§ 4222. Registration

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1958

   Pub. L. 85–859 title I § 119(a) · 72 Stat. 1275

   Enacted · 26 U.S.C. § 4222

   Added Pub. L. 85–859, title I, § 119(a), Sept. 2, 1958, 72 Stat. 1284

   Source evidence

   Code source credit
   Added Pub. L. 85–859, title I, § 119(a), Sept. 2, 1958, 72 Stat. 1284

   Enacted provision · exact public law section
   (a) In General.— Chapter 32 (manufacturers excise taxes) is 26 USC 4061–4226. amended by striking out sections 4220 to 4225, inclusive, and by inserting after section 4219 the following: “Subchapter G— Exemptions, Registration, Etc. “Sec. 4221. Certain tax-free sales. “Sec. 4222. Registration. “Sec. 4223. Special rules relating to further manufacture. “Sec. 4224. Exemption for articles taxable as jewelry. “Sec. 4225. Exemption of articles manufactured or produced by Indians. “Sec. 4220. Floor stocks taxes. “Sec. 4227. Cross references. “SEC. 4221. CERTAIN TAX-FREE SALES. “(a) General Rule.— Under regulations prescribed by the Secretary or his delegate, no tax shall be imposed under this chapter on the sale by the manufacturer of an article— “(1) for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by such second purchaser in further manufacture, “(2) for export, or for resale by the purchaser to a second purchaser for export, “(3) for use by the purchaser as supplies for vessels or aircraft, “(4) to a State or local government for the exclusive use of a State or local government, or “(5) to a nonprofit educational organization for its exclusive use, but only if such exportation or use is to occur before any other use. “(b) Proof of Resale for Further Manufacture; Proof of Export.— Where an article has been sold free of tax under subsection (a)— “(1) for resale by the purchaser to a second purchaser for use by such second purchaser in further manufacture, or “(2) for export, or for resale by the purchaser to a second purchaser for export, subsection (a) shall cease to apply in respect of such sale of such article unless, within the 6month period which begins on the date of the sale by the manufacturer (or, it earlier, on the date of shipment by the manufacturer), the manufacturer receives proof that the article has been exported or resold for use in further manufacture. “(c) Manufacturer Relieved From Liability in Certain Cases.— In the case of any article sold free of tax under this section (other than a sale to which subsection (b) applies), and in the case of any article sold free of tax under section 4063 (b), 4083, or 4093, 26 USC 4063, 4083, 4093. if the manufacturer in good faith accepts a certification by the purchaser that the article will be used in accordance with the applicable provisions of law, no tax shall thereafter be imposed under this chapter in respect of such sale by such manufacturer. “(d) Definitions.— For purposes of this section— “(1) Manufacturer.— The term ‘manufacturer’ includes a producer or importer of an article. “(2) Export.— The term ‘export’ includes shipment to a possession of the United States; and the term ‘exported’ includes shipped to a possession of the United States. “(3) Supplies for vessels or aircraft.— The term ‘supplies for vessels or aircraft’ means fuel supplies, ships’ stores, sea stores, or legitimate equipment on vessels of war of the United States or of any foreign nation, vessels employed in the fisheries or in the whaling business, or vessels actually engaged in foreign trade or trade between the Atlantic and Pacific ports of the United States or between the United States and any of its possessions. For purposes of the preceding sentence, the term ‘vessels’ includes civil aircraft employed in foreign trade or trade between the United States and any of its possessions, and the term ‘vessels of war of the United States or of any foreign nation’ includes aircraft owned by the United States or by any foreign nation and constituting a part of the armed forces thereof. “(4) State or local government.— The term ‘State or local government’ means any State, Alaska, Hawaii, the District of Columbia, or any political subdivision of any of the foregoing. “(5) Nonprofit educational organization.— The term ‘nonprofit educational organization’ means an educational organization described in section 503 (b) (2) which is exempt from income 26 USC 503, 501. tax under section 501 (a). “(6) Use in further manufacture.— An article shall be treated as sold for use in further manufacture if— “(A) such article (other than an article referred to in subparagraph (B)) is sold for use by the purchaser as material in the manufacture or production of, or as a component part of, another article taxable under this chapter to be manufactured or produced by him; or “(B) in the case of a part or accessory taxable under section 4061 (b), a radio or television component taxable under section 26 USC 4061. 4141, or a camera lens taxable under section 4171, such article is sold for use by the purchaser as material in 26 USC 4171. the manufacture or production of, or as a component part of, another article to be manufactured or produced by him. “(e) Special Rules.— “(1) Reciprocity required in case of civil aircraft.— In the case of articles sold for use as supplies for aircraft, the privileges granted under subsection (a) (3) in respect of civil aircraft employed in foreign trade or trade between the United States and any of its possessions, in respect of aircraft registered in a foreign country, shall be allowed only if the Secretary of the Treasury has been advised by the Secretary of Commerce that he has found that such foreign country allows, or will allow, substantially reciprocal privileges in respect of aircraft registered in the United Sates. If the Secretary of the Treasury is advised by the Secretary of Commerce that lie has found that a foreign country has discontinued or will discontinue the allowance of such privileges, the privileges granted under subsection (a) (3) shall not apply thereafter in respect of civil aircraft registered in that foreign country and employed in foreign trade or trade between the United States and any of its possessions. “(2) Tires, tubes, and automobile receiving sets.— “(A) Tax-free sales.— Under regulations prescribed by the Secretary or his delegate, no tax shall be imposed under 26 USC 4071. section 4071 or 4141 on the sale by the manufacturer of a tire, inner tube, or automobile radio or television receiving set if— “(i) such tire, tube, or receiving set is sold for use by the purchaser for sale on or in connection with the sale of another article manufactured or produced by such purchaser; and “(ii) such other article is to be sold by such purchaser in a sale which either will satisfy the requirements of paragraph (2), (3), (4), or (5) of subsection (a) for a tax-free sale, or would satisfy such requirements but for the fact that such other article is not subject to tax under this chapter. “(B) Proof.— Where a tire, tube, or receiving set has been sold free of tax under this paragraph, this paragraph shall cease to apply unless, within the 6month period which begins on the date of the sale by him (or, if earlier, on the date of the shipment by him), the manufacturer of such tire, tube, or receiving set receives proof that the other article referred to in clause (ii) of subparagraph (A) has been sold in a manner which satisfies the requirements of such clause (ii) (including in the case of a sale for export, proof of export of such other article). “(C) Subsection (a) (1) does not apply.— Paragraph (1) of subsection (a) shall not apply with respect to the tax imposed under section 4071 or 4141 on the sale of a tire, inner tube, or automobile radio or television receiving set. “(3) Musical instruments sold for religious use.— Under regulations prescribed by the Secretary or his delegate, the tax 26 USC 4151. imposed by section 4151 shall not apply to musical instruments sold to a religious institution for exclusively religious purposes. “(f) Sales of Mechanical Pencils and Pens for Export.— Under regulations prescribed by the Secretary or his delegate, mechanical pencils, fountain pens, and ball point pens subject to the 26 USC 4201. tax imposed by section 4201 may be sold by the manufacturer free of tax for export or for resale for export upon receipt by him of notice of intent to export or to resell for export. “SEC. 4222. REGISTRATION. “(a) General Rule.— Except as provided in subsection (b), section 4221 shall not apply with respect to the sale of any article unless the manufacturer, the first purchaser, and the second purchaser (if any) are all registered under this section. Registration under this section shall be made at such time, in such manner and form, and subject to such terms and conditions, as the Secretary or his delegate may by regulations prescribe. A registration under this section may be used only in accordance with regulations prescribed under this section. “(b) Exceptions.— “(1) Purchases by state and local governments.— Subsection (a) shall not apply to any State or local government in connection with the purchase by it of any article if such State or local government complies with such regulations relating to the use or exemption certificates in lieu of registration as the Secre- tary or his delegate shall prescribe to carry out the purpose of this paragraph. “(2) Export.— Subject to such regulations as the Secretary or his delegate may prescribe for the purpose of this paragraph, in the case of any sale or resale for export, the Secretary or his delegate may relieve the purchaser or the second purchaser, or both, from the requirement of registering under this section. “(3) Certain purchases and sales by the united states.— Subsection (a) shall apply to purchases and sales by the United States only to the extent provided by regulations prescribed by the Secretary or his delegate. “(4) Mechanical pencils, fountain pens, and ball point pens.— Subsection (a) shall not apply in the case of mechanical pencils, fountain pens, and ball point pens subject to the tax imposed by section 4201 sold by the manufacturer for export or for 26 USC 4201. resale for export. “(c) Revocation or Suspension of Registration.— Under regulations prescribed by the Secretary or his delegate, the registration of any person under this section may be revoked or suspended if the Secretary or his delegate determines— “(1) that such person has used such registration to avoid the payment of any tax imposed by this chapter, or to postpone or in any manner to interfere with the collection of any such tax, or “(2) that such revocation or suspension is necessary to protect the revenue. The revocation or suspension under this subsection shall be in addition to any penalty provided by law for any act or failure to act. “(d) Registration in the Case of Certain Other Exemptions.— The provisions of this section may be extended to, and made applicable with respect to, the exemptions provided by sections 4063 (b), 4083, 4093, and 4182 (b), and the exemptions authorized under section 4293 in respect of the taxes imposed by this chapter, to the extent 26 USC 4063, 4083, 4093, 4182, 4293. provided by regulations prescribed by the Secretary or his delegate. “(e) Definitions.— Terms used in this section which are defined in section 4221 (d) shall have the meaning given to them by section 4221 (d). “SEC. 4223. SPECIAL RULES RELATING TO FURTHER MANUFACTURE. “(a) Purchasing Manufacturer To Be Treated as the Manufacturer.— For purposes of this chapter, a manufacturer or producer to whom an article is sold or resold free of tax under section 4221 (a) (1) for use by him in further manufacture shall be treated as the manufacturer or producer of such article. “(b) Computation of Tax.— If the manufacturer or producer referred to in subsection (a) incurs liability for tax under this chapter on his sale or use of an article referred to in subsection (a) and the tax is based on the price for which the article is sold, the article shall be treated as having been sold by him— “(1) at the price for which the article was sold by him (or, where the tax is on his use of the article, at the price referred to in section 4218 (d)); or “(2) if he so elects and establishes such price to the satisfaction of the Secretary or his delegate— “(A) at the price for which the article was sold to him; or “(B) at the price for which the article was sold by the person who (without regard to subsection (a)) is the manufacturer, producer, or importer of such article. For purposes of this subsection, the price for which the article was sold shall be determined as provided in section 4216. For purposes of paragraph (2) no adjustment or readjustment shall be made in such price by reason of any discount, rebate, allowance, return or repossession of a container or covering, or otherwise. An election under paragraph (2) shall be made in the return reporting the tax applicable to the sale or use of the article, and may not be revoked. “SEC. 4224. EXEMPTION FOR ARTICLES TAXABLE AS JEWELRY. “No tax shall be imposed under this chapter on any article taxable under section 4001 (relating to jewelry tax). This section shall not apply to any clock or watch, or to any case or movement for a clock or watch, sold (1) as a part or accessory, or (2) on or in connection with or with the sale of any article. “SEC. 4225. EXEMPTION OF ARTICLES MANUFACTURED OR PRODUCED BY INDIANS. “No tax shall be imposed under this chapter on any article of native Indian handicraft manufactured or produced by Indians on Indian reservations, or in Indian schools, or by Indians under the jurisdiction of the United States Government in Alaska.”

2. 1965

   Excise Tax Reduction Act of 1965

   Pub. L. 89–44 § 208(e) · 79 Stat. 136

   Struck · 26 U.S.C. § 4222(b)(4)

   Pub. L. 89–44, § 208(e), struck out par. (4) which related to mechanical pencils, fountain pens, and ball point pens

   Source evidence

   Code amendment note
   Subsec. (b)(4). Pub. L. 89–44, § 208(e), struck out par. (4) which related to mechanical pencils, fountain pens, and ball point pens.

   Enacted provision · exact public law section
   (e) Section 4022 (relating to registration) is amended by striking out paragraph (4) of subsection (b).

3. 1965

   Excise Tax Reduction Act of 1965

   Pub. L. 89–44 § 802(c) · 79 Stat. 136

   Added · 26 U.S.C. § 4222(b)(5)

   Pub. L. 89–44, § 802(c), added par. (5)

   Source evidence

   Code amendment note
   Subsec. (b)(5). Pub. L. 89–44, § 802(c), added par. (5).

   Enacted provision · exact public law section
   (c) Exception to Registration in Case of Vessels and Aircraft.— Section 4222(b) (relating to exceptions to registration) is amended by 72 Stat. 1284. adding at the end thereof the following new paragraph: “(5) Supplies for vessels or aircraft.— Subsection (a) shall not apply to a sale of an article for use by the purchaser as supplies for any vessel or aircraft if such purchaser complies with such regulations relating to the use of exemption certificates in lieu of registration as the Secretary or his delegate shall prescribe to carry out the purpose of this paragraph.”

4. 1971

   Revenue Act of 1971

   Pub. L. 92–178 title IV § 401(a)(3)(B) · 85 Stat. 494

   Inserted · 26 U.S.C. § 4222(d)

   Pub. L. 92–178 inserted reference to section 4063(a)(6) and (7)

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 92–178 inserted reference to section 4063(a)(6) and (7).

   Enacted provision · exact public law section
   (B) Section 4222(d) (relating to registration in the case of certain exemptions) is amended by striking out “sections 4063(b),” and inserting in lieu thereof “sections 4063(a) (6) and (7), 4063(b),”.

5. 1976

   Pub. L. 94–455 title XIX § 1906(b)(13)(A) · 90 Stat. 1520

   Struck · 26 U.S.C. § 4222(a)(d)

   Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing

   Source evidence

   Code amendment note
   Subsecs. (a) to (d). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

   Enacted provision · exact public law section
   (A) The Internal Revenue Code of 1954, as amended by this Act, is amended by striking out “Secretary or his delegate” each place it appears and inserting in lieu thereof “Secretary”.

6. 1978

   Pub. L. 95–600 title VII § 701(ff)(2)(B) · 92 Stat. 2763

   Substituted · 26 U.S.C. § 4222(d)

   Pub. L. 95–600 substituted “4063(b), 4063(e),” for “4063(b),”

   Target inherited from the preceding amendment note.

   Source evidence

   Code amendment note
   Pub. L. 95–600 substituted “4063(b), 4063(e),” for “4063(b),”.

   Enacted provision · exact public law section
   (B) Section 4222(d) (relating to registration in the case of 26 USC 4222. 26 USC 4063. tax-free sales) is amended by inserting “4063(e),” after 26 USC 4063. “4063(b),”.

7. 1978

   Energy Tax Act of 1978

   Pub. L. 95–618 title II · 92 Stat. 3174

   Substituted · 26 U.S.C. § 4222(d)

   Pub. L. 95–618 substituted “4063(a)(7), 4063(b), 4064(b)(1)(C),” for “4063(a)(6) and (7), 4063(b),”

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 95–618 substituted “4063(a)(7), 4063(b), 4064(b)(1)(C),” for “4063(a)(6) and (7), 4063(b),”.

   Enacted provision · exact public law
   TITLE II— TRANSPORTATION PART I— GAS GUZZLER TAX SEC. 201. GAS GUZZLER TAX. (a) General Rule.— Part I of subchapter A of chapter 32 (relating to motor vehicle excise taxes) is amended by adding at the end thereof the following new section: “SEC. 4064. GAS GUZZLER TAX. “(a) Imposition of Tax.— There is hereby imposed on the sale by the manufacturer of each automobile a tax determined in accordance with the following tables: “(1) In the case of a 1980 model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 15 0  At least 14 but less than 15 $200  At least 13 but less than 14 300  Less than 13 550 “(2) In the case of a 1981 model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 17 0  At least 16 but less than 17 $200  At least 15 but less than 16 350  At least 13 but less than 14 550  Less than 13 650 “(3) In the case of a 1982 model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 18.5 0  At least 17.5 but less than 18.5 $200  At least 16.5 but less than 17.5 350  At least 15.5 but less than 16.5 550  At least 14.5 but less than 15.5 600  At least 13.5 but less than 14.5 750  At least 12.5 but less than 13.5 950  Less than 12.5 1, 200 “(4) In the case of a 1983 model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 19 0  At least 18 but less than 19 $350  At least 17 but less than 18 500  At least 16 but less than 17 650  At least 15 but less than 16 800  At least 14 but less than 15 1, 000  At least 13 but less than 14 1, 250  Less than 13 1, 550 “(5) In the case of a 1984 model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 19.5 0  At least 18.5 but less than 19.5 $450  At least 17.5 but less than 18.5 600  At least 16.5 but less than 17.5 750  At least 15.5 but less than 16.5 950  At least 14.5 but less than 15.5 1, 150  At least 13.5 but less than 14.5 1, 450  At least 12.5 but less than 13,5 1, 750  Less than 12.5 2, 150 “(6) In the case of a 1985 model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 21 0  At least 20 but less than 21 $500  At least 19 but less than 20 600  At least 18 but less than 19 800  At least 17 but less than 18 1, 100  At least 16 but less than 17 1, 200  At least 15 but less than 16 1, 500  At least 14 but less than 15 1, 800  At least 13 but less than 14 2, 200  Less than 13 2, 650 “(7) In the case of a 1986 or later model year automobile: “If the fuel economy of the model type in which the automobile falls is: The tax is:  At least 22.5 0  At least 21.5 but less than 22.5 $500  At least 20.5 but less than 21.5 650  At least 19.5 but less than 20.5 850  At least 18.5 but less than 19.5 1, 050  At least 17.5 but less than 18.5 1, 300  At least 16.5 but less than 17.5 1, 500  At least 15.5 but less than 16.5 1, 850  At least 14.5 but less than 15,5 2, 250  At least 13.5 but less than 14.5 2, 700  At least 12.5 but less than 13.5 3, 200  Less than 12.5 3, 850 “(b) Definitions.— For purposes of this section— “(1) Automobile.— “(A) In general.— The term ‘automobile’ means any 4-wheeled vehicle propelled by fuel— “(i) which is manufactured primarily for use on public streets, roads, and highways (except any vehicle operated exclusively on a rail or rails), and “(ii) which is rated at 6.000 pounds gross vehicle weight or less. “(B) Exception for certain vehicles.— The term ‘automobile’ does not include any vehicle which is treated as a nonpassenger automobile under the rules which were prescribed by the Secretary of Transportation for purposes of section 501 of the Motor Vehicle Information and Cost Savings Act (15 U.S.C. 2001) and which were in effect, on the date of the enactment of this section. “(C) Exception for emergency vehicles.— The term ‘automobile’ does not include any vehicle sold for use and used— “(i) as an ambulance or combination ambulance-hearse, “(ii) by the United States or by a State or local government for police or other law enforcement purposes, or “(iii) for other emergency uses prescribed by the Secretary by regulations. “(2) Fuel economy.— The term ‘fuel economy’ means the average number of miles traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed, as determined by the EPA Administrator in accordance with procedures established under subsection (c). “(3) Model type.— The term ‘model type.’ means a particular class of automobile as determined by regulation by the EPA Administrator. “(4) Model year.— The term ‘model year’, with reference to any specific calendar year, means a manufacturer’s annual production period (as determined by the EPA Administrator) which includes January 1 of such calendar year. If a manufacturer has no annual production period, the term ‘model year’ means the calendar year. “(5) Manufacturer.— The term ‘manufacturer’ includes a producer or importer. “(6) EPA administrator.— The term ‘EPA Administrator’ means the Administrator of the Environmental Protection Agency. “(7) Fuel.— The term ‘fuel’ means gasoline and diesel fuel. The Secretary (after consultation with the Secretary of Transportation) may, by regulation, include any product of petroleum or natural gas within the meaning of such term if he determines that such inclusion is consistent with the need of the Nation to conserve energy. “(c) Determination of Fuel Economy.— For purposes of this section— “(1) In general.— Fuel economy for any model type shall be measured in accordance with testing and calculation procedures established by the EPA Administrator by regulation. Procedures so established shall be the procedures utilized by the EPA Administrator for model year 1975 (weighted 55 percent urban cycle, and 45 percent highway cycle), or procedures which yield comparable results. Procedures under this subsection, to the extent practicable, shall require that fuel economy tests be conducted in conjunction with emissions tests conducted under section 206 of 42 USC 7540. the Clean Air Act. The EPA Administrator shall report any measurements of fuel economy to the Secretary. “(2) Special rule for fuels other than gasoline.— The EPA Administrator shall by regulation determine that quantity of any other fuel which is the equivalent of one gallon of gasoline. “(3) Time by which regulations must be issued.— Testing and calculation procedures applicable to a model year, and any amendment to such procedures (other than a technical or clerical amendment), shall be promulgated not less than 12 months before the model year to which such procedures apply. “(d) Special Rules for Small Manufacturers.— “(1) In general.— If, on the application of a small manufacturer, the Secretary determines that it is not. feasible for such manufacturer to meet the tax-free fuel economy level for the model year with respect to all automobiles produced by such manufacturer or with respect to a model type produced by such manufacturer, the Secretary may by regulation prescribe an alternate rate schedule for such model year for all automobiles produced by such manufacturer or for such model type, as the case may be. The alternate rate schedule shall be based on the maximum feasible fuel economy level which such manufacturer can meet for such model year with respect to all automobiles or with respect to such model type, as the case may be. “(2) Application to include necessary information.— An application under this subsection for any model year shall contain such information as the Secretary may by regulations prescribe. “(3) Determinations to be made only after consultation.— Determinations under paragraph (1) shall be made by the Secretary only after consultation with the Secretary of Energy, the Secretary of Transportation, and other appropriate Federal officers. “(4) Small manufacturer defined.— “(A) In general.— For purposes of this subsection, the term ‘small manufacturer’ means any manufacturer— “(i) who manufactured (whether or not in the United States) fewer than 10,000 automobiles in the second model year preceding the model year for which the determination under paragraph (1) is being made, and “(ii) who can reasonably be expected to manufacture (whether or not in the United States) fewer than 10,000 automobiles in the model year for which the determination under paragraph (1) is being made. “(B) Special rules.— For purposes of subparagraph (A)— “(i) Manufacturer of automobiles produced abroad determined without regard to importation.— The meaning of the term ‘manufacturer’ shall be determined without regard to subsection (b)(5). “(ii) Controlled groups.— Persons who are members of the same controlled group of corporations shall be treated as one manufacturer. For purposes of the preceding sentence, the term ‘controlled group of corporations’ has the meaning given to such term by section 1563(a); except that ‘more than 50 percent’ shall be substituted 26 USC 1563. for ‘at least 80 percent’ each place it appears in section 1563(a).” (b) Reduction in Basis of Automobile on Which Gas Guzzler Tax Was Imposed.— Section 1016 (relating to adjustments to basis) is 26 USC 1016. amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: “(d) Reduction in Basis of Automobile on Which Gas Guzzler Tax Was Imposed.—If— “(1) the taxpayer acquires any automobile with respect to which a tax was imposed by sect ion 4064, and Ante, p. 3180. “(2) the use of such automobile by the taxpayer begins not more than 1 year after the date of the first sale for ultimate use of such automobile, the basis of such automobile shall be reduced by the amount of the tax imposed by section 4064 with respect to such automobile. In the case of importation, if the date of entry or withdrawal from warehouse for consumption is later than the date of the first sale for ultimate use, such later date shall be substituted for the date of such first sale in the preceding sentence.” (c) Denial of Certain Exemptions and Refunds.— (1) Tax-free sales.— Subsection (a) of section 4221 (relating 26 USC 4221. to certain tax-free sales) is amended by adding at the end thereof the following new sentence: “Paragraphs (4) and (5) shall not apply to the tax imposed by section Ante, p. 3180. 26 USC 4293. 4064.” (2) United states and possessions.— Section 4293 (relating to exemption for United States and possessions) is amended by striking out “tax imposed by section 4121” and inserting in lieu thereof “taxes imposed by sections 4064 and 4121”. (3) Denial of refunds for certain uses.— Paragraph (2) of 26 USC 6416. section 6416(b) (relating to tax payments considered overpayments in the case of specified uses and resales) is amended by adding at the end thereof the following new sentence: “Subparagraphs (C) and (D) shall not apply in the case of any tax paid under section 4064”. (d) Payment of Tax in Case of Leased Automobiles.— Section 26 USC 4217. 4217 (relating to leases) is amended by adding at the end thereof the following new subsection: “(e) Leases of Automobiles Subject to Gas Guzzler Tax.— (1) In general.— In the case of the lease of an automobile the sale of which by the manufacturer would be taxable under section 4064, the foregoing provisions of this section shall not apply, but, for purposes of this chapter— “(A) the first lease of such automobile by the manufacturer shall be considered to be a sale, and “(B) any lease of such automobile by the manufacturer after the first lease of such automobile shall not be considered to be a sale. “(2) Payment of tax.— In the case of a lease described in paragraph (1)(A)— “(A) there shall be paid by the manufacturer on each lease payment that portion of the total gas guzzler tax which bears the same ratio to such total gas guzzler tax as such payment bears to the total amount to be paid under such lease, “(B) if such lease is canceled, or the automobile is sold or otherwise disposed of, before the total gas guzzler tax is payable, there shall be paid by the manufacturer on such cancellation, sale, or disposition the difference between the tax imposed under subparagraph (A) on the lease payments and the total gas guzzler tax, and “(C) if the automobile is sold or otherwise disposed of after the total gas guzzler tax is payable, no tax shall be imposed under section 4064 on such sale or disposition. “(3) Definitions.— For purposes of this subsection— “(A) Manufacturer.— The term ‘manufacturer’ includes a producer or importer. “(B) Total gas guzzler tax.— The term ‘total gas guzzler Ante, p. 3180. tax’ means the tax imposed by section 4064, computed at the rate in effect on the date of the first lease.” (e) Authority to Extend Registration System to Exemption of Emergency Vehicles.— Subsection (d) of section 4222 (relating to registration in the case of certain other exemptions) is amended by inserting “4064(b) (1) (C),” after “4063(b),”. (f) Clerical Amendment.— The table of sections for part I of subchapter A of chapter 32 is amended by adding at the end thereof the following new item: “Sec. 4064. Gas guzzler tax.” (g) 26 USC 4064 note.26 USC 4064. Effective Date.— The amendments made by this section shall apply with respect to 1980 and later model year automobiles (as defined in section 4064 (b) of the Internal Revenue Code of 1954). PART II— MOTOR FUELS SEC 221. EXEMPTION FROM MOTOR FUELS EXCISE TAXES FOR CERTAIN ALCOHOL FUELS. (a) Gasoline Mixed With Alcohol.— (1) In general.— Section 4081 (relating to imposition of tax 26 USC 4081. on gasoline) is amended by adding at the end thereof the following new subsection: “(c) Gasoline Mixed With Alcohol.— “(1) In general.— Under regulations prescribed by the Secretary, no tax shall be imposed by this section on the sale of any gasoline— “(A) in a mixture with alcohol, if at least 10 percent of the mixture is alcohol, or “(B) for use in producing a mixture at least 10 percent of which is alcohol. “(2) Later separation of gasoline.— If any person separates the gasoline from a mixture of gasoline and alcohol on which tax was not imposed by reason of this subsection, such person shall be treated as the producer of such gasoline. “(3) Alcohol defined.— For purposes of this subsection, the term ‘alcohol’ includes methanol and ethanol but does not include alcohol produced from petroleum, natural gas. or coal.” (2) Effective date.— The amendment made by paragraph (1) 26 USC 4081 note. shall apply to sales after December 31, 1978, and before October 1, 1984. (b) Alcohol Mixed With Special Fuel.— (1) In general.— Section 4041 (relating to imposition of tax 26 USC 4041. on special fuels) is amended by adding at the end thereof the following new subsection: “(k) Fuels Containing Alcohol.— “(1) In general.— Under regulations prescribed by the Secretary, no tax shall be imposed by this section on the sale or use of any liquid fuel at least 10 percent of which consists of alcohol (as denned by section 4081 (c) (3)). “(2) Later separation.— If any person separates the liquid fuel from a mixture of the liquid fuel and alcohol on which tax was not imposed by reason of this subsection, such separation shall be treated as a sale of the liquid fuel.” (2) Effective date.— The amendment made by paragraph (1) 26 USC 4041 note. shall apply to sales or use after December 31, 1978, and before October 1, 1984. (c) Reports.— (1) Annual report.— On April 1 of each year, beginning with April 1, 1980, and ending on April 1, 1984, the Secretary of Energy, in consultation with the Secretary of the Treasury and the Secretary of Transportation, shall submit to the Congress a report on the use of alcohol in fuel. The report shall include— (A) a description of the firms engaged in the alcohol fuel industry, (B) the amount of alcohol fuels sold in each State, and the amount of gasoline saved in each State by reason of the use of alcohol fuels, (C) the revenue loss resulting from the exemptions from tax for alcohol fuels under sections 4041 (k) and 4081(c) of the Internal Revenue Code of 1954, and 26 USC 4041, 4081. (D) the cost of production and the retail cost of alcohol fuels as compared to gasoline and special fuels before the imposition of any Federal excise taxes. (2) Report to Congress. Report.— The report submitted to the Congress on April 1, 1984, shall contain, in addition to the information required under paragraph (1), an analysis of the effect on the alcohol fuel industry of the termination of the exemption from excise taxes provided under sections 4041 (k) and 4081(c) of the Internal Revenue 26 USC 4041, 4081. 26 USC 4081 note. Code of 1954. (d) Expedition of Certain Ethanol Production Applications.— The Secretary of the Treasury shall expedite, to the maximum extent possible, action on the application of any person with respect to the production of ethanol for use in producing gasoline described in section 4081 (c) (or in producing liquid fuel described in section 4041 (k)) Legislative recommendations to congressional committees. of the Internal Revenue Code of 1954. Within 6 months after the date of the enactment of this Act, the Secretary shall furnish to the Committee on Finance, United States Senate, and to the Committee on Ways and Means, United States House of Representatives, recommendations for legislation necessary to provide for changes in the 26 USC 5001 et seq. provisions of chapter 51 of the Internal Revenue Code of 1954 to provide a simple, expeditious procedure for processing such applications and to simplify the regulation of such persons for purposes of such chapter consistent with adequate safeguards against the use of such applications to avoid or evade compliance with the provisions of such chapter relating to distilled spirits procured, dealt in, or used for other purposes. SEC. 222. DENIAL OF CREDIT OR REFUND FOR NONBUSINESS NON-HIGHWAY USE OF GASOLINE, SPECIAL MOTOR FUELS, AND LUBRICATING OIL. (a) In General.— (1) Gasoline.— (A) 26 USC 6421. So much of the first sentence of section 6421(a) (relating to nonhighway uses) as precedes “the Secretary” is amended to read as follows: “Except as provided in subsection (i), if gasoline is used in a qualified business use,”. (B) Subsection (d) of section 6421 (relating to definitions) is amended by adding at the end thereof the following new paragraph: “(3) Qualified business use.— “(A) In general.— The term ‘qualified business use’ means any use by a person in a trade or business of such person or in an activity of such person described in section 212 (relating to production of income) otherwise than as a fuel in a highway vehicle— “(i) which (at the time of such use), is registered, or is required to be registered, for highway use under the laws of any State or foreign country, or “(ii) which, in the case of a highway vehicle owned by the United States, is used on the highway. “(B) Exception for use in motorboats.— The term ‘qualified business use’ does not include any use in a motorboat. “(C) Commercial fishing vessels.— For provisions exempting from tax gasoline, special motor fuels, and lubricating oil used for commercial fishing vessels, see— “(i) 26 USC 4221. subsections (a)(3) and (d)(3) of section 4221 (relating to certain tax-free sales), “(ii) section 6416(b)(2)(B) (relating to refund or 26 USC 6416. credit in case of certain uses), and “(iii) section 4041(g)(1) (relating to exemptions 26 USC 4041. from tax on special fuels).” (2) Special motor fuels.— Subsection (b) of section 4041 (relating to special motor fuels) is amended by striking out the second and third sentences and inserting in lieu thereof the following: “In the case of a liquid taxable under this subsection sold for use, or used, in a qualified business use, the tax imposed by paragraph (1) or by paragraph (2) shall be 2 cents a gallon. If a liquid on which tax was imposed by paragraph (1) at the rate of 2 cents a gallon by reason of the preceding sentence is used otherwise than in a qualified business use, a tax of 2 cents a gallon shall be imposed under paragraph (2). For purposes of this subsection, the term ‘qualified business use’ has the meaning given to such term by section 6421 (d) (3).” 26 USC 6421. 26 USC 6424. (3) Lubricating oil.— Subsection (a) of section 6424 (relating to lubricating oil not used in highway motor vehicles) is amended by striking out “is used otherwise than in a highway motor vehicle” and inserting in lieu thereof “is used in a qualified business use (within the meaning of section 6421(d) (3))”. (b) Effective Date.— The amendments made by subsection (a) 26 USC 4041 note. shall apply with respect to uses after December 31, 1978. PART III— PROVISIONS RELATED TO BUSES SEC. 231. REMOVAL OF EXCISE TAX ON BUSES. (a) General Rule.— Paragraph (6) of section 4063(a) (relating 26 USC 4063. to exemption for local transit buses) is amended to read as follows: “(6) Buses.— The tax imposed under section 4061(a) shall not 26 USC 4061. apply in the case of any automobile bus chassis or automobile bus body.” s (b) Floor Stocks Refunds.— (1) In general.— Where, before the day after the date of the enactment of this Act, any tax-repealed article (as defined in subsection (e)) has been sold by the manufacturer, producer, or importer and on such day is held by a dealer and has not been used and is intended for sale, there shall be credited or refunded (without interest) to the manufacturer, producer, or importer an amount equal to the tax paid by such manufacturer, producer, or importer on his sale of the article, if— (A) claim for such credit or refund is filed with the Secretary of the Treasury before the first day of the 10th calendar month beginning after the day after the date of the enactment of this Act based upon a request submitted to the manufacturer, producer, or importer before the first day of the 7th calendar month beginning after the day after the date of the enactment of this Act by the dealer who held the article in respect of which the credit or refunds is claimed; and (B) on or before the first day of such 10th calendar month reimbursement has been made to the dealer by the manufacturer, producer, or importer in an amount equal to the tax paid on the article or written consent has been obtained from the dealer to allowance of the credit or refund. (2) Limitation on eligibility for credit or refund.— No manufacturer, producer, or importer shall be entitled to credit or refund under paragraph (1) unless he has in his possession such evidence of the inventories with respect to which the credit or refund is claimed as may be required by regulations prescribed by the Secretary of the Treasury under this subsection. (3) Other laws applicable.— All provisions of law, including ties, applicable with respect to the taxes imposed by section 26 USC 4061. 4061(a) of the Internal Revenue Code of 1954 shall, insofar as applicable and not inconsistent with paragraphs (1) and (2) of this subsection, apply in respect of the credits and refunds provided for in paragraph (1) to the same extent as if the credits or refunds constituted overpayments of the tax. (c) Refunds With Respect to Certain Consumer Purchases.— (1) In general.— Except as otherwise provided in paragraph (2), where on or after April 20, 1977, and on or before the date of the enactment of this Act, a tax-repealed article (as defined in subsection (e)) has been sold to an ultimate purchaser, there shall be credited or refunded (without interest) to the manufacturer, producer, or importer of such article an amount equal to the tax paid by such manufacturer, producer, or importer on his sale of the article. (2) Limitation on eligibility for credit or refund.— No manufacturer, producer, or importer shall be entitled to a credit or refund under paragraph (1) with respect to an article unless— (A) he has in his possession such evidence of the sale of the article to an ultimate purchaser, and of the reimbursement of the tax to such purchaser, as may be required by regulations prescribed by the Secretary of the Treasury under this subsection; (B) claim for such credit or refund is filed with the Secretary of the Treasury before the first day of the 10th calendar month beginning after the day after the date of the enactment of this Act based upon information submitted to the manufacturer, producer, or importer before the first day of the 7th calendar month beginning after the day after the date of the enactment of this Act by the person who sold the article (in respect of which the credit or refund is claimed) to the ultimate purchaser; and (C) on or before the first day of such 10th calendar month reimbursement has been made to the ultimate purchaser in an amount equal to the tax paid on the article. (3) Other laws applicable.— All provisions of laws, including penalties, applicable with respect to the taxes imposed by section 4061(a) of such Code shall, insofar as applicable and not inconsistent with paragraph (1) or (2) of this subsection, apply with respect to the. credits and refunds provided for in paragraph (1) to the same extent as if the credits or refunds constituted overpayment of the tax. (d) Certain Uses by Manufacturer, Etc.— Any tax paid by reason 26 USC 4218. of section 4218(a) of such Code (relating to use by manufacturer or importer considered sale) on any tax-repealed article shall be deemed an overpayment of such tax if the tax was imposed on such article by reason of such section 4218(a) on or after April 20, 1977. (e) Definitions.— For purposes of this section— (1) The term “dealer” includes a wholesaler, jobber, distributor, or retailer. (2) An article shall be considered as “held by a dealer” if title thereto has passed to such dealer (whether or not delivery to him has been made) and if, for purposes of consumption, title to such article or possession thereof has not at any time been transferred to any person other than a dealer. (3) The term “tax-repealed article” means an article on which a tax was imposed by section 4061 (a) of such Code (as in effect on 26 USC 4061. the day before the date of the enactment of this Act) and which is exempted from such tax by paragraph (6) of section 4063(a) of such Code (as amended by subsection (a) of this section). 26 USC 4063. (f) Technical and Conforming Amendments.— (1) The heading for paragraph (1) of section 6412(a) (relating 26 USC 6412. to floor stocks refunds) is amended by striking out “and buses”. (2) Subsection (d) of section 4222 (relating to registration in 26 USC 4222. case of certain other exemptions) is amended by striking out “4063(a) (6) or (7)” and inserting in lieu thereof “4063(a) (7)”. (g) Effective Date.— (1) The amendments made by subsections (a) and (f) shall apply with respect to articles sold after the date of the enactment of this Act. (2) For purposes of paragraph (1), an article shall not be considered sold on or before the date of the enactment of this Act unless possession or right to possession passes to the purchaser on or before such date. (3) In the case of— (A) a lease, (B) a contract for the sale of an article providing that the price shall be paid by installments and title to the article sold does not pass until a future date notwithstanding partial payment by installments, (C) a conditional sale, or (D) a chattel mortgage arrangement providing that the sale price shall be paid in installments, entered into on or before the date of the enactment of this Act, payments made after such date with respect to the article leased or sold shall, for purposes of this subsection, be considered as payments made with respect to an article sold after such date, if the lessor or vendor establishes that the amount of payments payable after such date with respect to such article has been reduced by an amount equal to that portion of the tax applicable with respect to the lease or sale of such article which is due and payable after such date. If the lessor or vendor does not establish that the payments have been so reduced, they shall be treated as payments made in respect of an article sold on or before the date of the enactment of this Act. SEC. 232. REMOVAL OF EXCISE TAX ON BUS PARTS. (a) Exempt Sales.— Subsection (e) of section 4221 (relating to 26 USC 4221. special rules for certain tax-free sales) is amended by adding at the end thereof the following new paragraph: “(6) Bus parts and accessories.— Under regulations prescribed by the Secretary, the tax imposed by section 4061(b) shall not apply to any part or accessory which is sold for use by the purchaser on or in connection with an automobile bus.” (b) Refund for Certain Sales of Bus Parts.— Subparagraph (I) of section 6416(b)(2) (relating to refund for specified uses and resales) is amended to read as follows: “(I) in the case of any article taxable under section 4061 (b), sold for use by the purchaser on or in connection with an automobile bus;”. (c) 26 USC 4221 note. Effective Date.— The amendments made by this section shall apply to sales on or after the first day of the first calendar month beginning more than 10 days after the date of the enactment of this Act. SEC. 233. REMOVAL OF EXCISE TAX ON FUEL, OIL, AND TIRES USED IN CONNECTION WITH INTERCITY, LOCAL, AND SCHOOL BUSES. (a) Repayment of Tax on Gasoline and Other Motor Fuels Used by Intercity, Local, or School Buses.— (1) 26 USC 6421. Gasoline.— Subsection (b) of section 6421 (relating to local transit systems) is amended to read as follows: “(b) Intercity, Local, or School Buses.— “(1) Allowance.— Except as provided in paragraph (2) and subsection (i), if gasoline is used in an automobile bus while engaged in— “(A) furnishing (for compensation) passenger land transportation available to the general public, or “(B) the transportation of students and employees of 26 USC 4221. schools (as defined in the last sentence of section 4221 (d) (7) (C)), the Secretary shall pay (without interest) to the ultimate purchaser of such gasoline an amount equal to the product of the number of gallons of gasoline so used multiplied by the rate at 26 USC 4081. which tax was imposed on such gasoline by section 4081. “(2) Limitation in case of nonscheduled intercity or local buses.— Paragraph (1) (A) shall not apply in respect of gasoline used in any automobile bus while engaged in furnishing transportation which is not scheduled and not along regular routes unless the seating capacity of such bus is at least 20 adults (not including the driver).” (2) 26 USC 6427. Other fuels.— Subsection (b) of section 6427 (relating to local transit systems) is amended to read as follows: “(b) Intercity, Local, or School Buses.— “(1) Allowance.— Except as provided in paragraph (2) and subsection (g), if any fuel on the sale of which tax was imposed 26 USC 4041. by subsection (a) or (b) of section 4041 is used in an automobile bus while engaged in— “(A) furnishing (for compensation) passenger land transportation available to the general public, or “(B) the transportation of students and employees of schools (as defined in the last sentence of section 4221(d) (7)(C)), the Secretary shall pay (without interest) to the ultimate purchaser of such fuel an amount equal to the product of the number of gallons of such fuel so used multiplied by the rate at which tax was imposed on such fuel by subsection (a) or (b) of section 4041. “(2) Limitation in case of nonscheduled intercity or local buses.— Paragraph (1) (A) shall not apply in respect of fuel used in any automobile bus while engaged in furnishing transportation which is not scheduled and not along regular routes unless the seating capacity of such bus is at least 20 adults (not including the driver).” (3) Technical amendments.— (A) 26 USC 6421. Subsection (d) of section 6421 is amended— (i) by striking out paragraph (2), and (ii) by redesignating paragraph (3) (as added by Ante, p. 3186. section 222(a) (1) (B)) as paragraph (2). (B) The last sentence of section 4041(b) (as added by 26 USC 4041. section 222(a)(2)) is amended by striking out “6421(d) (3)” and inserting in lieu thereof “6421(d) (2)”. (C) Subsection (c) of section 4483 is amended by inserting 26 USC 4483. “(as m effect on the day before the date of the enactment of the Energy Tax Act of 1978)” after “section 6421(b)(2)”. (b) Repayment of Tax on Lubricating Oil Used in Intercity, Local, or School Buses.— (1) In general.— Subsection (a) of section 6424 (relating to 26 USC 6424. lubricating oil not used in highway motor vehicles) is amended to read as follows: “(a) Payments.— Except as provided in subsection (f), if lubricating oil (other than cutting oils, as defined in section 4092(b), and 26 USC 4092. other than oil which has previously been used) is used— (1) in a qualified business use (as defined in section 6421(d) 26 USC 6421. (2)), or “(2) in a qualified bus (as defined in section 4221(d) (7)), 26 USC 4221. the Secretary shall pay (without interest) to the ultimate purchaser of such lubricating oil an amount equal to 6 cents for each gallon of lubricating oil so used.” (3) Technical and conforming amendments.— (A) The section heading for section 6424 is amended by 26 USC 6424. striking out “NOT USED IN HIGHWAY MOTOR VEHICLES” and inserting in lieu thereof “USED FOR CERTAIN NONTAXABLE PURPOSES”. (B) The table of sections for subchapter B of chapter 65 26 USC 6411. (relating to rules of special application) is amended by striking out “not used In highway motor vehicles” in the item relating to section 6424 and inserting in lieu thereof “used for certain nontaxable purposes”. (C) Paragraph (3) of section 39(a) (relating to certain 26 USC 39. uses of gasoline, special fuels, and lubricating oil) is amended by striking out “otherwise than in a highway motor vehicle” and inserting in lieu thereof “for certain nontaxable purposes”. (D) Sections 6504(9) and 6675(a) are each amended by 26 USC 6504, 6675. striking out “not used in highway motor vehicles” and inserting in lieu thereof “used for certain nontaxable purposes”. (E) Paragraph (3) of section 209(f) of the Highway Revenue 23 USC 120 note. Act of 1956 is amended by striking out “lubricating oil not used in highway motor vehicles” and inserting in lieu thereof “lubricating oil used for certain nontaxable purposes”. (c) Tires, Tubes, and Tread Rubber.— (1) In general.— Paragraph (5) of section 4221 (e) (relating 26 USC 4221. to school buses) is amended to read as follows: “(5) Tires, tubes, and tread rubber used on intercity, local, and school buses.— Under regulations prescribed by the Secretary— “(A) the taxes imposed by paragraphs (1) and (3) of section 4071(a) shall not apply in the case of tires or inner 26 USC 4071. tubes for tires sold for use by the purchaser on or in connection with a qualified bus. and “(B) the tax imposed by paragraph (4) of section 4071 (a) shall not apply in the case of tread rubber sold for use by the purchaser in the recapping or retreading of any tire to be used by the purchaser on or in connection with a qualified bus.” (2) 26 USC 4221. Qualified bus defined.— Subsection (d) of section 4221 (relating to definitions) is amended by adding at the end thereof the following new paragraph: “(7) Qualified bus.— “(A) In general.— The term ‘qualified bus’ means— “(i) an intercity or local bus, and “(ii) a school bus. “(B) Intercity or local bus.— The term ‘intercity or local bus’ means any automobile bus which is used predominantly in furnishing (for compensation) passenger land transportation available to the general public if— “(i) such transportation is scheduled and along regular routes, or “(ii) the seating capacity of such bus is at least 20 adults (not including the driver). “(C) School bus.— The term ‘school bus’ means any auto-mobile bus substantially all the use of which is in transporting students and employees of schools. For purposes of the preceding sentence, the term ‘school’ means an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are carried on.” (3) 26 USC 6416. Technical amendment.— Paragraph (2) of section 6416 (b) (relating to specified uses and resales) is amended by striking out the period at the end of subparagraph (K) and inserting in lieu thereof a semicolon and by inserting after subparagraph (K) the following new subparagraphs: “(L) in the case of any tire or inner tube taxable under 26 USC 4071. paragraph (1) or (3) of section 4071(a), sold to any person for use as described in section 4221 (e) (5) (A); or “(M) in the case of tread rubber taxable under paragraph (4) of section 4071(a), used in the recapping or retreading of a tire sold to any person for use on or in connection with a qualified bus (as defined in section 4221(d) (7)).” (d) 26 USC 39 note. Effective Date.— The amendments made by this section shall take effect on the first day of the first calendar month which begins more than 10 days after the date of the enactment of this Act. PART IV— INCENTIVES FOR VAN POOLING SEC. 241. FULL INVESTMENT CREDIT FOR CERTAIN COMMUTER VEHICLES. (a) 26 USC 46. In General.— Subsection (c) of section 46 (relating to qualified investment) is amended by adding at the end thereof the following new paragraph: “(6) Special rule for commuter highway vehicles.— “(A) In general.— Notwithstanding paragraph (2), in the case of a commuter highway vehicle the useful life of which is 3 years or more, the applicable percentage for purposes of paragraph (1) shall be 100 percent. “(B) Definition of commuter highway vehicle.— For purposes of subparagraph (A), the term ‘commuter highway vehicle’ means a highway vehicle— “(i) the seating capacity of which is at least 8 adults (not including the driver), “(ii) at least 80 percent of the mileage use of which can reasonably be expected to be (I) for purposes of transporting the taxpayer’s employees between their residences and their place of employment, and (II) on trips during which the number of employees transported for such purposes is at least one-half of the adult seating capacity of such vehicle (not including the driver), “(iii) which is acquired by the taxpayer on or after the date of the enactment of the Energy Tax Act of 1978, and placed in service by the taxpayer before Ante, p. 3174. January 1, 1986, and “(iv) with respect to which the taxpayer makes an election under this paragraph on his return for the taxable year in which such vehicle is placed in service.” (b) Amendments of the Recapture Rules.— (1) Subsection (a) of section 47 (relating to recapture in case 26 USC 47. of certain dispositions, etc., of section 38 property) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: “(4) Special rules for commuter highway vehicles.— “(A) Useful life.— For purposes of this subsection, 3 years shall be treated as the useful life which was taken into account in computing the credit under section 38 with respect 26 USC 38. to any commuter highway vehicle (as defined in section 46 (c)(6)(B)). Ante, p. 3192. “(B) Change in use.— If less than 80 percent of the mileage use of any commuter highway vehicle by the taxpayer during that portion of any taxable year which is within the first 36 months of the operation of such vehicle by the tax-payer meets the requirements of section 46(c)(6) (B), then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from treating such vehicle, for purposes of determining qualified investment, as not being a commuter highway vehicle. If the application of this subparagraph to any property is followed by the application of paragraph (1) to such property, proper adjustment shall be made in applying paragraph (1).” (2) Paragraph (5) of section 47(a) (as redesignated by subparagraph (A)) is amended by striking out “paragraph (2)” and inserting in lieu thereof “paragraph (2) or (4)”. (3) Subparagraph (B) of section 47 (a) (6) is amended by striking out “paragraph (4)” and inserting in lieu thereof “paragraph (5)”. SEC. 242. EXCLUSION FROM GROSS INCOME OF VALUE OF QUALIFIED TRANSPORTATION PROVIDED BY EMPLOYER. (a) In General.— Part III of subchapter B of chapter 1 (relating 26 USC 101. to items specifically excluded from gross income) is amended by redesignating section 124 as 125, and by inserting after section 123 the 26 USC 124, 125. following new section: “SEC. 124. QUALIFIED TRANSPORTATION PROVIDED BY EMPLOYER. “(a) General Rule.— Gross income of an employee does not include the value of qualified transportation provided by the employer between the employee’s residence and place of employment. “(b) Qualified Transportation.— For purposes of this section, the term ‘qualified transportation’ means transportation in a commuter Ante, p. 3192. highway vehicle (as defined in section 46(c)(6)(B) but without regard to clause (iii) or (iv) thereof). “(c) Additional Requirements.— Subsection (a) does not apply to the value of transportation provided by an employer unless— “(1) such transportation is provided under a separate written plan of the employer which does not discriminate in favor of employees who are officers, shareholders, or highly compensated employees, and “(2) the plan provides that the value of such transportation is provided in addition to (and not in lieu of) any compensation otherwise payable to the employee. “(d) Definitions.— For purposes of this section— “(1) Provided by the employer.— Transportation shall be considered to be provided by an employer if the transportation is furnished in a commuter highway vehicle (described in subsection (b)) operated by or for the employer. “(2) Employee.— The term ‘employee’ does not include an individual 26 USC 401. who is an employee (within the meaning of section 401 (c)(1)). “(e) Effective Date.— Subsection (a) applies with respect to qualified transportation provided in taxable years beginning after December 31, 1978, and before January 1, 1986”. (b) Clerical Amendment.— The table of sections for such part is amended by striking out the last item and inserting in lieu thereof the following: “Sec. 124. Qualified transportation provided by employer. “Sec. 125. Cross references to other Acts.” (c) 26 USC 124 note.Supra. Transition Role.— The plan requirements of section 124(c) of Internal Revenue Code of 19.54 shall be considered to be met with respect to transportation provided before July 1, 1979, if there is a plan meeting such requirements of the employer in effect on that date.

8. 1983

   Surface Transportation Assistance Act of 1982

   Pub. L. 97–424 title V § 515(b)(2) · 96 Stat. 2097

   Struck · 26 U.S.C. § 4222(d)

   Pub. L. 97–424 struck out “4093,” after “4083,”

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 97–424 struck out “4093,” after “4083,”.

   Enacted provision · exact public law section
   (2) Subsection (d) of section 4222 is amended by striking out 26 USC 4222. “4093,”.

9. 1984

   Tax Reform Act of 1984

   Pub. L. 98–369 div. A title VII § 735(c)(9) · 98 Stat. 494

   Substituted · 26 U.S.C. § 4222(d)

   Pub. L. 98–369 substituted “4053(a)(6)” for “4063(a)(7), 4063(b), 4063(e)”

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 98–369 substituted “4053(a)(6)” for “4063(a)(7), 4063(b), 4063(e)”.

   Enacted provision · exact public law section
   (9) Subsection (d) of section 4222 is amended by striking out 26 USC 4222. “4063(a)(7), 4063(b), 4063(e),” and inserting in lieu thereof “4053(a)(6),”.

10. 1988

    Technical and Miscellaneous Revenue Act of 1988

    Pub. L. 100–647 title I § 1017(c)(16) · 102 Stat. 3342

    Substituted · 26 U.S.C. § 4222(d)

    Pub. L. 100–647 substituted “4101” for “4083”

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 100–647 substituted “4101” for “4083”.

    Enacted provision · exact public law section
    (16) Section 4222(d) of the 1986 Code is amended by striking out “4083” and inserting in lieu thereof “4101”.

11. 1990

    Revenue Reconciliation Act of 1990

    Pub. L. 101–508 § 11212(b)(2) · 104 Stat. 1388

    1. Substituted · 26 U.S.C. § 4222(c)

       Pub. L. 101–508, § 11212(b)(2), substituted “Denial, revocation, or suspension” for “Revocation or suspension” in par. (2) and concluding provisions

    2. Substituted · 26 U.S.C. § 4222(c)

       Pub. L. 101–508, § 11212(b)(2), substituted “denied, revoked, or suspended” for “revoked or suspended” in par. (2) and concluding provisions

    3. Substituted · 26 U.S.C. § 4222(c)

       Pub. L. 101–508, § 11212(b)(2), substituted “denial, revocation, or suspension” for “revocation or suspension” in par. (2) and concluding provisions

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 101–508, § 11212(b)(2), substituted “Denial, revocation, or suspension” for “Revocation or suspension” in heading, “denied, revoked, or suspended” for “revoked or suspended” in introductory provisions, and “denial, revocation, or suspension” for “revocation or suspension” in par. (2) and concluding provisions.

    Enacted provision · exact public law section
    (2) Clarification of general registration rules.— subsection (c) of section 4222 is amended— (A) by striking “revoked or suspended” in the material preceding paragraph (1) and inserting “denied, revoked, or suspended”, (B) by striking “revocation or suspension” each place it appears and inserting “denial, revocation, or suspension”, and (C) by striking in the heading “Revocation or Suspension” and inserting “Denial, Revocation, or Suspension”.

12. 1990

    Revenue Reconciliation Act of 1990

    Pub. L. 101–508 § 11221(d)(3) · 104 Stat. 1388

    Substituted · 26 U.S.C. § 4222(d)

    Pub. L. 101–508, § 11221(d)(3), substituted “sections 4001(c), 4002(b), 4003(c), 4004(a), 4053(a)(6)” for “sections 4053(a)(6)”

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 101–508, § 11221(d)(3), substituted “sections 4001(c), 4002(b), 4003(c), 4004(a), 4053(a)(6)” for “sections 4053(a)(6)”.

    Enacted provision · exact public law section
    (3) Subsection (d) of section 4222 is amended by striking “sections 4053(a)(6)” and inserting “sections 4001(c), 4002(b), 4003(c), 4004(a), 4053(a)(6)”.

13. 1993

    Revenue Reconciliation Act of 1993

    Pub. L. 103–66 title XIII § 13161(b)(2) · 107 Stat. 312

    Substituted · 26 U.S.C. § 4222(d)

    Pub. L. 103–66 substituted “4001(d)” for “4002(b), 4003(c), 4004(a)”

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 103–66 substituted “4001(d)” for “4002(b), 4003(c), 4004(a)”.

    Enacted provision · exact public law section
    (2) Subsection (d) of section 4222 is amended by striking “4002(b), 4003(c), 4004(a)” and inserting “4001(d)”.

14. 1997

    Pub. L. 105–34 title XIV § 1431(a) · 111 Stat. 788

    1. Substituted · 26 U.S.C. § 4222(b)(2)

       Pub. L. 105–34 substituted “Under regulations” for “Export” in heading

    2. Struck · 26 U.S.C. § 4222(b)(2)

       Pub. L. 105–34 struck out “in the case of any sale or resale for export,” after “this paragraph,” in text

    Source evidence

    Code amendment note
    Subsec. (b)(2). Pub. L. 105–34 substituted “Under regulations” for “Export” in heading and struck out “in the case of any sale or resale for export,” after “this paragraph,” in text.

    Enacted provision · exact public law section
    (a) In General.— Section 4222(b)(2) (relating to export) is amended— (1) by striking “in the case of any sale or resale for export,”, and (2) by striking “Export” and inserting “Under Regulations”.

15. 1998

    Internal Revenue Service Restructuring and Reform Act of 1998

    Pub. L. 105–206 title VI § 6023(17) · 112 Stat. 685

    Substituted · 26 U.S.C. § 4222(d)

    Pub. L. 105–206 substituted “4053(6)” for “4053(a)(6)”

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 105–206 substituted “4053(6)” for “4053(a)(6)”.

    Enacted provision · exact public law section
    (17) Sections 4221(c) and 4222(d) of the 1986 Code are each amended by striking “4053(a)(6)” and inserting “4053(6)”.

16. 2014

    Tax Technical Corrections Act of 2014

    Pub. L. 113–295 div. A title II § 221(a)(103)(B)(ii) · 128 Stat. 4010

    Struck · 26 U.S.C. § 4222(d)

    Pub. L. 113–295 struck out “4001(c), 4001(d),” after “provided by sections”

    Source evidence

    Code amendment note
    Subsec. (d). Pub. L. 113–295 struck out “4001(c), 4001(d),” after “provided by sections”.

    Enacted provision · exact public law section
    (ii) Section 4222 26 USC 4222. is amended by striking “4001(c), 4001(d),”.

    Effective date note
    Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

18 of 19 references resolved to an enrolled provision · 1 partial