I

103D CONGRESS

1ST SESSION H. R. 718

To amend the Internal Revenue Code of 1986 to allow a refundable credit

for the purchase of domestically manufactured automobiles.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 2, 1993

Mr. GILMAN introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to allow a

refundable credit for the purchase of domestically manufactured automobiles.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. CREDIT FOR PURCHASE OF DOMESTICALLY

4 MANUFACTURED AUTOMOBILES.

5 (a) GENERAL RULE.—Subpart C of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to refundable credits) is amended by redes8 ignating section 35 as section 36 and by inserting after

9 section 34 the following new section:
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1 ‘‘SEC. 35. PURCHASE OF DOMESTICALLY MANUFACTURED

2 AUTOMOBILES.

3 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al4 lowed as a credit against the tax imposed by this subtitle

5 for the taxable year an amount for each qualified auto6 mobile acquired by the taxpayer during the taxable year

7 equal to the lesser of—

8 ‘‘(1) 10 percent of the cost of such automobile

9 to the taxpayer, or

10 ‘‘(2) $2,500 ($1,000 in the case of a qualified

11 automobile described in subsection (b)(1)(B)).

12 ‘‘(b) QUALIFIED AUTOMOBILE.—For purposes of this

13 section—

14 ‘‘(1) IN GENERAL.—The term ‘qualified auto15 mobile’ means any automobile if such automobile is

16 manufactured in the United States and if—

17 ‘‘(A) such automobile is purchased by the

18 taxpayer in the 1st retail sale of such auto19 mobile (within the meaning of section 4011), or

20 ‘‘(B) such automobile is acquired by the

21 taxpayer in a qualified resale and such resale

22 occurs within the 2-year period beginning on

23 the date of the 1st retail sale of such auto24 mobile.

25 ‘‘(2) AUTOMOBILE.—The term ‘automobile’

26 means any 4-wheeled vehicle which is propelled by
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1 fuel (as defined in section 4064(b)(7)) and which is

2 manufactured primarily for use on public streets,

3 roads, and highways.

4 ‘‘(3) QUALIFIED RESALE.—The term ‘qualified

5 resale’ means any sale of an automobile if—

6 ‘‘(A) such sale is after the 1st retail sale

7 of such automobile,

8 ‘‘(B) such sale is for a purpose other than

9 resale, and

10 ‘‘(C) no credit was allowed under this sec11 tion for any prior acquisition of such auto12 mobile other than at its 1st retail sale.

13 ‘‘(c) SPECIAL RULES.—For purposes of this sec14 tion—

15 ‘‘(1) MANUFACTURED IN THE UNITED

16 STATES.—An automobile shall be treated as manu17 factured in the United States if at least 75 percent

18 of the cost to the manufacturer of such vehicle is at19 tributable to value added in the United States or

20 Canada.

21 ‘‘(2) JOINT ACQUISITIONS.—If any qualified

22 automobile is jointly acquired by two or more per23 sons—

24 ‘‘(A) the aggregate amount allowable as

25 credit under subsection (a) to such persons with
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1 respect to such automobile shall be determined

2 by treating all of such persons as one taxpayer

3 whose taxable year is the calendar year in

4 which such acquisition occurs, and

5 ‘‘(B) there shall be allowed to each of such

6 persons a credit under subsection (a) for such

7 person’s taxable year in which such calendar

8 year ends in an amount which bears the same

9 ratio to the credit determined under subpara10 graph (A) as the portion of the cost of such

11 automobile borne by such person bears to the

12 aggregate cost of such automobile.

13 ‘‘(d) BASIS REDUCTION.—The basis of any qualified

14 automobile shall be reduced by the amount of the credit

15 allowable under this section to the taxpayer for the pur16 chase of such automobile.’’

17 (b) CLERICAL AMENDMENT.—The table of sections

18 for subpart C of part IV of subchapter A of chapter 1

19 of such Code is amended by striking the item relating to

20 section 35 and inserting the following:

‘‘Sec. 35. Credit for purchase of domestically manufactured automobiles.

‘‘Sec. 36. Overpayments of tax.’’

21 (c) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to automobiles acquired after De23 cember 31, 1993.

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