Internal Revenue Code:Sec. 4052. Definitions and special rules
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 31 - RETAIL EXCISE TAXES
Subchapter C - Heavy Trucks and Trailers
Statute
Sec. 4052. Definitions and special rules
(a) First retail sale
For purposes of this subchapter -
(1) In general
The term ''first retail sale'' means the first sale, for a
purpose other than for resale or leasing in a long-term lease,
after production, manufacture, or importation.
(2) Leases considered as sales
Rules similar to the rules of section 4217 shall apply.
(3) Use treated as sale
(A) In general
If any person uses an article taxable under section 4051
before the first retail sale of such article, then such person
shall be liable for tax under section 4051 in the same manner
as if such article were sold at retail by him.
(B) Exemption for use in further manufacture
Subparagraph (A) shall not apply to use of an article as
material in the manufacture or production of, or as a component
part of, another article to be manufactured or produced by him.
(C) Computation of tax
In the case of any person made liable for tax by subparagraph
(A), the tax shall be computed on the price at which similar
articles are sold at retail in the ordinary course of trade, as
determined by the Secretary.
(b) Determination of price
(1) In general
In determining price for purposes of this subchapter -
(A) there shall be included any charge incident to placing
the article in condition ready for use,
(B) there shall be excluded -
(i) the amount of the tax imposed by this subchapter,
(ii) if stated as a separate charge, the amount of any
retail sales tax imposed by any State or political
subdivision thereof or the District of Columbia, whether the
liability for such tax is imposed on the vendor or vendee,
and
(iii) the value of any component of such article if -
(I) such component is furnished by the first user of such
article, and
(II) such component has been used before such furnishing,
and
(C) the price shall be determined without regard to any
trade-in.
(2) Sales not at arm's length
In the case of any article sold (otherwise than through an
arm's-length transaction) at less than the fair market price, the
tax under this subchapter shall be computed on the price for
which similar articles are sold at retail in the ordinary course
of trade, as determined by the Secretary.
(3) Long-term lease
(A) In general
In the case of any long-term lease of an article which is
treated as the first retail sale of such article, the tax under
this subchapter shall be computed on a price equal to -
(i) the sum of -
(I) the price (determined under this subchapter but
without regard to paragraph (4)) at which such article was
sold to the lessor, and
(II) the cost of any parts and accessories installed by
the lessor on such article before the first use by the
lessee or leased in connection with such long-term lease,
plus
(ii) an amount equal to the presumed markup percentage of
the sum described in clause (i).
(B) Presumed markup percentage
For purposes of subparagraph (A), the term ''presumed markup
percentage'' means the average markup percentage of retailers
of articles of the type involved, as determined by the
Secretary.
(C) Exceptions under regulations
To the extent provided in regulations prescribed by the
Secretary, subparagraph (A) shall not apply to specified types
of leases where its application is not necessary to carry out
the purposes of this subsection.
(4) Special rule where tax paid by manufacturer, producer, or
importer
(A) In general
In any case where the manufacturer, producer, or importer of
any article (or a related person) is liable for tax imposed by
this subchapter with respect to such article, the tax under
this subchapter shall be computed on a price equal to the sum
of -
(i) the price which would (but for this paragraph) be
determined under this subchapter, plus
(ii) the product of the price referred to in clause (i) and
the presumed markup percentage determined under paragraph
(3)(B).
(B) Related person
For purposes of this paragraph -
(i) In general
Except as provided in clause (ii), the term ''related
person'' means any person who is a member of the same
controlled group (within the meaning of section 5061(e)(3))
as the manufacturer, producer, or importer.
(ii) Exception for retail establishment
To the extent provided in regulations prescribed by the
Secretary, a person shall not be treated as a related person
with respect to the sale of any article if such article is
sold through a permanent retail establishment in the normal
course of the trade or business of being a retailer.
(c) Certain combinations not treated as manufacture
(1) In general
For purposes of this subchapter (other than subsection
(a)(3)(B)), a person shall not be treated as engaged in the
manufacture of any article by reason of merely combining such
article with any item listed in paragraph (2).
(2) Items
The items listed in this paragraph are any coupling device
(including any fifth wheel), wrecker crane, loading and unloading
equipment (including any crane, hoist, winch, or power liftgate),
aerial ladder or tower, snow and ice control equipment,
earthmoving, excavation and construction equipment, spreader,
sleeper cab, cab shield, or wood or metal floor.
(d) Certain other rules made applicable
Under regulations prescribed by the Secretary, rules similar to
the rules of subsections (c) and (d) of section 4216 (relating to
partial payments) shall apply for purposes of this subchapter.
(e) Long-term lease
For purposes of this section, the term ''long-term lease'' means
any lease with a term of 1 year or more. In determining a lease
term for purposes of the preceding sentence, the rules of section
168(i)(3)(A) shall apply.
(f) Certain repairs and modifications not treated as manufacture
(1) In general
An article described in section 4051(a)(1) shall not be treated
as manufactured or produced solely by reason of repairs or
modifications to the article (including any modification which
changes the transportation function of the article or restores a
wrecked article to a functional condition) if the cost of such
repairs and modifications does not exceed 75 percent of the
retail price of a comparable new article.
(2) Exception
Paragraph (1) shall not apply if the article (as repaired or
modified) would, if new, be taxable under section 4051 and the
article when new was not taxable under such section or the
corresponding provision of prior law.
(g) Regulations
The Secretary shall prescribe regulations which permit, in lieu
of any other certification, persons who are purchasing articles
taxable under this subchapter for resale or leasing in a long-term
lease to execute a statement (made under penalties of perjury) on
the sale invoice that such sale is for resale. The Secretary shall
not impose any registration requirement as a condition of using
such procedure.
Sources
(Added Pub. L. 97-424, title V, Sec. 512(b)(1), Jan. 6, 1983, 96
Stat. 2175; amended Pub. L. 98-369, div. A, title VII, Sec. 731,
735(b)(2), July 18, 1984, 98 Stat. 976, 981; Pub. L. 100-17, title
V, Sec. 505(a)-(c), 506(a), Apr. 2, 1987, 101 Stat. 258, 259; Pub.
L. 100-647, title VI, Sec. 6111(a), Nov. 10, 1988, 102 Stat. 3713;
Pub. L. 105-34, title XIV, Sec. 1402(b), 1434(a), (b), Aug. 5,
1997, 111 Stat. 1046, 1052; Pub. L. 105-206, title VI, Sec.
6014(c), July 22, 1998, 112 Stat. 820.)
Miscellaneous
PRIOR PROVISIONS
A prior section 4052, act Aug. 16, 1954, ch. 736, 68A Stat. 479,
provided that lease of an article would be considered the sale of
article for excise tax purposes, prior to repeal by Pub. L. 94-455,
title XIX, Sec. 1904(a)(1)(D), Oct. 4, 1976, 90 Stat. 1811.
AMENDMENTS
1998 - Subsec. (f)(2). Pub. L. 105-206 substituted ''such
section'' for ''this section''.
1997 - Subsec. (b)(1)(B)(ii) to (iv). Pub. L. 105-34, Sec.
1402(b), inserted ''and'' at end of cl. (ii), redesignated cl. (iv)
as (iii), and struck out former cl. (iii) which read as follows:
''the fair market value (including any tax imposed by section 4071)
at retail of any tires (not including any metal rim or rim base),
and''.
Subsec. (d). Pub. L. 105-34, Sec. 1434(b)(1), substituted ''rules
of subsections (c) and (d) of section 4216 (relating to partial
payments) shall apply'' for ''rules of -
''(1) subsections (c) and (d) of section 4216 (relating to
partial payments), and
''(2) section 4222 (relating to registration),
shall apply''.
Subsec. (e). Pub. L. 105-34, Sec. 1434(a), redesignated subsec.
(f) as (e).
Subsec. (f). Pub. L. 105-34, Sec. 1434(a), added subsec. (f).
Former subsec. (f) redesignated (e).
Subsec. (g). Pub. L. 105-34, Sec. 1434(b)(2), added subsec. (g).
1988 - Subsec. (a)(1). Pub. L. 100-647 substituted ''production,
manufacture'' for ''manufacture, production''.
1987 - Subsec. (a)(1). Pub. L. 100-17, Sec. 505(a), inserted ''or
leasing in a long-term lease'' after ''resale''.
Subsec. (b)(3). Pub. L. 100-17, Sec. 505(b), added par. (3).
Subsec. (b)(4). Pub. L. 100-17, Sec. 506(a), added par. (4).
Subsec. (f). Pub. L. 100-17, Sec. 505(c), added subsec. (f).
1984 - Subsec. (b)(1)(B)(iv). Pub. L. 98-369, Sec. 731, added cl.
(iv).
Subsec. (c). Pub. L. 98-369, Sec. 735(b)(2), in amending subsec.
(c) generally, designated existing provisions as par. (1), in par.
(1) as so designated substituted ''by reason of merely combining
such article with any article listed in paragraph (2)'' for ''with
any equipment or other item listed in section 4063(d)'', and added
par. (2).
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by Pub. L. 105-206 effective, except as otherwise
provided, as if included in the provisions of the Taxpayer Relief
Act of 1997, Pub. L. 105-34, to which such amendment relates, see
section 6024 of Pub. L. 105-206, set out as a note under section 1
of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 1402(b) of Pub. L. 105-34 effective Jan. 1,
1998, see section 1402(c) of Pub. L. 105-34, set out as a note
under section 4051 of this title.
Section 1434(c) of Pub. L. 105-34 provided that: ''The amendments
made by this section (amending this section) shall take effect on
January 1, 1998.''
EFFECTIVE DATE OF 1988 AMENDMENT
Section 6111(b) of Pub. L. 100-647 provided that: ''The amendment
made by subsection (a) (amending this section) shall take effect on
January 1, 1988.''
EFFECTIVE DATE OF 1987 AMENDMENT
Section 505(d) of Pub. L. 100-17 provided that: ''The amendments
made by this section (amending this section) shall apply with
respect to articles sold by the manufacturer, producer, or importer
on or after the first day of the first calendar quarter which
begins more than 90 days after the date of the enactment of this
Act (Apr. 2, 1987).''
Section 506(b) of Pub. L. 100-17 provided that: ''The amendment
made by this section (amending this section) shall apply with
respect to articles sold by the manufacturer, producer, or importer
on or after the 1st day of the 1st calendar quarter which begins
more than 90 days after the date of the enactment of this Act (Apr.
2, 1987).''
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 effective, except as otherwise
provided, as if included in the provisions of the Highway Revenue
Act of 1982, title V of Pub. L. 97-424, to which such amendment
relates, see section 736 of Pub. L. 98-369, set out as a note under
section 4051 of this title.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 4002 of this title.
