Editor's Note:
Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), struck Sec. 4003, effective December 19, 2014.
I.R.C. § 4003(a) Separate Purchase Of Vehicle And Parts And Accessories Therefor —
Under regulations prescribed by the Secretary—
I.R.C. § 4003(a)(1) In General —
Except as provided in paragraph (2), if—
I.R.C. § 4003(a)(1)(A) —
the owner, lessee, or operator of any passenger vehicle installs (or causes to be
installed) any part or accessory (other than property described in section 4001(a)(2)(B)) on such vehicle, and
I.R.C. § 4003(a)(1)(B) —
such installation is not later than the date 6 months after the date the vehicle
was 1st placed in service,
then there is hereby imposed on such installation a tax equal to 10 percent of the
price of such part or accessory and its installation.
I.R.C. § 4003(a)(2) Limitation —
The tax imposed by paragraph (1) on the installation of any part or accessory shall
not exceed 10 percent of the excess
(if any) of—
I.R.C. § 4003(a)(2)(A) —
the sum of—
I.R.C. § 4003(a)(2)(A)(i) —
the price of such part or accessory and its installation,
I.R.C. § 4003(a)(2)(A)(ii) —
the aggregate price of the parts and accessories (and their installation) installed
before such part or accessory, plus
I.R.C. § 4003(a)(2)(A)(iii) —
the price for which the passenger vehicle was sold, over
I.R.C. § 4003(a)(2)(B) —
the appropriate applicable amount as determined under section 4001(a)(2).
I.R.C. § 4003(a)(3) Exceptions —
Paragraph (1) shall not apply if—
I.R.C. § 4003(a)(3)(A) —
the part or accessory installed is a replacement part or accessory,
I.R.C. § 4003(a)(3)(B) —
the part or accessory is installed to enable or assist an individual with a disability
to operate the vehicle, or to enter or exit the vehicle, by compensating for the
effect of such disability, or
I.R.C. § 4003(a)(3)(C) —
the aggregate price of the parts and accessories (and their installation) described
in paragraph (1)
with respect to the vehicle does not exceed $1,000 (or such other amount or amounts
as the Secretary may by regulation prescribe).
The price of any part or accessory
(and its installation) to which paragraph (1) does not apply by reason of this paragraph
shall not be taken into account under paragraph
(2)(A).
I.R.C. § 4003(a)(4) Installers Secondarily Liable For Tax —
The owners of the trade or business installing the parts or accessories shall be
secondarily liable for the tax imposed by this subsection.
I.R.C. § 4003(b) Imposition Of Tax On Sales, Etc., Within 2 Years Of Vehicles Purchased Tax-Free
I.R.C. § 4003(b)(1) In General —
If—
I.R.C. § 4003(b)(1)(A) —
no tax was imposed under this subchapter on the 1st retail sale of any passenger
vehicle by reason of its exempt use, and
I.R.C. § 4003(b)(1)(B) —
within 2 years after the date of such 1st retail sale, such vehicle is resold by
the purchaser or such purchaser makes a substantial nonexempt use of such vehicle,
then such sale or use of such vehicle by such purchaser shall be treated as the 1st
retail sale of such
vehicle for a price equal to its fair market value at the time of such sale or use.
I.R.C. § 4003(b)(2) Exempt Use —
For purposes of this subsection, the term ‘exempt use’
means any use of a vehicle if the 1st retail sale of such vehicle is not taxable
under this subchapter by reason of such use.
I.R.C. § 4003(c) Parts And Accessories Sold With Taxable Passenger Vehicle —
Parts and accessories sold on, in connection with, or with the sale of any passenger
vehicle shall be treated as part of the vehicle.
I.R.C. § 4003(d) Partial Payments, Etc. —
In the case of a contract, sale, or arrangement described in paragraph (2), (3),
or (4) of section 4216(c), rules similar to the rules of section 4217(e)(2) shall apply for purposes of this subchapter.
(Added by Pub. L. 101-508, title XI, Sec. 11221(a), Nov. 5, 1990, 104 Stat. 1388-439; amended by Pub. L. 103-66, title XIII, Sec. 13161(a), Aug. 10, 1993, 107 Stat. 312; Pub. L. 105-34, title IX, XIV, Sec. 906, 1401(a), 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
2014 - Pub. L. 113-295, Div. A, Sec. 221(a)(103)(A), struck Sec. 4003. Before it was struck, it read as
follows:
“Sec. 4003. Special Rules.
“(a) Separate Purchase Of Vehicle And Parts And Accessories Therefor.—Under regulations
prescribed by the Secretary— “(1) In General.—Except as provided in paragraph (2),
if—
“(A) the owner, lessee, or operator of any passenger vehicle installs (or causes to
be installed) any part or accessory (other than property described in section 4001(a)(2)(B))
on such vehicle, and
“(B) such installation is not later than the date 6 months after the date the vehicle
was 1st placed in service,
“then there is hereby imposed on such installation a tax equal to 10 percent of the
price of such part or accessory and its installation.
“(2) Limitation.—The tax imposed by paragraph (1) on the installation of any part
or accessory shall not exceed 10 percent of the excess (if any) of—
“(A) the sum of—
“(i) the price of such part or accessory and its installation,
“(ii) the aggregate price of the parts and accessories (and their installation) installed
before such part or accessory, plus
“(iii) the price for which the passenger vehicle was sold, over
“(B) the appropriate applicable amount as determined under section 4001(a)(2).
“(3) Exceptions.—Paragraph (1) shall not apply if—
“(A) the part or accessory installed is a replacement part or accessory,
“(B) the part or accessory is installed to enable or assist an individual with a disability
to operate the vehicle, or to enter or exit the vehicle, by compensating for the effect
of such disability, or
“(C) the aggregate price of the parts and accessories (and their installation) described
in paragraph (1) with respect to the vehicle does not exceed $1,000 (or such other
amount or amounts as the Secretary may by regulation prescribe).
“The price of any part or accessory (and its installation) to which paragraph (1)
does not apply by reason of this paragraph shall not be taken into account under paragraph
(2)(A).
“(4) Installers Secondarily Liable For Tax.—The owners of the trade or business installing
the parts or accessories shall be secondarily liable for the tax imposed by this subsection.
“(b) Imposition Of Tax On Sales, Etc., Within 2 Years Of Vehicles Purchased Tax-Free.
“(1) In general. If—
“(A) no tax was imposed under this subchapter on the 1st retail sale of any passenger
vehicle by reason of its exempt use, and
“(B) within 2 years after the date of such 1st retail sale, such vehicle is resold
by the purchaser or such purchaser makes a substantial nonexempt use of such vehicle,
then such sale or use of such vehicle by such purchaser shall be treated as the 1st
retail sale of such vehicle for a price equal to its fair market value at the time
of such sale or use. “(2) Exempt use. For purposes of this subsection, the term
‘exempt use’ means any use of a vehicle if the 1st retail sale of such vehicle is
not taxable under this subchapter by reason of such use.
“(c) Parts And Accessories Sold With Taxable Passenger Vehicle.—Parts and accessories
sold on, in connection with, or with the sale of any passenger vehicle shall be treated
as part of the vehicle.
“(d) Partial Payments, Etc.—In the case of a contract, sale, or arrangement described
in paragraph (2),
(3), or (4) of section 4216(c), rules similar to the rules of section 4217(e)(2) shall
apply for purposes of this subchapter.”
1997 - Subsec. (a)(1)(A). Pub. L. 105-34, Sec. 906(b)(3) amended subpar. (A) by inserting “(other than property described in section 4001(a)(2)(B)”
after “part or accessory”.
Subsec. (a)(2)(B). Pub. L. 105-34, Sec. 906(b)(4) amended subpar. (B). Prior to amendment it read as follows:
“(B) $30,000.”
Subsec. (a)(3)(C). Pub. L. 105-34, Sec. 1401(a), amended subpar. (C) by substituting “$1,000” for “$200”.
1993 - Sec. 4003. Pub. L. 103-66, Sec. 13161(a), amended Sec. 4003. Before amendment, it read as follows:
“Sec. 4003. AIRCRAFT
“(a) Imposition Of Tax.—There is hereby imposed on the 1st retail sale of any aircraft
a tax equal to 10 percent of the price for which so sold to the extent such price
exceeds $250,000.
“(b) Aircraft.—For purposes of this section, the term ‘aircraft’ means any aircraft—
“(1) which is propelled by a motor, and
“(2) which is capable of carrying 1 or more individuals.
“(c) 80 Percent General Business Use.
“(1) In General.—The tax imposed by this section shall not apply to the sale of any
aircraft if 80 percent of the use by the purchaser is in any trade or business.
“(2) Proof Of Business Use.—On the income tax return for each of the 1st 2 taxable
years ending after the date an aircraft on which no tax was imposed by this section
by reason of paragraph (1) was placed in service, the taxpayer filing such return
shall demonstrate to the satisfaction of the Secretary that the use of such aircraft
during each such year met the requirement of paragraph (1).
“(3) Imposition Of Luxury Tax Where Failure Of Proof.—If the requirement of paragraph
(2) is not met for either of the taxable years referred to therein, the taxpayer filing
such returns shall pay the tax which would (but for paragraph (1))
have been imposed on such aircraft plus interest determined under subchapter C of
chapter 67 during the period beginning on the date such tax would otherwise have been
imposed. If such taxpayer fails to pay the tax imposed pursuant to the preceding sentence,
no deduction shall be allowed under section 168 for any taxable year with respect
to the aircraft involved.
“(d) Other Exceptions.—The tax imposed by this section shall not apply to the sale
of any aircraft for use by the purchaser exclusively—
“(1) in the aerial application of fertilizers or other substances,
“(2) in the case of a helicopter, in a use described in paragraph (1) or (2) of section
4261(e),
“(3) in a trade or business of providing flight training, or
“(4) in 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(b) 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. 1401(a) of Pub. L. 105-34 applicable to installations on vehicles sold after the date of the enactment of this
Act [Enacted:
Aug. 5, 1997].
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Sec. 13161(a)
of Pub. L. 103-66, effective January 1, 1993.
