istering authority shall have the right to video or audio 
tape the interview at the person’s own expense. 
‘‘(d) RIGHT TO FINAL NOTICE OF AMOUNT DUE.— 
No collection or enforcement action will be commenced 
against a person until 30 days after they have been pro-
vided with a final notice of amount due under this subtitle 
by the sales tax administering authority. The final notice 
of amount due shall set forth the amount of tax due (along 
with any interest and penalties due) and the factual and 
legal basis for such amounts being due with sufficient 
specificity that such basis can be understood by a reason-
able person who is not a tax professional reading the no-
tice. The final notice shall be sent by certified mail, return 
receipt requested, to— 
‘‘(1) the address last provided by a registered 
seller; or 
‘‘(2) the best available address to a person who 
is not a registered seller. 
‘‘(e) CONFIDENTIALITY OF TAX INFORMATION.— 
‘‘(1) IN GENERAL.—All reports and report in-
formation (related to any internal revenue law) shall 
be confidential and except as authorized by this title 
‘‘(A) no officer or employee (including 
former officers and employees) of the United 
States; 
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‘‘(B) no officer or employee (including 
former officers and employees) of any State or 
local agency who has had access to returns or 
return information; and 
‘‘(C) no other person who has had access 
to returns or return information; 
shall disclose any report or report information ob-
tained by him in any manner in connection with his 
service as such officer or employee or otherwise. 
‘‘(2) DESIGNEES.—The sales tax administering 
authority may, subject to such requirements as the 
Secretary may impose, disclose the report and report 
information of a person to that person or persons as 
that person may designate to receive said informa-
tion or return. 
‘‘(3) OTHER
SALES
TAX
ADMINISTERING
AU-
THORITIES.—A sales tax administering authority 
may impose, disclose the report and report informa-
tion to another sales tax administering authority. 
‘‘(4) INCOMPETENCY.—A sales tax admin-
istering authority may, subject to such requirements 
as the Secretary may impose, disclose the report and 
report information to the committee, trustee, or 
guardian of a person who is incompetent. 
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‘‘(5) DECEASED PERSONS.—A sales tax admin-
istering authority may, subject to such requirements 
as the Secretary may impose, disclose the report and 
report information to the decedent’s— 
‘‘(A) administrator, executor, estate trust-
ee, or 
‘‘(B) heir at law, next of kin, or beneficiary 
under a will who has a material interest that 
will be affected by the information. 
‘‘(6) BANKRUPTCY.—A sales tax administering 
authority may, subject to such requirements as the 
Secretary may impose, disclose the report and report 
information to a person’s trustee in bankruptcy. 
‘‘(7) CONGRESS.—Upon written request from 
the Chairman of the Committee on Ways and 
Means, the Chairman of the Committee on Finance 
of the Senate, or the Chairman or Chief of Staff of 
the Joint Committee on Taxation, a sales tax admin-
istering authority shall disclose the report and report 
information, except that any report or report infor-
mation that can be associated with or otherwise 
identify a particular person shall be furnished to 
such committee only when sitting in closed executive 
session unless such person otherwise consents in 
writing to such disclosure. 
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‘‘(8) WAIVER OF PRIVACY RIGHTS.—A person 
may waive confidentiality rights provided by this sec-
tion. Such waiver must be in writing. 
‘‘(9) INTERNAL USE.—Disclosure of the report 
or report information by officers or employees of a 
sales tax administering authority to other officers or 
employees of a sales tax administering authority in 
the ordinary course of tax administration activities 
shall not constitute unlawful disclosure of the report 
or report information. 
‘‘(10) STATISTICAL
USE.—Upon request in 
writing by the Secretary of Commerce, the Secretary 
shall furnish such reports and report information to 
officers and employees of the Department of Com-
merce as the Secretary may prescribe by regulation 
for the purposes of, and only to the extent necessary 
in, the structuring of censuses and national eco-
nomic accounts and conducting related statistical ac-
tivities authorized by law. 
‘‘(11) DEPARTMENT OF THE TREASURY.—Re-
turns and return information shall be open for in-
spection by officers and employees of the Depart-
ment of the Treasury whose official duties require 
such inspection or disclosure for the purpose of, and 
only to the extent necessary for, preparing economic 
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or financial forecasts, projections, analyses, or esti-
mates. Such inspection or disclosure shall be per-
mitted only upon written request that sets forth the 
reasons why such inspection or disclosure is nec-
essary and is signed by the head of the bureau or 
office of the Department of the Treasury requesting 
the inspection or disclosure. 
‘‘SEC. 606. INSTALLMENT AGREEMENTS; COMPROMISES. 
‘‘The sales tax administering authority is authorized 
to enter into written agreements with any person under 
which the person is allowed to satisfy liability for payment 
of any tax under this subtitle (and penalties and interest 
relating thereto) in installment payments if the sales tax 
administering authority determines that such agreement 
will facilitate the collection of such liability. The agree-
ment shall remain in effect for the term of the agreement 
unless the information that the person provided to the 
sales tax administering authority was materially inac-
curate or incomplete. The sales tax administering author-
ity may compromise any amounts alleged to be due. 
‘‘CHAPTER 7—SPECIAL RULES 
‘‘Sec. 701. Hobby activities. 
‘‘Sec. 702. Gaming activities. 
‘‘Sec. 703. Government purchases. 
‘‘Sec. 704. Government enterprises. 
‘‘Sec. 705. Mixed use property. 
‘‘Sec. 706. Not-for-profit organizations. 
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‘‘SEC. 701. HOBBY ACTIVITIES. 
‘‘(a) HOBBY ACTIVITIES.—Neither the exemption af-
forded by section 102 for intermediate sales nor the cred-
its available pursuant to section 202 or 203 shall be avail-
able for any taxable property or service purchased for use 
in an activity if that activity is not engaged in for-profit. 
‘‘(b) STATUS DEEMED.—If the activity has received 
gross payments for the sale of taxable property or services 
that exceed the sum of— 
‘‘(1) taxable property and services purchased; 
‘‘(2) wages and salary paid; and 
‘‘(3) taxes (of any type) paid, 
in 2 or more of the most recent 3 calendar years during 
which it operated when the business activity shall be con-
clusively deemed to be engaged in for profit. 
‘‘SEC. 702. GAMING ACTIVITIES. 
‘‘(a) REGISTRATION.—Any person selling 1 or more 
chances is a gaming sponsor and shall register, in a form 
prescribed by the Secretary, with the sales tax admin-
istering authority as a gaming sponsor. 
‘‘(b) CHANCE DEFINED.—For purposes of this sec-
tion, the term ‘chance’ means a lottery ticket, a raffle tick-
et, chips, other tokens, a bet or bets placed, a wager or 
wagers placed, or any similar device where the purchase 
of the right gives rise to an obligation by the gaming spon-
sor to pay upon the occurrence of— 
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‘‘(1) a random or unpredictable event; or 
‘‘(2) an event over which neither the gaming 
sponsor nor the person purchasing the chance has 
control over the outcome. 
‘‘(c) CHANCES NOT TAXABLE PROPERTY OR SERV-
ICE.—Notwithstanding any other provision in this sub-
title, a chance is not taxable property or services for pur-
poses of section 101. 
‘‘(d) TAX ON GAMING SERVICES IMPOSED.—A 23- 
percent tax is hereby imposed on the taxable gaming serv-
ices of a gaming sponsor. This tax shall be paid and remit-
ted by the gaming sponsor. The tax shall be remitted by 
the 15th day of each month with respect to taxable gaming 
services during the previous calendar month. 
‘‘(e) TAXABLE GAMING SERVICES DEFINED.—For 
purposes of this section, the term ‘taxable gaming services’ 
means— 
‘‘(1) gross receipts of the gaming sponsor from 
the sale of chances, minus 
‘‘(2) the sum of— 
‘‘(A) total gaming payoffs to chance pur-
chasers (or their designees); and 
‘‘(B) gaming specific taxes (other than the 
tax imposed by this section) imposed by the 
Federal, State, or local government. 
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‘‘SEC. 703. GOVERNMENT PURCHASES. 
‘‘(a) GOVERNMENT PURCHASES.— 
‘‘(1) PURCHASES BY THE FEDERAL GOVERN-
MENT.—Purchases by the Federal Government of 
taxable property and services shall be subject to the 
tax imposed by section 101. 
‘‘(2) PURCHASE BY STATE GOVERNMENTS AND 
THEIR
POLITICAL
SUBDIVISIONS.—Purchases by 
State governments and their political subdivisions of 
taxable property and services shall be subject to the 
tax imposed by section 101. 
‘‘(b) CROSS REFERENCES.—For purchases by gov-
ernment enterprises see section 704. 
‘‘SEC. 704. GOVERNMENT ENTERPRISES. 
‘‘(a) GOVERNMENT ENTERPRISES TO COLLECT AND 
REMIT TAXES ON SALES.—Nothing in this subtitle shall 
be construed to exempt any Federal, State, or local gov-
ernmental unit or political subdivision (whether or not the 
State is an administering State) operating a government 
enterprise from collecting and remitting tax imposed by 
this subtitle on any sale of taxable property or services., 
Government enterprises shall comply with all duties im-
posed by this subtitle and shall be liable for penalties and 
subject to enforcement action in the same manner as pri-
vate persons that are not government enterprises. 
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‘‘(b) GOVERNMENT ENTERPRISE.—Any entity owned 
or operated by a Federal, State, or local governmental unit 
or political subdivision that receives gross payments from 
private persons is a government enterprise, except that a 
government-owned entity shall not become a government 
enterprise for purposes of this section unless in any quar-
ter it has revenues from selling taxable property or serv-
ices that exceed $2,500. 
‘‘(c) GOVERNMENT ENTERPRISES INTERMEDIATE 
SALES.— 
‘‘(1) IN
GENERAL.—Government enterprises 
shall not be subject to tax on purchases that would 
not be subject to tax pursuant to section 102(b) if 
the government enterprise were a private enterprise. 
‘‘(2) 
EXCEPTION.—Government 
enterprises 
may not use the exemption afforded by section 
102(b) to serve as a conduit for tax-free purchases 
by government units that would otherwise be subject 
to taxation on purchases pursuant to section 703. 
Transfers of taxable property or services purchased 
exempt from tax from a government enterprise to 
such government unit shall be taxable. 
‘‘(d) SEPARATE BOOKS OF ACCOUNT.—Any govern-
ment enterprise must maintain books of account, separate 
from the nonenterprise government accounts, maintained 
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in accordance with generally accepted accounting prin-
ciples. 
‘‘(e) TRADE OR BUSINESS.—A government enterprise 
shall be treated as a trade or business for purposes of this 
subtitle. 
‘‘(f) ENTERPRISE SUBSIDIES CONSTITUTE TAXABLE 
PURCHASE.—A transfer of funds to a government enter-
prise by a government entity without full consideration 
shall constitute a taxable government purchase with the 
meaning of section 703 to the extent that the transfer of 
funds exceeds the fair market value of the consideration. 
‘‘SEC. 705. MIXED USE PROPERTY. 
‘‘(a) MIXED USE PROPERTY OR SERVICE.— 
‘‘(1) MIXED USE PROPERTY OR SERVICE DE-
FINED.—For purposes of this section, the term 
‘mixed use property or service’ is a taxable property 
or taxable service used for both taxable use or con-
sumption and for a purpose that would not be sub-
ject to tax pursuant to section 102(a)(1). 
‘‘(2) TAXABLE THRESHOLD.—Mixed use prop-
erty or service shall be subject to tax notwith-
standing section 102(a)(1) unless such property or 
service is used more than 95 percent for purposes 
that would give rise to an exemption pursuant to 
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section 102(a)(1) during each calendar year (or por-
tions thereof) it is owned. 
‘‘(3) MIXED
USE
PROPERTY
OR
SERVICES 
CREDIT.—A person registered pursuant to section 
502 is entitled to a business use conversion credit 
(pursuant to section 202) equal to the product of— 
‘‘(A) the mixed use property amount; and 
‘‘(B) the business use ratio; and 
‘‘(C) the rate of tax imposed by section 
101. 
‘‘(4) MIXED
USE
PROPERTY
AMOUNT.—The 
mixed use property amount for each month (or frac-
tion thereof) in which the property was owned shall 
be— 
‘‘(A) 
one-three-hundred-sixtieth 
of 
the 
gross payments for real property for 360 
months or until the property is sold; 
‘‘(B) one-eighty-fourth of the gross pay-
ments for tangible personal property for 84 
months or until the property is sold; 
‘‘(C) one-sixtieth of the gross payments for 
vehicles for 60 months or until the property is 
sold; or 
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‘‘(D) for other types of taxable property or 
services, a reasonable amount or in accordance 
with regulations prescribed by the Secretary. 
‘‘(5) BUSINESS USE RATIO.—For purposes of 
this section, the term ‘business use ratio’ means the 
ratio of business use to total use for a particular cal-
endar month (or portion thereof if the property was 
owned for only part of said calendar month). For ve-
hicles, the business use ratio will be the ratio of 
business purpose miles to total miles in a particular 
calendar month. For real property, the business use 
ratio is the ratio of floor space used primarily for 
business purposes to total floor space in a particular 
calendar month. For tangible personal property (ex-
cept for vehicles), the business use ratio is the ratio 
of total time used for business purposes to total time 
used in a particular calendar year. For other prop-
erty or services, the business ratio shall be cal-
culated using a reasonable method. Reasonable 
records must be maintained to support a person’s 
business use of the mixed use property or service. 
‘‘(b) TIMING OF BUSINESS USE CONVERSION CRED-
IT ARISING OUT OF OWNERSHIP OF MIXED USE PROP-
ERTY.—A person entitled to a credit pursuant to sub-
section (a)(3) arising out of the ownership of mixed use 
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