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104TH CONGRESS

2D SESSION H. R. 4090

To amend the Internal Revenue Code of 1986 to clarify the application

of the retail tax on heavy trucks and trailers.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 17, 1996

Mr. ENGLISH of Pennsylvania 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 clarify

the application of the retail tax on heavy trucks and trailers.

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

3 SECTION 1. MODIFICATION OF RETAIL TAX ON HEAVY

4 TRUCKS AND TRAILERS.

5 (a) TRACTORS SUBJECT TO TAX ONLY IF SUITABLE

6 FOR USE WITH HEAVY TRAILERS OR SEMITRAILERS.—

7 Paragraph (2) of section 4051(a) of the Internal Revenue

8 Code of 1986 (relating to exclusion for trucks weighing

9 33,000 pounds or less) is amended to read as follows:
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1 ‘‘(2) EXCLUSION FOR TRUCKS, ETC., WEIGHING

2 33,000 POUNDS OR LESS.—The tax imposed by para3 graph (1) shall not apply to any article described in

4 subparagraph (A), (B), or (E) of paragraph (1)

5 which is suitable for use with a vehicle which has a

6 gross vehicle weight of 33,000 pounds or less (as de7 termined under regulations prescribed by the Sec8 retary).’’

9 (b) CERTAIN REPAIRS AND MODIFICATIONS NOT

10 TREATED AS MANUFACTURE.—Section 4052 of such Code

11 is amended by redesignating the subsection defining a

12 long-term lease as subsection (e) and by adding at the end

13 the following new subsection:

14 ‘‘(f) CERTAIN REPAIRS AND MODIFICATIONS NOT

15 TREATED AS MANUFACTURE.—

16 ‘‘(1) IN GENERAL.—An article described in sec17 tion 4051(a)(1) shall not be treated as manufac18 tured or produced solely by reason of repairs or

19 modifications to the article (including any modifica20 tion which changes the transportation function of

21 the article or restores a wrecked article to a func22 tional condition) if the cost of such repairs and

23 modifications does not exceed 75 percent of the re24 tail price of a comparable new article.
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1 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

2 apply if the article (as repaired or modified) would,

3 if new, be taxable under section 4051 and the article

4 when new was not taxable under this section or the

5 corresponding provision of prior law.’’

6 (c) CREDIT FOR TIRE TAX IN LIEU OF EXCLUSION

7 OF VALUE OF TIRES IN COMPUTING PRICE.—

8 (1) IN GENERAL.—Subsection (e) of section

9 4051 of such Code is amended to read as follows:

10 ‘‘(e) CREDIT AGAINST TAX FOR TIRE TAX.—If—

11 ‘‘(1) tires are sold on or in connection with the

12 sale of any article, and

13 ‘‘(2) tax is imposed by this subchapter on the

14 sale of such tires,

15 there shall be allowed as a credit against the tax imposed

16 by this subchapter an amount equal to the tax (if any)

17 imposed by section 4071 on such tires.’’

18 (2) CONFORMING AMENDMENT.—Subparagraph

19 (B) of section 4052(b)(1) of such Code is amended

20 by striking clause (iii), by adding ‘‘and’’ at the end

21 of clause (ii), and by redesignating clause (iv) as

22 clause (iii).

23 (d) SIMPLIFICATION OF CERTIFICATION PROCE24 DURES WITH RESPECT TO SALES OF TAXABLE ARTI25 CLES.—
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1 (1) REPEAL OF REGISTRATION REQUIRE2 MENT.—Subsection (d) of section 4052 of such Code

3 is amended by striking ‘‘rules of—’’ and all that fol4 lows through ‘‘shall apply’’ and inserting ‘‘rules of

5 subsections (c) and (d) of section 4216 (relating to

6 partial payments) shall apply’’.

7 (2) REQUIREMENT TO MODIFY REGULA8 TIONS.—Section 4052 of such Code is amended by

9 adding at the end the following new subsection:

10 ‘‘(g) REGULATIONS.—The Secretary shall prescribe

11 regulations which permit, in lieu of any other certification,

12 persons who are purchasing articles taxable under this

13 subchapter for resale or leasing in a long-term lease to

14 execute a statement (made under penalties of perjury) on

15 the sale invoice that such sale is for resale. The Secretary

16 shall not impose any registration requirement as a condi17 tion of using such procedure.’’

18 (e) EFFECTIVE DATE.—The amendments made by

19 this section shall take effect on January 1, 1997.

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