
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: 26USC4052]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                 Subtitle D--Miscellaneous Excise Taxes
 
                     CHAPTER 31--RETAIL EXCISE TAXES
 
                 Subchapter C--Heavy Trucks and Trailers
 
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.

(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, Secs. 731, 735(b)(2), 
July 18, 1984, 98 Stat. 976, 981; Pub. L. 100-17, title V, Secs. 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, Secs. 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.)


                            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.

                  Section Referred to in Other Sections

    This section is referred to in section 4002 of this title.
