Internal Revenue Service
Revenue Ruling

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Rev. Rul. 56-525

1956-2 C.B. 817

Full Text

Rev. Rul. 56-525

Under the provisions of section 4224 of the Internal Revenue Code of 1954,
the manufacturers excise tax does not apply to articles sold by the manufacturer
direct to any State, Territory of the United States, or any political subdivision
of the foregoing, or the District of Columbia, for its exclusive use. Held , a private,
nonprofit hospital is not, by reason of the fact that it receives a portion of its
operating funds from a state, considered to be a state agency. Accordingly, in such
a case, exemption from the manufacturers tax does not apply to taxable articles sold
to the hospital for its exclusive use.