Editor's Note: Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), struck Sec. 4002, effective December 19, 2014.
I.R.C. § 4002(a) 1st Retail Sale
For purposes of this subchapter, the term “1st retail sale” means the
1st sale, for a purpose other than resale, after manufacture, production, or importation.
I.R.C. § 4002(b) Use Treated As Sale
I.R.C. § 4002(b)(1) In General
If any person uses a passenger vehicle (including any use after importation) before
the 1st retail sale of such vehicle, then such person shall be liable for tax under
this subchapter in the same manner as if such vehicle were sold at retail by him.
I.R.C. § 4002(b)(2) Exemption For Further Manufacturer
Paragraph (1) shall not apply to use of a vehicle as material in the manufacture
or production of, or as a component part of, another vehicle taxable under this
subchapter to be manufactured or produced by him.
I.R.C. § 4002(b)(3) Exemption For Demonstration Use
Paragraph (1) shall not apply to any use of a passenger vehicle as a demonstrator.
I.R.C. § 4002(b)(4) Exception For Use After Importation Of Certain Vehicles
Paragraph (1) shall not apply to the use of a vehicle after importation if the user
or importer establishes to the satisfaction of the Secretary that the 1st use of
the vehicle occurred before January 1, 1991, outside the United States.
I.R.C. § 4002(b)(5) Computation Of Tax
In the case of any person made liable for tax by paragraph
(1), the tax shall be computed on the price at which similar vehicles are sold at
retail in the ordinary course of trade, as determined by the Secretary.
I.R.C. § 4002(c) Leases Considered As Sales
For purposes of this subchapter—
I.R.C. § 4002(c)(1) In General
Except as otherwise provided in this subsection, the lease of a vehicle (including
any renewal or any extension of a lease or any subsequent lease of such vehicle)
by any person shall be considered a sale of such vehicle at retail.
I.R.C. § 4002(c)(2) Special Rules For Long-Term Leases
I.R.C. § 4002(c)(2)(A) Tax Not Imposed On Sale For Leasing In A Qualified Lease.
The sale of a passenger vehicle to a person engaged in a passenger vehicle leasing
or rental trade or business for leasing by such person in a long-term lease shall
not be treated as the 1st retail sale of such vehicle.
I.R.C. § 4002(c)(2)(B) Long-Term Lease
For purposes of subparagraph (A), the term “long-term lease” means any
long-term lease (as defined in section 4052
I.R.C. § 4002(c)(2)(C) Special Rules
In the case of a long-term lease of a vehicle which is treated as the 1st retail
sale of such vehicle—
I.R.C. § 4002(c)(2)(C)(i) Determination Of Price
The tax under this subchapter shall be computed on the lowest price for which the
vehicle is sold by retailers in the ordinary course of trade.
I.R.C. § 4002(c)(2)(C)(iii) No Tax Where Exempt Use By Lessee
No tax shall be imposed on any lease payment under a long-term lease if the lessee's
use of the vehicle under such lease is an exempt use (as defined in section 4003(b)
) of such vehicle.
I.R.C. § 4002(d) Determination Of Price
I.R.C. § 4002(d)(1) In General
In determining price for purposes of this subchapter—
I.R.C. § 4002(d)(1)(A)
there shall be included any charge incident to placing the passenger vehicle in condition
ready for use,
I.R.C. § 4002(d)(1)(B)
there shall be excluded—
I.R.C. § 4002(d)(1)(B)(ii)
if stated as a separate charge, the amount of any retail sales tax imposed by any
State or political subdivision thereof or the District of Columbia, whether the liability
for such tax is imposed on the vendor or vendee, and
I.R.C. § 4002(d)(2) Other Rules
Rules similar to the rules of paragraphs (2) and (4)
of section 4052(b)
shall apply for purposes of this subchapter.
(Added by Pub. L. 103-66, Sec. 13161(a), Aug. 10, 1993; repealed by Pub. L. 113-295, Div. A, title II, Sec. 221(a)(103)(A), Dec. 19, 2014, 128 Stat. 4010.)
2014 - Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), repealed Section 4002.
1993 - Pub. L. 103-66, Sec. 13161(a), added new Section 4002 to read as above, effective Jan. 1, 1993. Prior to amendment,
Section 4002 read as follows:
“(a) Imposition of Tax.--There is hereby imposed on the 1st retail sale of any
boat a tax equal to 10 percent of the price for which so sold to the extent such price
“(b) Exceptions.--The tax imposed by this section shall nor apply to the sale
of any boat for use by the purchaser exclusively in the active conduct of--
“(1) a trade or business of commercial fishing or transporting persons or property
for compensation of hire, or
“(2) any other trade or business unless the boat is to be used predominantly
in any activity which is of a type generally considered to constitute entertainment,
amusement, or recreation.”
Repeal by Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), effective December 19, 2014.
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
any provision amended or repealed by the amendments made by this section applied to—
any transaction occurring before the date of the enactment of this Act [Enacted: Dec.
any property acquired before such date of enactment, or
any item of income, loss, deduction, or credit taken into account before such date
of enactment, and
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 January 1, 1993.