Internal Revenue Code:Sec. 4001. Imposition of tax
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 31 - RETAIL EXCISE TAXES
Subchapter A - Luxury Passenger Automobiles
Statute
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.
Sources
(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, Sec.
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.)
Amendment of Section
ADJUSTMENT OF THRESHOLD PRICE FOR PURPOSES OF DETERMINING EXCISE
TAX UNDER THIS SECTION FOR CALENDAR YEAR 2002
For adjustment of threshold price above which purchase of
luxury passenger vehicle becomes subject to excise tax under this
section for calendar year 2002, see section 3.21 of Revenue
Procedure 2001-59, set out as a note under section 1 of this
title.
Miscellaneous
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).''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 280F, 4003, 4221, 4222 of
this title.
