article shall not be deemed to be a taxable part or accessory even though it is designed to be attached to the vehicle or to be primarily used in connection therewith if the article is in effect the load being transported and the primary function of the article is to serve a purpose unrelated to the vehicle as such. * * *

* * * * * *

(d) Examples of articles taxable as parts or accessories. Examples of articles which are taxable as parts or accessories are: * * * fitted truck top covers; * * * (Emphasis supplied.)

The regulation was construed in King Trailer Co. v. United States, 228 F.Supp. 1013 (S.D.Cal.1964), aff'd 350 F.2d 947 (9th Cir. 1965),⁴ and held not to encompass a camper coach similar to plaintiff's slide-in sleepers:

Although each coach is designed to be carried on such motor vehicles it does not truly complement the vehicle's own function or ornament it. It is easily placed within the truck, but that alone does not make it an accessory thereof. Of even more import is the fact that it does not depend on the motor vehicle to perform its major function as a residence. * * * The coach's primary purpose is to provide a residence, which is at least temporary, for its owners. It performs this function equally well when it is off the pickup truck. It doesn't need the aid of any part of the vehicle to perform its function as a residence—not even the electrical system. Although it is designed to be transported in the bed of the truck, it is not primarily adapted to use on the truck. * * * In short, the coach is not a mere accessory of the truck. 228 F.Supp. at 1020.

Applying reasoning like that just quoted, plaintiff argues that his pickup covers (Jr. Campers) are not "parts or accessories" because they do not enhance the truck's cargo hauling function, but instead are the truck's cargo itself, or load. His contention is that the function of his pickup cover (Jr. Camper), like the function of the camper coach at issue in King, is to serve as a residence and thus has nothing to do with the transportation or loading function of the truck.

Plaintiff's reliance on King is misplaced. The reasoning there which led to a conclusion that the camper coaches were not "parts or accessories" points to the opposite result here. Plaintiff's pickup covers (Jr. Campers) do complement the function of the truck by providing a weatherproof, theftproof, removable cover for the truck bed and its contents. Of even more importance in King was the fact that the utility of the camper coach as a residence was not affected by its removal from the bed of the pickup truck. By contrast, the pickup cover (Jr. Camper), like the license plate frame in Benmatt Org. v. United States, 134 F.Supp. 511 (S.D.Cal. 1955), aff'd per curiam on the opinion below, 236 F.2d 959 (9th Cir. 1956), has no utility apart from the truck, whether or not the owner should elect to equip it with the optional electrical system and other accessories available from plaintiff. The pickup cover (Jr. Camper) will not function as a residence or living quarters except in conjunction with the truck.

Returning to the tests set out by the applicable regulation, it is apparent that the pickup cover (Jr. Camper) meets all of them. (1) After installation, the pickup cover (Jr. Camper) serves as a component part of the pickup truck to which it is fitted and physically attached. This is its primary use, indeed its only major...