REPEAL OF MANUFACTURERS EXCISE TAX ON PASSENGER AUTOMOBILES, LIGHT-DUTY TRUCKS, ETC.

SEC. 401. REPEAL OF MANUFACTURERS EXCISE TAX ON PASSENGER AUTOMOBILES, LIGHT-DUTY TRUCKS, ETC. (a) Repeal of and Exemptions From Tax— (1) Repeal—Section 4061(a) (relating to tax on automobiles, etc.) is amended to read as follows: “(a) Trucks, Buses, Tractors, Etc.— “(1) Tax imposed—There is hereby imposed upon the following articles (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof) sold by the manufacturer, producer, or importer a tax of 10 percent of the price for which so sold, except that on and after October 1, 1977, the rate shall be 5 percent— “Automobile truck chassis. “Automobile truck bodies. “Automobile bus chassis. “Automobile bus bodies. “Truck and bus trailer and semitrailer chassis. “Truck and bus trailer and semitrailer bodies. “Tractors of the kind chiefly used for highway transportation in combination with a trailer or semitrailer. A sale of an automobile truck, bus, truck or bus trailer or semi-trailer shall, for the purposes of this subsection, be considered to be a sale of a chassis and of a body enumerated in this subsection. “(2) Exclusion for light-duty trucks, etc.— The tax imposed by paragraph (1) shall not apply to a sale by the manufacturer, producer, or importer of the following articles suitable for use with a vehicle having a gross vehicle weight of 10,000 pounds or less (as determined under regulations prescribed by the Secretary or his delegate)— “Automobile truck chassis. “Automobile truck bodies. “Automobile bus chassis. “Automobile bus bodies. “Truck trailer and semitrailer chassis and bodies, suit-able for use with a trailer or semitrailer having a gross vehicle weight of 10,000 pounds or less (as so determined).” (2) Exemptions for local transit buses, and for trash containers, etc.—Section 406.3(a) (relating to exemptions for specified articles) is amended by adding at the end thereof the following new paragraphs: “(6) Local transit buses—The tax imposed under section 4061(a) shall not apply in the case of automobile bus chassis or automobile bus bodies which are to be used predominantly by the purchaser in mass transportation service in urban areas. “(7) Trash containers, etc.—The tax imposed under section 4061(a) shall not apply in the case of any box, container, receptacle, bin, or other similar article which is to be used as a trash container and is not designed for the transportation of freight other than trash, and which is not designed to be permanently mounted on or permanently affixed to an automobile truck chassis or body, or in the case of parts or accessories designed primarily for use on, in connection with, or as a component part of any such article.” 85 Stat. 531 (3) Technical amendments— (A) Section 4221(c) (relating to relief of manufacturer from liability in certain cases) is amended by striking out “section 4063(b),” and inserting in lieu thereof “section 4063 (a) (6) or (7), 4063(b),”. (B) Section 4222(d) (relating to registration in the case of certain exemptions) is amended by striking out “sections 4063(b),” and inserting in lieu thereof “sections 4063(a) (6) and (7), 4063(b),”. (C) Section 6416(b)(2) (relating to specified uses and resales in case of which tax payments are considered overpayments) is amended— (i) by striking out “described in section 4221(e) (5).” in subparagraph (R) and inserting in lieu thereof “described in section 4063(a) (6) or 4221 (e) (5); or”; and (ii) by adding at the end thereof the following new subparagraph: “(S) in the case of a box, container, receptacle, bin, or other similar article taxable under section 4061(a), sold to any person for use as described in section 4063(a) (7).” (b) Floor Stocks Refunds— (1) In general.— Where, before the day after the date of the enactment of this Act, any tax-repealed article (as defined in subsection (e)) has been sold by the manufacturer, producer, or importer and on such day is held by a dealer and has not been used and is intended for sale, there shall be credited or refunded (without interest) to the manufacturer, producer, or importer an amount equal to the tax paid by such manufacturer, producer, or importer on his sale of the article, if— (A) claim for such credit or refund is filed with the Secretary of the Treasury or his delegate before the first day of the 10th calendar month beginning after the day after the date of the enactment of this Act based upon a request submitted to the manufacturer, producer, or importer before the first day of the 7th calendar month beginning after the day after the date of the enactment of this Act by the dealer who held the article in respect of which the credit or refund is claimed; and (B) on or before the first day of such 10th calendar month reimbursement has been made to the dealer by the manufacturer, producer, or importer in an amount equal to the tax paid on the article or written consent has been obtained from the dealer to allowance of the credit or refund. (2) Limitation on eligibility for credit or refund—No manufacturer, producer, or importer shall be entitled to credit or refund under paragraph (1) unless he has in his possession such evidence of the inventories with respect to which the credit or refund is claimed as may be required by regulations prescribed by the Secretary of the Treasury or his delegate under this subsection. (3) Other laws applicable.—All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4061(a) of the Internal Revenue Code of 1954 shall, insofar as applicable and not inconsistent with paragraphs (1) and (2) of this subsection, apply in respect of the credits and refunds provided for in paragraph (1) to the same extent as if the credits or refunds constituted overpayments of the tax. 85 Stat. 532 (c) Refunds With Respect to Certain Consumer Purchases— (1) In general—Except as otherwise provided in paragraph (2), where— (A) after August 15, 1971, with respect to any article which was subject to the tax imposed by section 4061(a) (2) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act), or (B) after September 22, 1971, with respect to any article which was subject to the tax imposed by section 4061(a) (1) of such Code (as in effect on the day before the date of the enactment of this Act), and on or before such date of enactment, a tax-repealed article (as defined in subsection (e)) has been sold to an ultimate purchaser, there shall be credited or refunded (without interest) to the manufacturer, producer, or importer of such article an amount equal to the tax paid by such manufacturer, producer, or importer on his sale of the article. (2) Limitation on eligibility for credit or refund—No manufacturer, producer, or importer shall be entitled to a credit or refund under paragraph (1) with respect to an article unless— (A) he has in his possession such evidence of the sale of the article to an ultimate purchaser, and of the reimbursement of the tax to such purchaser, as may be required by regulations prescribed by the Secretary of the Treasury or his delegate under this subsection; (B) claim for such credit or refund is filed with the Secretary of the Treasury or his delegate before the first day of the 10th calendar month beginning after the day after the date of the enactment of this Act based upon information submitted to the manufacturer, producer, or importer before the first day of the 7th calendar month beginning after the day after the date of the enactment of this Act by the person who sold the article (in respect of which the credit or refund is claimed) to the ultimate purchaser; and (C) on or before the first day of such 10th calendar month reimbursement has been made to the ultimate purchaser in an amount equal to the tax paid on the article. (3)Other laws applicable—All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4061(a) of the Internal Revenue Code of 1954 shall, insofar as applicable and not inconsistent with paragraph (1) or (2) of this subsection, apply in respect of the credits and refunds provided for in paragraph (1) to the same extent as if the credits or refunds constituted overpayments of the tax. (d) Certain Uses by Manufacturer, Etc.—Any tax paid by reason of section 4218(a) of the Internal Revenue Code of 1954 (relating to use by manufacturer or importer considered sale) shall be deemed an overpayment of such tax with respect to— (1) any article which was subject to the tax imposed by section 4061(a) (2) of such Code as in effect on the day before the date of the enactment of this Act if tax was imposed on such article by reason of such section 4218(a) after August 15, 1971, and (2) any article which was subject to the tax imposed by section 4061 (a)(1) of such Code as in effect on the day before the date of the enactment of this Act and on which such tax is no longer imposed (by reason of subsection (a) of this section) if tax was imposed on such article by reason of such section 4218(a) after September 22, 1971. 85 Stat. 533 (e) Definitions—For purposes of this section— (1) The term “dealer” includes a wholesaler, jobber, distributor, or retailer. (2) An article shall be considered as “held by a dealer” if title thereto has passed to such dealer (whether or not delivery to him has been made) and if for purposes of consumption title to such article or possession thereof has not at any time been transferred to any person other than a dealer. (3) The term “tax-repealed article” means an article on which a tax was imposed by section 4061(a) of the Internal Revenue Code of 1954 as in effect on the day before the date of the enactment of this Act and is not imposed (without regard to the amendment made by paragraph (2) of subsection (a) of this section) under such section 4061(a) as in effect on the day after the date of the enactment of this Act. (f) Original Equipment Tires on Imported Articles—Section 4071 (relating to tax on tires and tubes) is amended by adding at the end thereof the following new subsection: “(e) Tires on Imported Articles—For the purposes of subsection (a), if an article imported into the United States is equipped with tires or inner tubes (other than bicycle tires and inner tubes)— “(1) the importer of the article shall be treated as the importer of the tires and inner tubes with which such article is equipped, and “(2) the sale of the article by the importer thereof shall be treated as the sale of the tires and inner tubes with which such article is equipped. This subsection shall not apply with respect to the sale of an article if a tax on such sale is imposed under section 4061.” (g) Technical and Conforming Amendments— (1) Section 4061(b)(2) (relating to parts and accessories) is amended by striking out “any article enumerated in subsection (a) (2) or a house trailer” and inserting in lieu thereof “any chassis or body for a passenger automobile, any chassis or body for a trailer or semitrailer suitable for use in connection with a passenger automobile, or a house trailer”. (2) (A) Section 4062 (relating to definitions applicable to tax on motor vehicles) is amended by striking out subsection (b). (B) The heading of section 4062 is amended to read as follows: “SEC. 4062. ARTICLES CLASSIFIED AS PARTS.” (C) Section 4062 is amended by striking out “(a) Certain Articles Considered as Parts—”. (D) The item relating to section 4062 in the table of sections for part I of subchapter A of chapter 32 is amended to read as follows: “Sec. 4062. Articles classified as parts.”. (3) Section 4063(a)(4) (relating to exemptions for specified articles) is amended to read as follows: “(4) Ambulances, hearses, etc.—The tax imposed by section 4061(a) shall not apply in the case of an ambulance, hearse, or combination ambulance-hearse.” (4) Section 4216 (relating to definition of price) is amended— (A) in subsections (b) (2) (C) and (b)(5) by striking out “(relating to automobiles, trucks, etc.),” and inserting in lieu thereof “(relating to trucks, buses, tractors, etc.),”; and (B) in subsection (g) by inserting “tractors,” immediately after “buses,”. (5) Section 6412(a) (relating to floor stocks refunds) is amended by striking out paragraph (1). 85 Stat. 534 (6) The heading of section 6416(g) (relating to certain exports) is amended to read as follows: “(g) Trucks, Buses, Tractors, Etc.—”. (7) (A) Section 304 of the Excise, Estate, and Gift Tax Adjustment Act of 1970, Public Law 91–614 (relating to new car labels), is hereby repealed. (B) Subparagraph (A) shall apply to acts (or failures to act) after the date of the enactment of this Act. (h) Effective Date— (1) Except as otherwise provided in this section, the amendments made by subsections (a), (f), and (g) of this section shall apply with respect to articles sold on or after the day after the date of the enactment of this Act. (2) For purposes of paragraph (1), an article shall not be considered sold before the day after the date of the enactment of this Act unless possession or right to possession passes to the purchaser before such day. (3) In the case of— (A) a lease, (B) a contract for the sale of an article where it is provided that the price shall be paid by installments and title to the article sold does not pass until a future date notwithstanding partial payment by installments, (C) a conditional sale, or (D) a chattel mortgage arrangement wherein it is provided that the sale price shall be paid in installments, entered into on or before the date of the enactment of this Act, payments made after such date with respect to the article leased or sold shall, for purposes of this subsection, be considered as payments made with respect to an article sold after such date, it the lessor or vendor establishes that the amount of payments payable after such date with respect to such article has been reduced by an amount equal to that portion of the tax applicable with respect to the lease or sale of such article which is due and payable after such date. If the lessor or vendor does not establish that the payments have been so reduced, they shall be treated as payments made in respect of an article sold before the day after the date of the enactment of this Act.