Benmatt Organization, Inc. v. United States

These two consolidated actions involve manufacturers’ excise taxes from November 1, 1947, through March 31, 1951, in the amount of $38,284.84, together with interest as provided by law. The sole question involved is whether license plate frames bearing an advertisement are “automobile accessories” within the meaning of § 3403(c) of the Internal Revenue Code of 1939 [now §§ 4061, 4062 and 4063 of the Internal Revenue Code 1954, 26 U.S.C.A.]

Section 3403 at the time these excise taxes became due provided as follows:

Treasury Regulation 46 (1941), § 316.55, restated in Federal Tax Regulations (1955) at page 1176, provides in part as follows:

Plaintiff without dispute is the manufacturer of three types of license plate frames. One type is for dealers advertising the dealer’s name, the second has the name of the state or city, and the third is plain.

Plaintiff only seeks a refund on the first type. It has paid excise taxes on the second and third kind.

It contends that the first type is an advertising device and therefore cannot come within the purview of an automobile accessory inasmuch as the dealer-purchaser gives the frames to his customers without charge.

The evidence in…