Internal Revenue Code:Sec. 4003. Special rules

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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. 4003. Special rules
 
    (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.
 

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. 451; Pub. L. 105-34, title IX, Sec.
    906(b)(3), (4), title XIV, Sec. 1401(a), Aug. 5, 1997, 111 Stat.
    875, 1045.)
 

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

                              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, Sec. 13161(a), Aug. 10, 1993, 107 Stat. 449.
      Section 4004, added Pub. L. 101-508, title XI, Sec. 11221(a),
    Nov. 5, 1990, 104 Stat. 1388-440; amended Pub. L. 103-66, title
    XIII, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 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, Sec. 1401(a), substituted
    ''$1,000'' for ''$200''.
      1993 - Pub. L. 103-66 amended 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) of Pub. L. 105-34 applicable
    to sales and installations occurring after Aug. 5, 1997, see
    section 906(c) of Pub. L. 105-34, set out as a note under section
    4001 of this title.
      Section 1401(b) of Pub. L. 105-34 provided 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. 103-66 effective Jan. 1, 1993, see section
    13161(c) of Pub. L. 103-66, set out as a note under section 4001 of
    this title.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 4001, 4002 of this title.