
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC4001]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                 Subtitle D--Miscellaneous Excise Taxes
 
                     CHAPTER 31--RETAIL EXCISE TAXES
 
               Subchapter A--Luxury Passenger Automobiles
 
Sec. 4001. Imposition of tax


(a) Imposition of tax

                           (1) In general

        There is hereby imposed on the 1st retail sale of any passenger 
    vehicle a tax equal to 10 percent of the price for which so sold to 
    the extent such price exceeds the applicable amount.

                        (2) Applicable amount

        (A) In general

            Except as provided in subparagraphs (B) and (C), the 
        applicable amount is $30,000.

        (B) Qualified clean-fuel vehicle property

            In the case of a passenger vehicle which is propelled by a 
        fuel which is not a clean-burning fuel and to which is installed 
        qualified clean-fuel vehicle property (as defined in section 
        179A(c)(1)(A)) for purposes of permitting such vehicle to be 
        propelled by a clean-burning fuel, the applicable amount is 
        equal to the sum of--
                (i) the dollar amount in effect under subparagraph (A), 
            plus
                (ii) the increase in the price for which the passenger 
            vehicle was sold (within the meaning of section 4002) due to 
            the installation of such property.

        (C) Purpose built passenger vehicle

            (i) In general

                In the case of a purpose built passenger vehicle, the 
            applicable amount is equal to 150 percent of the dollar 
            amount in effect under subparagraph (A).
            (ii) Purpose built passenger vehicle

                For purposes of clause (i), the term ``purpose built 
            passenger vehicle'' means a passenger vehicle produced by an 
            original equipment manufacturer and designed so that the 
            vehicle may be propelled primarily by electricity.

(b) Passenger vehicle

                           (1) In general

        For purposes of this subchapter, the term ``passenger vehicle'' 
    means any 4-wheeled vehicle--
            (A) which is manufactured primarily for use on public 
        streets, roads, and highways, and
            (B) which is rated at 6,000 pounds unloaded gross vehicle 
        weight or less.

                          (2) Special rules

        (A) Trucks and vans

            In the case of a truck or van, paragraph (1)(B) shall be 
        applied by substituting ``gross vehicle weight'' for ``unloaded 
        gross vehicle weight''.

        (B) Limousines

            In the case of a limousine, paragraph (1) shall be applied 
        without regard to subparagraph (B) thereof.

(c) Exceptions for taxicabs, etc.

    The tax imposed by this section shall not apply to the sale of any 
passenger vehicle for use by the purchaser exclusively in the active 
conduct of a trade or business of transporting persons or property for 
compensation or hire.

(d) Exemption for law enforcement uses, etc.

    No tax shall be imposed by this section on the sale of any passenger 
vehicle--
        (1) to the Federal Government, or a State or local government, 
    for use exclusively in police, firefighting, search and rescue, or 
    other law enforcement or public safety activities, or in public 
    works activities, or
        (2) to any person for use exclusively in providing emergency 
    medical services.

(e) Inflation adjustment

                           (1) In general

        The $30,000 amount in subsection (a) shall be increased by an 
    amount equal to--
            (A) $30,000, multiplied by
            (B) the cost-of-living adjustment under section 1(f)(3) for 
        the calendar year in which the vehicle is sold, determined by 
        substituting ``calendar year 1990'' for ``calendar year 1992'' 
        in subparagraph (B) thereof.

                            (2) Rounding

        If any amount as adjusted under paragraph (1) is not a multiple 
    of $2,000, such amount shall be rounded to the next lowest multiple 
    of $2,000.

(f) Phasedown

    For sales occurring in calendar years after 1995 and before 2003, 
subsection (a)(1) and section 4003(a) shall be applied by substituting 
for ``10 percent'', each place it appears, the percentage determined in 
accordance with the following table:

If the calendar year is:                              The percentage is:
  1996.................................................... 9 percent    
  1997.................................................... 8 percent    
  1998.................................................... 7 percent    
  1999.................................................... 6 percent    
  2000.................................................... 5 percent    
  2001.................................................... 4 percent    
  2002..................................................... 3 percent    
                                                                       .

(g) Termination

    The taxes imposed by this section and section 4003 shall not apply 
to any sale, use, or installation after December 31, 2002.

(Added Pub. L. 101-508, title XI, Sec. 11221(a), Nov. 5, 1990, 104 Stat. 
1388-439; amended Pub. L. 103-66, title XIII, Sec. 13161(a), Aug. 10, 
1993, 107 Stat. 449; Pub. L. 104-188, title I, Secs. 1607(a), (b), 
1703(c)(1), Aug. 20, 1996, 110 Stat. 1839, 1875; Pub. L. 105-34, title 
IX, Sec. 906(a)-(b)(2), title XVI, Sec. 1601(f)(3)(A), (B), Aug. 5, 
1997, 111 Stat. 874, 875, 1090.)

  Adjustment of Threshold Price for Purposes of Determining Excise Tax 
                Under This Section for Calendar Year 2001

        For adjustment of threshold price above which purchase of luxury 
    passenger vehicle becomes subject to excise tax under this section 
    for calendar year 2001, see section 3.19 of Revenue Procedure 2001-
    13, set out as a note under section 1 of this title.


                               Amendments

    1997--Subsec. (a). Pub. L. 105-34, Sec. 906(a), amended heading and 
text of subsec. (a) generally. Prior to amendment, text read as follows: 
``There is hereby imposed on the 1st retail sale of any passenger 
vehicle a tax equal to 10 percent of the price for which so sold to the 
extent such price exceeds $30,000.''
    Subsec. (e)(1). Pub. L. 105-34, Sec. 906(b)(1), struck out ``and 
section 4003(a)'' after ``in subsection (a)'' in introductory 
provisions.
    Subsec. (f). Pub. L. 105-34, Sec. 1601(f)(3)(A)(i), inserted ``and 
section 4003(a)'' after ``subsection (a)''.
    Pub. L. 105-34, Sec. 1601(f)(3)(A)(ii), inserted ``, each place it 
appears,'' before ``the percentage''.
    Pub. L. 105-34, Sec. 906(b)(2), substituted ``subsection (a)(1)'' 
for ``subsection (a)''.
    Subsec. (g). Pub. L. 105-34, Sec. 1601(f)(3)(B), substituted ``taxes 
imposed by this section and section 4003'' for ``tax imposed by this 
section'' and ``, use, or installation'' for ``or use''.
    1996--Subsec. (e). Pub. L. 104-188, Sec. 1703(c)(1), reenacted 
heading without change and amended text generally. Prior to amendment, 
text read as follows:
    ``(1) In general.--If, for any calendar year, the excess (if any) 
of--
        ``(A) $30,000, increased by the cost-of-living adjustment for 
    the calendar year, over
        ``(B) the dollar amount in effect under subsection (a) for the 
    calendar year,
is equal to or greater than $2,000, then the $30,000 amount in 
subsection (a) and section 4003(a) (as previously adjusted under this 
subsection) for any subsequent calendar year shall be increased by the 
amount of such excess rounded to the next lowest multiple of $2,000.
    ``(2) Cost-of-living adjustment.--For purposes of paragraph (1), the 
cost-of-living adjustment for any calendar year shall be the cost-of-
living adjustment under section 1(f)(3) for such calendar year, 
determined by substituting `calendar year 1990' for `calendar year 1992' 
in subparagraph (B) thereof.''
    Subsec. (f). Pub. L. 104-188, Sec. 1607(b), added subsec. (f). 
Former subsec. (f) redesignated (g).
    Pub. L. 104-188, Sec. 1607(a), substituted ``December 31, 2002'' for 
``December 31, 1999''.
    Subsec. (g). Pub. L. 104-188, Sec. 1607(b), redesignated subsec. (f) 
as (g).
    1993--Pub. L. 103-66 amended section generally, substituting 
``Imposition of tax'' for ``Passenger vehicles'' in section catchline 
and ``this subchapter'' for ``subsection (a)'' in subsec. (b)(1) and 
adding subsecs. (d) to (f).


                    Effective Date of 1997 Amendment

    Section 906(c) of Pub. L. 105-34 provided that: ``The amendments 
made by this section [amending this section and section 4003 of this 
title] shall apply to sales and installations occurring after the date 
of the enactment of this Act [Aug. 5, 1997].''
    Section 1601(f)(3)(C) of Pub. L. 105-34 provided that: ``The 
amendments made by this paragraph [amending this section] shall apply to 
sales after the date of the enactment of this Act [Aug. 5, 1997].''
    Amendment by section 1601(f)(3)(A), (B) of Pub. L. 105-34 effective 
as if included in the provisions of the Small Business Job Protection 
Act of 1996, Pub. L. 104-188, to which it relates, see section 1601(j) 
of Pub. L. 105-34, set out as a note under section 23 of this title.


                    Effective Date of 1996 Amendment

    Section 1607(c) of Pub. L. 104-188 provided that: ``The amendments 
made by this section [amending this section] shall apply with respect to 
sales occurring after the date which is 7 days after the date of the 
enactment of this Act [Aug. 20, 1996].''
    Section 1703(c)(2) of Pub. L. 104-188 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall take effect on the 
date of the enactment of this Act [Aug. 20, 1996].''


                    Effective Date of 1993 Amendment

    Section 13161(c) of Pub. L. 103-66 provided that: ``The amendments 
made by this section [amending this section and sections 4002, 4003, 
4221, and 4222 of this title and omitting sections 4004, 4006, 4007, 
4011, and 4012 of this title] shall take effect on January 1, 1993, 
except that the provisions of section 4001(e) of the Internal Revenue 
Code of 1986 (as amended by subsection (a)) shall take effect on the 
date of the enactment of this Act [Aug. 10, 1993].''


                             Effective Date

    Section 11221(f) of Pub. L. 101-508 provided that:
    ``(1) In general.--The amendments made by this section [enacting 
this subchapter, redesignating former subchapters A and B of this 
chapter as subchapters B and C, respectively, and amending sections 
4221, 4222, and 4293 of this title] shall take effect on January 1, 
1991.
    ``(2) Exception for binding contracts.--In determining whether any 
tax imposed by subchapter A of chapter 31 of the Internal Revenue Code 
of 1986, as added by this section, applies to any sale after December 
31, 1990, there shall not be taken into account the amount paid for any 
article (or any part or accessory therefor) if the purchaser held on 
September 30, 1990, a contract (which was binding on such date and at 
all times thereafter before the purchase) for the purchase of such 
article (or such part or accessory).''

                  Section Referred to in Other Sections

    This section is referred to in sections 280F, 4003, 4221, 4222 of 
this title.
