26 USC § 4003 - Special rules | Title 26 - Internal Revenue Code | U.S. Code

USCPrelim is a preliminary release and may be subject to further revision before it is released again as a final version.

Current through Pub. L. 112-143, except 112-141. (See Public Laws for the current Congress.)

(a) Separate purchase of vehicle and parts and accessories therefor

Under regulations prescribed by the Secretary—

(1) In general

Except as provided in paragraph (2), if—

(A) the owner, lessee, or operator of any passenger vehicle installs (or causes to be installed) any part or accessory (other than property described in section 4001 (a)(2)(B)) on such vehicle, and

(B) such installation is not later than the date 6 months after the date the vehicle was 1st placed in service,

then there is hereby imposed on such installation a tax equal to 10 percent of the price of such part or accessory and its installation.

(2) Limitation

The tax imposed by paragraph (1) on the installation of any part or accessory shall not exceed 10 percent of the excess (if any) of—

(A) the sum of—

(i) the price of such part or accessory and its installation,

(ii) the aggregate price of the parts and accessories (and their installation) installed before such part or accessory, plus

(iii) the price for which the passenger vehicle was sold, over

(B) the appropriate applicable amount as determined under section 4001 (a)(2).

(3) Exceptions

Paragraph (1) shall not apply if—

(A) the part or accessory installed is a replacement part or accessory,

(B) the part or accessory is installed to enable or assist an individual with a disability to operate the vehicle, or to enter or exit the vehicle, by compensating for the effect of such disability, or

(C) the aggregate price of the parts and accessories (and their installation) described in paragraph (1) with respect to the vehicle does not exceed $1,000 (or such other amount or amounts as the Secretary may by regulation prescribe).

The price of any part or accessory (and its installation) to which paragraph (1) does not apply by reason of this paragraph shall not be taken into account under paragraph (2)(A).

(4) Installers secondarily liable for tax

The owners of the trade or business installing the parts or accessories shall be secondarily liable for the tax imposed by this subsection.

(b) Imposition of tax on sales, etc., within 2 years of vehicles purchased tax-free

(1) In general

If—

(A) no tax was imposed under this subchapter on the 1st retail sale of any passenger vehicle by reason of its exempt use, and

(B) within 2 years after the date of such 1st retail sale, such vehicle is resold by the purchaser or such purchaser makes a substantial nonexempt use of such vehicle,

then such sale or use of such vehicle by such purchaser shall be treated as the 1st retail sale of such vehicle for a price equal to its fair market value at the time of such sale or use.

(2) Exempt use

For purposes of this subsection, the term “exempt use” means any use of a vehicle if the 1st retail sale of such vehicle is not taxable under this subchapter by reason of such use.

(c) Parts and accessories sold with taxable passenger vehicle

Parts and accessories sold on, in connection with, or with the sale of any passenger vehicle shall be treated as part of the vehicle.

(d) Partial payments, etc.

In the case of a contract, sale, or arrangement described in paragraph (2), (3), or (4) of section 4216 (c), rules similar to the rules of section 4217 (e)(2) shall apply for purposes of this subchapter.

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(a) Separate purchase of vehicle and parts and accessories therefor

Under regulations prescribed by the Secretary—

(1) In general

Except as provided in paragraph (2), if—

(A) the owner, lessee, or operator of any passenger vehicle installs (or causes to be installed) any part or accessory (other than property described in section 4001 (a)(2)(B)) on such vehicle, and

(B) such installation is not later than the date 6 months after the date the vehicle was 1st placed in service,

then there is hereby imposed on such installation a tax equal to 10 percent of the price of such part or accessory and its installation.

(2) Limitation

The tax imposed by paragraph (1) on the installation of any part or accessory shall not exceed 10 percent of the excess (if any) of—

(A) the sum of—

(i) the price of such part or accessory and its installation,

(ii) the aggregate price of the parts and accessories (and their installation) installed before such part or accessory, plus

(iii) the price for which the passenger vehicle was sold, over

(B) the appropriate applicable amount as determined under section 4001 (a)(2).

(3) Exceptions

Paragraph (1) shall not apply if—

(A) the part or accessory installed is a replacement part or accessory,

(B) the part or accessory is installed to enable or assist an individual with a disability to operate the vehicle, or to enter or exit the vehicle, by compensating for the effect of such disability, or

(C) the aggregate price of the parts and accessories (and their installation) described in paragraph (1) with respect to the vehicle does not exceed $1,000 (or such other amount or amounts as the Secretary may by regulation prescribe).

The price of any part or accessory (and its installation) to which paragraph (1) does not apply by reason of this paragraph shall not be taken into account under paragraph (2)(A).

(4) Installers secondarily liable for tax

The owners of the trade or business installing the parts or accessories shall be secondarily liable for the tax imposed by this subsection.

(b) Imposition of tax on sales, etc., within 2 years of vehicles purchased tax-free

(1) In general

If—

(A) no tax was imposed under this subchapter on the 1st retail sale of any passenger vehicle by reason of its exempt use, and

(B) within 2 years after the date of such 1st retail sale, such vehicle is resold by the purchaser or such purchaser makes a substantial nonexempt use of such vehicle,

then such sale or use of such vehicle by such purchaser shall be treated as the 1st retail sale of such vehicle for a price equal to its fair market value at the time of such sale or use.

(2) Exempt use

For purposes of this subsection, the term “exempt use” means any use of a vehicle if the 1st retail sale of such vehicle is not taxable under this subchapter by reason of such use.

(c) Parts and accessories sold with taxable passenger vehicle

Parts and accessories sold on, in connection with, or with the sale of any passenger vehicle shall be treated as part of the vehicle.

(d) Partial payments, etc.

In the case of a contract, sale, or arrangement described in paragraph (2), (3), or (4) of section 4216 (c), rules similar to the rules of section 4217 (e)(2) shall apply for purposes of this subchapter.

Source

(Added Pub. L. 101–508, title XI, § 11221(a),Nov. 5, 1990, 104 Stat. 1388–439; amended Pub. L. 103–66, title XIII, § 13161(a),Aug. 10, 1993, 107 Stat. 451; Pub. L. 105–34, title IX, § 906(b)(3), (4), title XIV, § 1401(a),Aug. 5, 1997, 111 Stat. 875, 1045.)

Prior Provisions

Prior sections 4004, 4006, 4007, 4011, and 4012 of this title were omitted in the general revision of this subchapter by Pub. L. 103–66, title XIII, § 13161(a),Aug. 10, 1993, 107 Stat. 449.

Section 4004, added Pub. L. 101–508, title XI, § 11221(a),Nov. 5, 1990, 104 Stat. 1388–440; amended Pub. L. 103–66, title XIII, § 13162(a),Aug. 10, 1993, 107 Stat. 453, related to certain rules applicable to former subpart A of part I of this subchapter.

Section 4006, added Pub. L. 101–508, title XI, § 11221(a),Nov. 5, 1990, 104 Stat. 1388–441, related to imposition of tax on 1st retail sale of jewelry.

Section 4007, added Pub. L. 101–508, title XI, § 11221(a),Nov. 5, 1990, 104 Stat. 1388–442, related to imposition of tax on 1st retail sale of furs.

Section 4011, added Pub. L. 101–508, title XI, § 11221(a),Nov. 5, 1990, 104 Stat. 1388–442, provided definitions and special rules for purposes of this subchapter.

Section 4012, added Pub. L. 101–508, title XI, § 11221(a),Nov. 5, 1990, 104 Stat. 1388–444, provided that taxes imposed by this subchapter did not apply to any sale or use after Dec. 31, 1999.

Amendments

1997—Subsec. (a)(1). Pub. L. 105–34, § 906(b)(3), inserted “(other than property described in section 4001 (a)(2)(B))” after “part or accessory”.

Subsec. (a)(2)(B). Pub. L. 105–34, § 906(b)(4), amended subpar. (B) generally, substituting “the appropriate applicable amount as determined under section 4001 (a)(2)” for “$30,000”.

Subsec. (a)(3)(C). Pub. L. 105–34, § 1401(a), substituted “$1,000” for “$200”.

1993—Pub. L. 103–66amended section generally, substituting provisions prescribing special rules applicable to imposition of luxury passenger automobile tax for provisions relating to imposition of similar tax on aircraft.

Effective Date of 1997 Amendment

Amendment by section 906(b)(3), (4) ofPub. L. 105–34applicable to sales and installations occurring after Aug. 5, 1997, see section 906(c) ofPub. L. 105–34, set out as a note under section 4001 of this title.

Section 1401(b) ofPub. L. 105–34provided that: “The amendments made by subsection (a) [amending this section and section 4051 of this title] shall apply to installations on vehicles sold after the date of the enactment of this Act [Aug. 5, 1997].”

Effective Date of 1993 Amendment

Amendment by Pub. L. 103–66effective Jan. 1, 1993, see section 13161(c) ofPub. L. 103–66, set out as a note under section 4001 of this title.

The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.

The most recent Classification Table update that we have noticed was Thursday, March 14, 2013

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26 USC	Description of Change	Session Year	Public Law	Statutes at Large

26 USC § 4003 - Special rules

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