27 CFR 53.143 - Special rules relating to further manufacture.

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§ 53.143 Special rules relating to further manufacture.

(a)Purchasing manufacturer to be treated as the manufacturer. For purposes of Chapter 32 of the Code, a manufacturer or producer to whom an article is sold or resold tax free under section 4221(a)(1) of the Code for use by it in further manufacture shall be treated as the manufacturer or producer of such article. If a manufacturer who purchases an article tax free for further manufacture does not use the article for further manufacture, the sale of the article by it, or its use of the article other than in further manufacture, shall, for purposes of the taxes imposed by chapter 32 of the Code, be treated as a sale or use of the article by the manufacturer thereof. See paragraphs (b) and (c) of this section for determination of taxable sale price where an article purchased tax free for further manufacture is resold, or used other than in further manufacture.

(b)Computation of tax. Except as provided in paragraph (c) of this section, the tax liability referred to in paragraph (a) of this section shall be based on the price for which the article was sold by the purchasing manufacturer, or, where the manufacturer uses the article for a purpose other than that for which it was purchased, the tax shall be based on the price at which such or similar articles are sold, in the ordinary course of trade, by manufacturers, producers, or importers thereof. See section 4218(e) of the Code and § 53.115.


(1) Instead of computing the tax as described under paragraph (b) of this section, the purchasing manufacturer who has incurred liability for tax on its sale or use of an article as provided by paragraph (a) of this section may compute the tax incurred under chapter 32 of the Code by using as the tax base either the price for which the article was sold to it by the first purchaser, if any, or the price for which such article was sold by the actual manufacturer, producer, or importer of such article. The purchasing manufacturer must have in its possession information upon which to substantiate such basis for tax. For purposes of this paragraph, the price for which the article was sold by the actual manufacturer or by the first purchaser shall be determined as provided in section 4216 of the Code and §§ 53.91-53.102. However, such price shall not be adjusted for any discount, rebate, allowance, return, or repossession of a container or covering, or otherwise.

(2) The election under this paragraph shall be in the form of a statement attached to the return reporting the tax applicable to the sale or use of the article which gave rise to such tax liability. Such election, once made, may not be revoked.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code

§ 4181 - Imposition of tax

§ 4182 - Exemptions

§ 4216 - Definition of price

§ 4217 - Leases

§ 4218 - Use by manufacturer or importer considered sale

§ 4219 - Application of tax in case of sales by other than manufacturer or importer

§ 4221 - Certain tax-free sales

§ 4222 - Registration

§ 4223 - Special rules relating to further manufacture

§ 4225 - Exemption of articles manufactured or produced by Indians

§ 6001 - Notice or regulations requiring records, statements, and special returns

§ 6011 - General requirement of return, statement, or list

§ 6020 - Returns prepared for or executed by Secretary

§ 6021 - Listing by Secretary of taxable objects owned by nonresidents of internal revenue districts

§ 6061 - Signing of returns and other documents

§ 6071 - Time for filing returns and other documents

§ 6081 - Extension of time for filing returns

§ 6091 - Place for filing returns or other documents

§ 6101 - Period covered by returns or other documents

§ 6102 - Computations on returns or other documents

§ 6103 - Confidentiality and disclosure of returns and return information

§ 6104 - Publicity of information required from certain exempt organizations and certain trusts

§ 6109 - Identifying numbers

§ 6151 - Time and place for paying tax shown on returns

§ 6155 - Payment on notice and demand

§ 6161 - Extension of time for paying tax

§ 6301 - Collection authority

§ 6302 - Mode or time of collection

§ 6303 - Notice and demand for tax

§ 6311 - Payment of tax by commercially acceptable means

§ 6402 - Authority to make credits or refunds

§ 6404 - Abatements

§ 6416 - Certain taxes on sales and services

§ 7502 - Timely mailing treated as timely filing and paying

§ 7805 - Rules and regulations

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