Bloomberg Bloomberg
Comprehensive Tax Research. Practitioner to Practitioner. ®

Internal Revenue Code, § 4001. Imposition Of Tax [Repealed]

Editor's Note: Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), struck Sec. 4001, effective December 19, 2014.
I.R.C. § 4001(a) Imposition Of Tax
I.R.C. § 4001(a)(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.
I.R.C. § 4001(a)(2) Applicable Amount
I.R.C. § 4001(a)(2)(A) In General
Except as provided in subparagraphs (B) and (C), the applicable amount is $30,000.
I.R.C. § 4001(a)(2)(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.R.C. § 4001(a)(2)(B)(i)
the dollar amount in effect under subparagraph (A), plus
I.R.C. § 4001(a)(2)(B)(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.
I.R.C. § 4001(a)(2)(C) Purpose Built Passenger Vehicle
I.R.C. § 4001(a)(2)(C)(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).
I.R.C. § 4001(a)(2)(C)(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.
I.R.C. § 4001(b) Passenger Vehicle
I.R.C. § 4001(b)(1) In General
For purposes of this subchapter, the term “passenger vehicle” means any 4-wheeled vehicle—
I.R.C. § 4001(b)(1)(A)
which is manufactured primarily for use on public streets, roads, and highways, and
I.R.C. § 4001(b)(1)(B)
which is rated at 6,000 pounds unloaded gross vehicle weight or less.
I.R.C. § 4001(b)(2) Special Rules
I.R.C. § 4001(b)(2)(A) Trucks And Vans
In case of a truck or van, paragraph (1)(B) shall be applied by substituting “gross vehicle weight” for “unloaded gross vehicle weight”.
I.R.C. § 4001(b)(2)(B) Limousines
In the case of a limousine, paragraph (1) shall be applied without regard to subparagraph (B) thereof.
I.R.C. § 4001(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.
I.R.C. § 4001(d) Exemption For Law Enforcement Uses, Etc.
No tax shall be imposed by this section on the sale of any passenger vehicle—
I.R.C. § 4001(d)(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
I.R.C. § 4001(d)(2)
to any person for use exclusively in providing emergency medical services.
I.R.C. § 4001(e) Inflation Adjustment
I.R.C. § 4001(e)(1) In General
The $30,000 amount in subsection (a) shall be increased by an amount equal to—
I.R.C. § 4001(e)(1)(A)
$30,000 multiplied by
I.R.C. § 4001(e)(1)(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.
I.R.C. § 4001(e)(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.
I.R.C. § 4001(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’ the percentage, each place it appears, 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
I.R.C. § 4001(g) Termination
The taxes imposed by this section and section 4003 shall not apply to any sale, use, or installation after December 31, 2002.
(Added by Pub. L. 101-508, title XI, Sec. 11221(a), Nov. 5, 1990, 104 Stat. 1388-439; amended by Pub. L. 103-66, Sec. 13161(a), Aug. 10, 1993; Pub. L. 104-188, title I, Sec. 1607, 1703(c)(1), Aug. 20, 1996, 110 Stat. 1755; Pub. L. 105-34, title IX, XVI, Sec. 906, 1601(f)(3)(A), 1601(f)(3)(B), Aug. 5, 1997, 111 Stat 788; repealed by Pub. L. 113-295, Div. A, title II, Sec. 221(a)(103)(A), Dec. 19, 2014, 128 Stat. 4010.)
BACKGROUND NOTES
Amendments to Subtitle
1988--Pub. L. 100-418, title I, 1941(b)(3)(A), Aug. 23, 1988, 102 Stat. 1324, struck out item for chapter 45 “Windfall profit tax on domestic crude oil”.
1987--Pub. L. 100-203, title X, 10712(c)(8), Dec. 22, 1987, 101 Stat. 1330-467, substituted “and certain other tax-exempt organizations” for “black lung benefit trusts” in item for chapter 42.
1986--Pub. L. 99-509, title IX, 9319(d)(2), Oct. 21, 1986, 100 Stat. 2012, added item for chapter 47.
1984--Pub. L. 98-369, div. A, title I, 67(d)(2), July 18, 1984, 98 Stat. 587, added item for chapter 46.
1983--Pub. L. 97-424, title V, 512(b)(2)(B), Jan. 6, 1983, 96 Stat. 2177, substituted “Retail excise taxes” for “Special fuels” in item for chapter 31.
1982--Pub. L. 97-248, title III, 310(b)(4)(B), Sept. 3, 1982, 96 Stat. 598, added item for chapter 39.
1980--Pub. L. 96-510, title II, 211(b), Dec. 11, 1980, 94 Stat. 2801, added item for chapter 38.
Pub. L. 96-223, 101(a)(2), Apr. 2, 1980, 94 Stat. 250, added item for chapter 45.
1978--Pub. L. 95-227, 4(c)(2)(C), Feb. 10, 1978, 92 Stat. 22, inserted “,black lung benefit trusts” after “foundations” in item for chapter 42.
1976--Pub. L. 94-455, title XIII, 1307(d)(3)(A), title XVI, 1605(c), title XIX, 1904(b)(7)(E), (10)(G), 1952(n)(6), Oct. 4, 1976, 90 Stat. 1728, 1755, 1815, 1818, 1846, substituted “41. Public charities” for “41. Interest equalization tax” added item for chapter 44 and struck out items for chapters “38. Import taxes” and “39. Regulatory taxes”.
1974--Pub. L. 93-406, title II, 1016(b)(2), Sept. 2, 1974, 88 Stat. 932, added item for chapter 43.
1969--Pub. L. 91-172, title I, 101(j)(59), Dec. 30, 1969, 83 Stat. 532, added item for chapter 42.
1964--Pub. L. 88-563, 2(b), Sept. 2, 1964, 78 Stat. 841, added item for chapter 41.
Prior Provisions
The provisions of a prior chapter 31, Miscellaneous Excise Taxes, were set out as:
Subchapter (A), Jewelry and related items, comprising sections 4001 to 4003;
Subchapter (B), Furs, comprising sections 4011 to 4013;
Subchapter (C), Toilet preparations, comprising sections 4021 and 4022;
Subchapter (D), Luggage, handbags, etc., comprising section 4031;
Subchapter (E), Special fuels, comprising sections 4041 and 4042; and
Subchapter (F), Special provisions applicable to retailers tax, comprising sections 4051 to 4058.
The headings for subchs. (A) to (D) were struck out by section 101(b)(1) and the listed sections were repealed by section 101(a) of Pub. L. 89-44, title I, June 21, 1965, 79 Stat. 136, the Excise Tax Reduction Act of 1965, applicable with respect to articles sold on or after June 22, 1965, as provided in section 701(a) of Pub. L. 89-44, set out as an Effective Date of 1965 Amendment note under section 4161 of this title.
The headings for subchs. (E) and (F) were stricken by section 1904(a)(1)(A) of Pub. L. 94-455, title XIX, Oct. 4, 1976, 90 Stat. 1810, the Tax Reform Act of 1976. Sections 4051 to 4053 were repealed by section 101(b)(2) of Pub. L. 89-44, title I, June 21, 1965, 79 Stat. 136, applicable with respect to articles sold on or after June 22, 1965, as provided in section 701(a) of Pub. L. 89-44, set out as an Effective Date of 1965 Amendment note under section 4061 of this title; and sections 4042 and 4054 to 4058 were repealed by section 1904(a)(1)(D) of Pub. L. 94-455, title XIX, Oct. 4, 1976, 90 Stat. 1811, effective Feb. 1, 1977, as provided in section 1904(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 4041 of this title.
The subject matter of the prior sections was as follows:
A prior section 4001, acts Aug. 16, 1954, ch. 736, 68A Stat. 473; Sept. 2, 1958, Pub. L. 85-859, title I, 101, 72 Stat. 1275; Sept. 21, 1959, Pub. L. 86-344, 1(a), 73 Stat. 617, imposed an excise tax equivalent to 10 percent of selling price upon jewelry, stones, watches, clocks, case and movements for watches and clocks, flatware and hollow ware, opera glasses, lorgnettes, marine glasses, field glasses, and binoculars.
A prior section 4002, act Aug. 16, 1954, ch. 736, 68A Stat. 473, defined “articles sold at retail” to include articles sold at auction.
A prior section 4003, acts Aug. 16, 1954, ch. 736, 68A Stat. 474; Sept. 2, 1958, Pub. L. 85-859, title I, 102, 72 Stat. 1276, specified exemptions to tax imposed by section 4001.
A prior section 4011, act Aug. 16, 1954, ch. 736, 68A Stat. 475, imposed an excise tax equivalent to 10 percent of selling price upon fur articles.
A prior section 4012, act Aug. 16, 1954, ch. 736, 68A Stat. 475, defined “article sold at retail” to include articles manufactured from material supplied by customer and articles sold at auction.
A prior section 4013, act Aug. 16, 1954, ch. 736, 68A Stat. 475, specified exemptions to tax imposed by section 4011.
A prior section 4021, acts Aug. 16, 1954, ch. 736, 68A Stat. 476; Apr. 8, 1960, Pub. L. 86-413, 1, 74 Stat. 31, imposed an excise tax equivalent to 10 percent of selling price upon toilet preparations.
A prior section 4022, act Aug. 16, 1954, ch. 736, 68A Stat. 476, specified certain exemptions from tax imposed by section 4021, including items for babies, items used in barber shops and beauty parlors, and miniature samples.
A prior section 4031, acts Aug. 16, 1954, ch. 736, 68A Stat. 477; Sept. 2, 1958, Pub. L. 85-859, title I, 103, 72 Stat. 1276, imposed an excise tax equivalent to 10 percent of selling price upon luggage and handbags, including billfolds and wallets, traveler's garment bags, and briefcases.
A prior section 4042, act Aug. 16, 1954, ch. 736, 68A Stat. 478, provided a cross reference to section 4222 for exemption from tax where special motor fuels are sold for use for certain vessels.
A prior section 4051, act Aug. 16, 1954, ch. 736, 68A Stat. 479, defined price for which articles were sold for purposes of determining retailers excise taxes.
A prior section 4052, act Aug. 16, 1954, ch. 736, 68A Stat. 479, provided that lease of an article would be considered sale of article for excise tax purposes.
A prior section 4053, acts Aug. 16, 1954, ch. 736, 68A Stat. 479; Sept. 2, 1958, Pub. L. 85-859, title I, 104, 72 Stat. 1276, made provision for imposition of retailers tax on installment sales.
A prior section 4054, act Aug. 16, 1954, ch. 736, 68A Stat. 479, related to application of taxes to retail sales by United States or by any agency or instrumentality of United States unless specifically exempted from such tax.
A prior section 4055, act Aug. 16, 1954, ch. 736, 68A Stat. 480; June 21, 1965, Pub. L. 89-44, title I, 101(b)(3), 79 Stat. 136, exempted from taxes articles sold for exclusive use of any State, Territory of United States, or any political subdivision thereof, or District of Columbia, including use by such entities of any liquid as a fuel.
A prior section 4056, act Aug. 16, 1954, ch. 736, 68A Stat. 480, provided that no tax shall be imposed upon sale of any article for export, or for shipment to a possession of United States and in due course so shipped and exported.
A prior section 4057, added Pub. L. 85-859, title I, 105(a), Sept. 2, 1958, 72 Stat. 1277, and amended Pub. L. 86-344, 2(a), Sept. 21, 1959, 73 Stat. 617; Pub. L. 89-44, title I, 101(b)(4), June 21, 1965, 79 Stat. 136; Pub. L. 91-172, title I, 101(j)(25), Dec. 30, 1969, 83 Stat. 528, provided an exception with respect to sale of any article to a non-profit educational organization for its exclusive use including use of any liquid as a fuel and defined “non-profit educational organization”.
A prior section 4058, act Aug. 16, 1954, ch. 736, 68A Stat. 480, 4058, formerly 4057, renumbered Sept. 2, 1958, Pub. L. 85-859, title I, 105(a), 72 Stat. 1277, related to cross references for exemption of sales to United States in certain cases and administrative provisions of general application.
Amendments to Chapter
1983--Pub. L. 97-424, title V, 512(b)(2)(A), Jan. 6, 1983, 96 Stat. 2177, substituted “Retail Excise Taxes” for “Special Fuels” in chapter heading, and added an analysis for subchapters A and B.
1978--Pub. L. 95-502, title II, 202(c), Oct. 21, 1978, 92 Stat. 1697, added item 4042.
1976--Pub. L. 94-455, title XIX, 1904(a)(1)(A), (D), Oct. 4, 1976, 90 Stat. 1810, 1811, substituted “Special Fuels" for “Retailers Excise Taxes” in chapter heading and added item 4041.
AMENDMENTS
2014 - Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), struck Sec. 4001.
1997 - Subsec. (a). Pub. L. 105-34, Sec. 906(a), amended subsec. (a). Prior to amendment it read as follows:
(a) Imposition of tax. --
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). Pub. L. 105-34, Sec. 906(b)(1), amended subsec. (e) by striking “and section 4003(a)” after “subsection (a).
Subsec. (f). Pub. L. 105-34, Sec. 906(b)(2), amended subsec. (f) by substituting “subsection (a)(1)” for “subsection (a).
Subsec. (f). Pub. L. 105-34, Sec. 1601(f)(3)(A), amended subsec. (f) by inserting “and subsection 4003(a)” after “subsection (a)”, and by inserting “, each place it appears,” before “the percentage”.
Subsec. (g). Pub. L. 105-34, Sec. 1601(f)(3)(B), amended subsec. (g) by substituting “taxes imposed by this section and section 4003” for “tax imposed by this section” and by substituting “, use, or installation” for “or use”.
1996 - Subsec. (e). Pub. L. 104-188, 1703(c)(1), amended pars (1) and (2). Before amendment, pars. (1) and (2) 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(a), substituted “2002” for “1999”.
Subsec. (f)-(g). Pub. L. 104-188, Sec. 1607(b), redesignated subsec. (f) as subsec. (g) and added a new subsec. (f).
1993 - Pub. L. 103-66, Sec. 13161(a), added new Section 4001 to read as above, effective Jan. 1, 1993. Prior to amendment, Section 4001 read as follows:
“(a) Imposition of Tax.--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.
“(b) Passenger Vehicle.--
“(1) In General.--For purposes of subsection (a), 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) Limosines.--In the case of a limosine, 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.”
EFFECTIVE DATE OF REPEAL
Repeal by Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2) SAVINGS PROVISION.—If—
“(A) any provision amended or repealed by the amendments made by this section applied to—
“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date of enactment, or
“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 906 of Pub. L. 105-34 applicable to sales and installations occurring after the date of the enactment of this Act [enacted: Aug. 5, 1997].
Amendments by Sec. 1601(f)(3) of Pub. L. 105-34 effective as if included in the provisions of the Small Business Job Protection Act of 1996 to which they relate.
EFFECTIVE DATE OF 1996 AMENDMENTS
Section 1703(c)(2) of Pub. L. 104-188 provided that: “The amendment made by paragraph (1) shall take effect on the date of the enactment of this Act [enacted: August 20, 1996].
Section 1607(c) of Pub. L. 104-188 provided that: “The amendments made by 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 [enactment date: August 20, 1996; effective date: sales after August 27, 1996].
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).’