Public Law 84–317

That section 4216 (c) (1) of the Internal Revenue Code of 1954 is amended by inserting after “lease” the following: “(other than a lease to which subsection (d) applies)”.

Sec. 2.

Section 4216 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following:

“(d)“(d)

Leases of Certain Trailers.—In the case of any lease of a trailer or semitrailer taxable under section 4061 (a) and suitable for

26 USC 4061.

use in connection with passenger automobiles, there shall be paid, at the election of the taxpayer—

“(1)“(1)

upon the initial lease a tax at the applicable rate specified in section 4061 (a) based upon the fair market value on the date of such lease, or

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“(2)“(2)

upon each lease payment with respect to such trailer or semitrailer, a percentage of such payment equal to the rate of tax which would be imposed upon the sale of such trailer or semitrailer, until the total of the tax payments under such lease and any prior lease equals the total tax. In any case where a trailer or semitrailer which has been leased is sold before the total tax has been paid, the tax payable on such sale shall be the difference between the tax paid on the lease payments and the total tax. For purposes of this paragraph, the term ‘total tax’ means the tax computed, at the rate in effect on the date of the initial lease, on the fair market value on the date of such lease. However, in the case where a trailer or semitrailer which has been leased is sold before the total tax has been paid, the total tax shall not exceed a tax computed, at the rate in effect on the date of the initial lease, on the amount received on such sale (determined without regard to section 4216 (b)) plus the total of the payments received by the lessor under any lease of such trailer or semitrailer.”

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Sec. 3.

Section 4217 of the Internal Revenue Code of 1954 is amended

26 USC 4217.

by adding at the end thereof a new sentence as follows: “This section shall not apply to the lease of an article upon which the tax has been paid in the manner provided in section 4216 (d) (1) or the total tax has been paid in the manner provided in section 4216 (d) (2).”

Sec. 4.

The amendments made by subsection (a) shall take effect

Effective date.

on the first day of the first month which begins more than TO days after the date of the enactment of this Act. In the application of section 4216 (d) of the Internal Revenue Code of 1954 (as added by this Act) to any article which has been leased before the effective date specified in the preceding sentence, under regulations prescribed by the Secretary of the Treasury or his delegate—