‘‘(1) IN GENERAL.—The term ‘financial inter-
mediation services’ means the sum of— 
‘‘(A) explicitly charged fees for financial 
intermediation services, and 
‘‘(B) implicitly charged fees for financial 
intermediation services. 
‘‘(2) EXPLICITLY CHARGED FEES FOR FINAN-
CIAL INTERMEDIATION SERVICES.—The term ‘explic-
itly charged fees for financial intermediation serv-
ices’ includes— 
‘‘(A) brokerage fees; 
‘‘(B) explicitly stated banking, loan origi-
nation, processing, documentation, credit check 
fees, or other similar fees; 
‘‘(C) safe-deposit box fees; 
‘‘(D) insurance premiums, to the extent 
such premiums are not allocable to the invest-
ment account of the underlying insurance pol-
icy; 
‘‘(E) trustees’ fees; and 
‘‘(F) other financial services fees (includ-
ing mutual fund management, sales, and exit 
fees). 
‘‘(3) IMPLICITLY CHARGED FEES FOR FINAN-
CIAL INTERMEDIATION SERVICES.— 
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‘‘(A) IN GENERAL.—The term ‘implicitly 
charged fees for financial intermediation serv-
ices’ includes the gross imputed amount in rela-
tion to any underlying interest-bearing invest-
ment, account, or debt. 
‘‘(B) GROSS IMPUTED AMOUNT.—For pur-
poses of subparagraph (A), the term ‘gross im-
puted amount’ means— 
‘‘(i) with respect to any underlying in-
terest-bearing investment or account, the 
product of— 
‘‘(I) the excess (if any) of the 
basic interest rate (as defined in sec-
tion 805) over the rate paid on such 
investment; and 
‘‘(II) the amount of the invest-
ment or account; and 
‘‘(ii) with respect to any underlying 
interest-bearing debt, the product of— 
‘‘(I) the excess (if any) of the 
rate paid on such debt over the basic 
interest rate (as defined in section 
805); and 
‘‘(II) the amount of the debt. 
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‘‘(b) SELLER OF FINANCIAL INTERMEDIATION SERV-
ICES.—For purposes of section 103(a), the seller of finan-
cial intermediation services shall be— 
‘‘(1) in the case of explicitly charged fees for fi-
nancial intermediation services, the seller shall be 
the person who receives the gross payments for the 
charged financial intermediation services; 
‘‘(2) in the case of implicitly charged fees for fi-
nancial intermediation services with respect to any 
underlying interest-bearing investment or account, 
the person making the interest payments on the in-
terest-bearing investment or account; and 
‘‘(3) in the case of implicitly charged fees for fi-
nancial intermediation services with respect to any 
interest-bearing debt, the person receiving the inter-
est payments on the interest-bearing debt. 
‘‘SEC. 802. BAD DEBTS. 
‘‘(a) IN GENERAL.—For purposes of section 205(a), 
a bad debt shall be a business debt that becomes wholly 
or partially worthless to the payee. 
‘‘(b) BUSINESS LOAN.—For purposes of subsection 
(a), a business loan or debt is a bona fide loan or debt 
made for a business purpose that both parties intended 
be repaid. 
‘‘(c) DETERMINATION OF WORTHLESSNESS.— 
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‘‘(1) IN GENERAL.—No loan or debt shall be 
considered wholly or partially worthless unless it has 
been in arrears for 180 days or more, except that if 
a debt is discharged wholly or partially in bank-
ruptcy before 180 days has elapsed, then it shall be 
deemed wholly or partially worthless on the date of 
discharge. 
‘‘(2) DETERMINATION BY HOLDER.—A loan or 
debt that has been in arrears for 180 days or more 
may be deemed wholly or partially worthless by the 
holder unless a payment schedule has been entered 
into between the debtor and the lender. 
‘‘(d) CROSS REFERENCE.—See section 205(c) for tax 
on subsequent payments. 
‘‘SEC. 803. TIMING OF TAX ON FINANCIAL INTERMEDIATION 
SERVICES. 
‘‘The tax on financial intermediation services pro-
vided by section 801 with respect to an underlying invest-
ment account or debt shall be imposed and collected with 
the same frequency that statements are rendered by the 
financial institution in connection with the investment ac-
count or debt but not less frequently than quarterly. 
‘‘SEC. 804. FINANCING LEASES. 
‘‘(a) DEFINITION.—For purposes of this section, the 
term ‘financing lease’ means any lease under which the 
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lessee has the right to acquire the property for 50 percent 
or less of its fair market value at the end of the lease 
term. 
‘‘(b) GENERAL RULE.—Financing leases shall be 
taxed in the method set forth in this section. 
‘‘(c) DETERMINATION OF PRINCIPAL AND INTEREST 
COMPONENTS
OF FINANCING LEASE.—The Secretary 
shall promulgate rules for disaggregating the principal 
and interest components of a financing lease. The prin-
cipal amount shall be determined to the extent possible 
by examination of the contemporaneous sales price or 
prices of property the same or similar as the leased prop-
erty. 
‘‘(d) ALTERNATIVE METHOD.—In the event that con-
temporaneous sales prices or property the same or similar 
as the leased property are not available, the principal and 
interest components of a financing lease shall be 
disaggregated using the applicable interest rate (as de-
fined in section 511) plus 4 percent. 
‘‘(e) PRINCIPAL COMPONENT.—The principal compo-
nent of the financing lease shall be subject to tax as if 
a purchase in the amount of the principal component had 
been made on the day on which said lease was executed. 
‘‘(f) INTEREST COMPONENT.—The financial inter-
mediation services amount with respect to the interest 
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component of the financing lease shall be subject to tax 
under this subtitle. 
‘‘(g) COORDINATION.—If the principal component 
and financial intermediation services amount with respect 
to the interest component of a lease have been taxed pur-
suant to this section, then the gross lease or rental pay-
ments shall not be subject to additional tax. 
‘‘SEC. 805. BASIC INTEREST RATE. 
‘‘For purposes of this chapter, the basic interest rate 
with respect to a debt instrument, investment, financing 
lease, or account shall be the applicable interest rate (as 
determined in section 511). For debt instruments, invest-
ments, or accounts of contractually fixed interest, the ap-
plicable interest rate of the month of issuance shall apply. 
For debt instruments, investments, or accounts of variable 
interest rates and which have no reference interest rate, 
the applicable interest shall be the Federal short-term in-
terest rate for each month. For debt instruments, invest-
ments, or accounts of variable interest rates and which 
have a reference interest rate, the applicable interest shall 
be the applicable interest rate for the reference interest 
rate for each month. 
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‘‘SEC. 806. FOREIGN FINANCIAL INTERMEDIATION SERV-
ICES. 
‘‘(a) SPECIAL RULES RELATING TO INTERNATIONAL 
FINANCIAL
INTERMEDIATION
SERVICES.—Financial 
intermediation services shall be deemed as used or con-
sumed within the United States if the person (or any re-
lated party as defined in section 205(e)) purchasing the 
services is a resident of the United States. 
‘‘(b) DESIGNATION OF TAX REPRESENTATIVE.—Any 
person that provides financial intermediation services to 
United States residents must, as a condition of lawfully 
providing such services, designate, in a form prescribed 
by the Secretary, a tax representative for purposes of this 
subtitle. The tax representative shall be responsible for en-
suring that the taxes imposed by this subtitle are collected 
and remitted and shall be jointly and severally liable for 
collecting and remitting these taxes. The Secretary may 
require reasonable bond of the tax representative. The 
Secretary or a sales tax administering authority may bring 
an action seeking a temporary restraining order, an in-
junction, or such other order as may be appropriate to 
enforce this section. 
‘‘(c) CROSS REFERENCES.—For definition of person, 
see section 901. 
‘‘CHAPTER 9—ADDITIONAL MATTERS 
‘‘Sec. 901. Additional matters. 
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‘‘Sec. 902. Transition matters. 
‘‘Sec. 903. Wages to be reported to Social Security Administration. 
‘‘Sec. 904. Trust Fund revenue. 
‘‘Sec. 905. Withholding of tax on nonresident aliens and foreign corporations. 
‘‘SEC. 901. ADDITIONAL MATTERS. 
‘‘(a) 
INTANGIBLE
PROPERTY
ANTIAVOIDANCE 
RULE.—Notwithstanding section 2(a)(14)(a)(i), the sale 
of a copyright or trademark shall be treated as the sale 
of taxable services (within the meaning of section 101(a)) 
if the substance of the sales of copyright or trademark 
constituted the sale of the services that produced the copy-
righted material or the trademark. 
‘‘(b) DE MINIMIS PAYMENTS.—Up to $400 of gross 
payments per calendar year shall be exempt from the tax 
imposed by section 101 if— 
‘‘(1) made by a person not in connection with 
a trade or business at any time during such calendar 
year prior to making said gross payments, and 
‘‘(2) made to purchase any taxable property or 
service which is imported into the United States by 
such person for use or consumption by such person 
in the United States. 
‘‘(c) DE MINIMIS SALES.—Up to $1,200 per calendar 
year of gross payments shall be exempt from the tax im-
posed by section 101 if received— 
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‘‘(1) by a person not in connection with a trade 
or business during such calendar year prior to the 
receipt of said gross payments; and 
‘‘(2) in connection with a casual or isolated 
sale. 
‘‘(d) DE MINIMIS SALE OF FINANCIAL INTERMEDI-
ATION SERVICES.—Up to $10,000 per calendar year of 
gross payments received by a person from the sale of fi-
nancial intermediation services (as determined in accord-
ance with section 801) shall be exempt from the tax im-
posed by section 101. The exemption provided by this sub-
section is in addition to other exemptions afforded by this 
chapter. The exemption provided by this subsection shall 
not be available to large sellers (as defined in section 
501(e)(3)). 
‘‘(e) PROXY BUYING TAXABLE.—If a registered per-
son provides taxable property or services to a person either 
as a gift, prize, reward, or as remuneration for employ-
ment, and such taxable property or services were not pre-
viously subject to tax pursuant to section 101, then the 
provision of such taxable property or services by the reg-
istered person shall be deemed the conversion of such tax-
able property or services to personal use subject to tax 
pursuant to section 103(c) at the tax inclusive fair market 
value of such taxable property or services. 
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‘‘(f) SUBSTANCE OVER FORM.—The substance of a 
transaction will prevail over its form if the transaction has 
no bona fide economic purpose and is designed to evade 
tax imposed by this subtitle. 
‘‘(g) CERTAIN EMPLOYEE DISCOUNTS TAXABLE.— 
‘‘(1) EMPLOYEE DISCOUNT.—For purposes of 
this subsection, the term ‘employee discount’ means 
an employer’s offer of taxable property or services 
for sale to its employees or their families (within the 
meaning of section 302(b)) for less than the offer of 
such taxable property or services to the general pub-
lic. 
‘‘(2) EMPLOYEE DISCOUNT AMOUNT.—For pur-
poses of this subsection, the employee discount 
amount is the amount by which taxable property or 
services are sold pursuant to an employee discount 
below the amount for which such taxable property or 
services would have been sold to the general public. 
‘‘(3) TAXABLE AMOUNT.—If the employee dis-
count amount exceeds 20 percent of the price that 
the taxable property or services would have been sold 
to the general public, then the sale of such taxable 
property or services by the employer shall be deemed 
the conversion of such taxable property or services 
to personal use and tax shall be imposed on the tax-
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able employee discount amount. The taxable em-
ployee discount amount shall be— 
‘‘(A) the employee discount amount, minus 
‘‘(B) 20 percent of the amount for which 
said taxable property or services would have 
been sold to the general public. 
‘‘(h) SATURDAY, SUNDAY, OR LEGAL HOLIDAY.— 
When the last day prescribed for performing any act re-
quired by this subtitle falls on a Saturday, Sunday, or 
legal holiday (in the jurisdiction where the return is to 
be filed), the performance of such act shall be considered 
timely if it is performed on the next day which is not a 
Saturday, Sunday, or legal holiday (in the jurisdiction 
where the return is to be filed). 
‘‘SEC. 902. TRANSITION MATTERS. 
‘‘(a) INVENTORY.— 
‘‘(1) QUALIFIED
INVENTORY.—Inventory held 
by a trade or business on the close of business on 
December 31, 2016, shall be qualified inventory if it 
is sold— 
‘‘(A) before December 31, 2017; 
‘‘(B) by a registered person; and 
‘‘(C) subject to the tax imposed by section 
101. 
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‘‘(2) COSTS.—For purposes of this section, 
qualified inventory shall have the cost that it had for 
Federal income tax purposes for the trade or busi-
ness as of December 31, 2016 (including any 
amounts capitalized by reason of section 263A of the 
Internal Revenue Code of 1986 as in effect on De-
cember 31, 2016). 
‘‘(3) TRANSITIONAL INVENTORY CREDIT.—The 
trade or business which held the qualified inventory 
on the close of business on December 31, 2016, shall 
be entitled to a transitional inventory credit equal to 
the cost of the qualified inventory (determined in ac-
cordance with paragraph (2)) times the rate of tax 
imposed by section 101. 
‘‘(4) TIMING OF CREDIT.—The credit provided 
under paragraph (3) shall be allowed with respect to 
the month when the inventory is sold subject to the 
tax imposed by this subtitle. Said credit shall be re-
ported as an intermediate and export sales credit 
and the person claiming said credit shall attach sup-
porting schedules in the form that the Secretary 
may prescribe. 
‘‘(b) WORK-IN-PROCESS.—For purposes of this sec-
tion, inventory shall include work-in-process. 
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‘‘(c) QUALIFIED INVENTORY HELD BY BUSINESSES 
NOT SELLING SAID QUALIFIED INVENTORY
AT RE-
TAIL.— 
‘‘(1) IN GENERAL.—Qualified inventory held by 
businesses that sells said qualified inventory not sub-
ject to tax pursuant to section 102(a) shall be eligi-
ble for the transitional inventory credit only if that 
business (or a business that has successor rights 
pursuant to paragraph (2)) receives certification in 
a form satisfactory to the Secretary that the quali-
fied inventory was subsequently sold subject to the 
tax imposed by this subtitle. 
‘‘(2) TRANSITIONAL INVENTORY CREDIT RIGHT 
MAY BE SOLD.—The business entitled to the transi-
tional inventory credit may sell the right to receive 
said transitional inventory credit to the purchaser of 
the qualified inventory that gave rise to the credit 
entitlement. Any purchaser of such qualified inven-
tory (or property or services into which the qualified 
inventory has been incorporated) may sell the right 
to said transitional inventory credit to a subsequent 
purchaser of said qualified inventory (or property or 
services into which the qualified inventory has been 
incorporated). 
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‘‘SEC. 903. WAGES TO BE REPORTED TO SOCIAL SECURITY 
ADMINISTRATION. 
‘‘(a) IN GENERAL.—Employers shall submit such in-
formation to the Social Security Administration as is re-
quired by the Social Security Administration to calculate 
Social Security benefits under title II of the Social Secu-
rity Act, including wages paid, in a form prescribed by 
the Secretary. A copy of the employer submission to the 
Social Security Administration relating to each employee 
shall be provided to each employee by the employer. 
‘‘(b) WAGES.—For purposes of this section, the term 
‘wages’ means all cash remuneration for employment (in-
cluding tips to an employee by third parties provided that 
the employer or employee maintains records documenting 
such tips) including self-employment income; except that 
such term shall not include— 
‘‘(1) any insurance benefits received (including 
death benefits); 
‘‘(2) pension or annuity benefits received; 
‘‘(3) tips received by an employee over $5,000 
per year; and 
‘‘(4) benefits received under a government enti-
tlement program (including Social Security benefits 
and unemployment compensation benefits). 
‘‘(c) SELF-EMPLOYMENT INCOME.—For purposes of 
subsection (b), the term ‘self-employment income’ means 
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gross payments received for taxable property or services 
minus the sum of— 
‘‘(1) gross payments made for taxable property 
or services (without regard to whether tax was paid 
pursuant to section 101 on such taxable property or 
services), and 
‘‘(2) wages paid by the self-employed person to 
employees of the self-employed person. 
‘‘SEC. 904. TRUST FUND REVENUE. 
‘‘(a) SECRETARY TO MAKE ALLOCATION OF SALES 
TAX REVENUE.—The Secretary shall allocate the revenue 
received by virtue of the tax imposed by section 101 in 
accordance with this section. The revenue shall be allo-
cated among— 
‘‘(1) the general revenue, 
‘‘(2) the old-age and survivors insurance trust 
fund, 
‘‘(3) the disability insurance trust fund, 
‘‘(4) the hospital insurance trust fund, and 
‘‘(5) the Federal supplementary medical insur-
ance trust fund. 
‘‘(b) GENERAL RULE.— 
‘‘(1) GENERAL REVENUE.—The proportion of 
total revenue allocated to the general revenue shall 
be the same proportion as the rate in section 
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101(b)(4) bears to the combined Federal tax rate 
percentage (as defined in section 101(b)(3)). 
‘‘(2) The amount of revenue allocated to the 
old-age and survivors insurance and disability insur-
ance trust funds shall be the same proportion as the 
old-age, survivors and disability insurance rate (as 
defined in subsection (d)) bears to the combined 
Federal tax rate percentage (as defined in section 
101(b)(3)). 
‘‘(3) The amount of revenue allocated to the 
hospital insurance and Federal supplementary med-
ical insurance trust funds shall be the same propor-
tion as the hospital insurance rate (as defined in 
subsection (e)) bears to the combined Federal tax 
rate percentage (as defined in section 101(b)(3)). 
‘‘(c) CALENDAR YEAR 2017.—Notwithstanding sub-
section (b), the revenue allocation pursuant to subsection 
(a) for calendar year 2017 shall be as follows: 
‘‘(1) 64.83 percent of total revenue to general 
revenue, 
‘‘(2) 27.43 percent of total revenue to the old- 
age and survivors insurance and disability insurance 
trust funds, and 
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‘‘(3) 7.74 percent of total revenue to the hos-
pital insurance and Federal supplementary medical 
insurance trust funds. 
‘‘(d) OLD-AGE, SURVIVORS AND DISABILITY INSUR-
ANCE RATE.—The old-age, survivors and disability insur-
ance rate shall be determined by the Social Security Ad-
ministration. The old-age, survivors and disability insur-
ance rate shall be that sales tax rate which is necessary 
to raise the same amount of revenue that would have been 
raised by imposing a 12.4 percent tax on the Social Secu-
rity wage base (including self-employment income) as de-
termined in accordance with chapter 21 of the Internal 
Revenue Code most recently in effect prior to the enact-
ment of this Act. The rate shall be determined using actu-
arially sound methodology and announced at least 6 
months prior to the beginning of the calendar year for 
which it applies. 
‘‘(e) HOSPITAL INSURANCE RATE.—The hospital in-
surance rate shall be determined by the Social Security 
Administration. The hospital insurance rate shall be that 
sales tax rate which is necessary to raise the same amount 
of revenue that would have been raised by imposing a 2.9 
percent tax on the Medicare wage base (including self-em-
ployment income) as determined in accordance with chap-
ter 21 of the Internal Revenue Code most recently in effect 
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113 
prior to the enactment of this Act. The rate shall be deter-
mined using actuarially sound methodology and an-
nounced at least 6 months prior to the beginning of the 
calendar year for which it applies. 
‘‘(f) ASSISTANCE.—The Secretary shall provide such 
technical assistance as the Social Security Administration 
shall require to determine the old-age, survivors and dis-
ability insurance rate and the hospital insurance rate. 
‘‘(g) FURTHER ALLOCATIONS.— 
‘‘(1) OLD-AGE, SURVIVORS AND DISABILITY IN-
SURANCE.—The Secretary shall allocate revenue re-
ceived because of the old-age, survivors and dis-
ability insurance rate to the old-age and survivors 
insurance trust fund and the disability insurance 
trust fund in accordance with law or, in the absence 
of other statutory provision, in the same proportion 
that the old-age and survivors insurance trust fund 
receipts bore to the sum of the old-age and survivors 
insurance trust fund receipts and the disability in-
surance trust fund receipts in calendar year 2016 
(taking into account only receipts pursuant to chap-
ter 21 of the Internal Revenue Code). 
‘‘(2) HOSPITAL
INSURANCE.—The Secretary 
shall allocate revenue received because of the hos-
pital insurance rate to the hospital insurance trust 
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114 
fund and the Federal supplementary medical insur-
ance trust fund in accordance with law or, in the ab-
sence of other statutory provision, in the same pro-
portion that hospital insurance trust fund receipts 
bore to the sum of the hospital insurance trust fund 
receipts and Federal supplementary medical insur-
ance trust fund receipts in calendar year 2016 (tak-
ing into account only receipts pursuant to chapter 
21 of the Internal Revenue Code). 
‘‘SEC. 905. WITHHOLDING OF TAX ON NONRESIDENT ALIENS 
AND FOREIGN CORPORATIONS. 
‘‘(a) IN GENERAL.—All persons, in whatever capacity 
acting (including lessees or mortgagors or real or personal 
property, fiduciaries, employers, and all officers and em-
ployees of the United States) having control, receipt, cus-
tody, disposal, or payment of any income to the extent 
such income constitutes gross income from sources within 
the United States of any nonresident alien individual, for-
eign partnership, or foreign corporation shall deduct and 
withhold from that income a tax equal to 23 percent there-
of. 
‘‘(b) EXCEPTION.—No tax shall be required to be de-
ducted from interest on portfolio debt investments. 
‘‘(c) TREATY COUNTRIES.—In the case of payments 
to nonresident alien individuals, foreign partnerships, or 
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115 
foreign corporations that have a residence in (or the na-
tionality of a country) that has entered into a tax treaty 
with the United States, then the rate of withholding tax 
prescribed by the treaty shall govern.’’. 
SEC. 202. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) REPEALS.—The following provisions of the Inter-
nal Revenue Code of 1986 are repealed: 
(1) Subchapter A of chapter 61 of subtitle D 
(as redesignated by section 104) (relating to infor-
mation and returns). 
(2) Sections 6103 through 6116 of subchapter 
B of chapter 61 of subtitle D (as so redesignated). 
(3) Section 6157 (relating to unemployment 
taxes). 
(4) Section 6163 (relating to estate taxes). 
(5) Section 6164 (relating to corporate taxes). 
(6) Section 6166 (relating to estate taxes). 
(7) Section 6167 (relating to foreign expropria-
tion losses). 
(8) Sections 6201, 6205, and 6207 (relating to 
assessments). 
(9) Subchapter C of chapter 63 of subtitle D 
(as so redesignated) (relating to tax treatment of 
partnership items). 
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(1) Section 6151 is amended by striking sub-
section (b) and by redesignating subsection (c) as 
subsection (b). 
(2) Section 6161 is amended to read as follows: 
‘‘SEC. 6161. EXTENSION OF TIME FOR PAYING TAX. 
‘‘The Secretary, except as otherwise provided in this 
title, may extend the time for payment of the amount of 
the tax shown or required to be shown on any return, re-
port, or declaration required under authority of this title 
for a reasonable period not to exceed 6 months (12 months 
in the case of a taxpayer who is abroad).’’. 
(3) Section 6211(a) is amended— 
(A) by striking ‘‘income, estate and gift 
taxes imposed by subtitles A and B and’’, 
(B) by striking ‘‘subtitle A or B, or’’, and 
(C) by striking ‘‘, as defined in subsection 
(b)(2),’’ in paragraph (2). 
(4) Section 6211(b) is amended to read as fol-
lows: 
‘‘(b) REBATE DEFINED.—For purposes of subsection 
(a)(2), the term ‘rebate’ means so much of an abatement, 
credit, refund, or other payment, as was made on the 
ground that the tax imposed by chapter 41, 42, 43, or 
44 was less than the excess of the amount specified in 
subsection (a)(1) over the rebates previously made.’’. 
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(5) Section 6212(b) is amended to read as fol-
lows: 
‘‘(b) ADDRESS FOR NOTICE OF DEFICIENCY.—In the 
absence of notice to the Secretary under section 6903 of 
the existence of a fiduciary relationship, notice of a defi-
ciency in respect of a tax imposed by chapter 42, 43, or 
44 if mailed to the taxpayer at his last known address, 
shall be sufficient for purposes of such chapter and this 
chapter even if such taxpayer is deceased, or is under a 
legal disability, or, in the case of a corporation has termi-
nated its existence.’’. 
(6) Section 6302(b) is amended by striking 
‘‘21,’’. 
(7) Section 6302 is amended by striking sub-
sections (g) and (i) and by redesignating subsection 
(h) as subsection (g). 
(8) Section 6325 is amended by striking sub-
section (c) and by redesignating subsections (d) 
through (h) as subsections (c) through (g), respec-
tively. 
(9) Section 6402(d) is amended by striking 
paragraph (3). 
(10) Section 6402 is amended by striking sub-
section (j) and by redesignating subsection (k) as 
subsection (j). 
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122 
(11) Section 6501(b) is amended— 
(A) by striking ‘‘except tax imposed by 
chapter 3, 21, or 24,’’ in paragraph (1), and 
(B) by striking paragraph (2) and by re-
designating paragraphs (3) and (4) as para-
graphs (2) and (3), respectively. 
(12) Section 6501(c) is amended by striking 
paragraphs (5) through (9). 
(13) Section 6501(e) is amended by striking 
‘‘subsection (c)—’’ and all that follows through 
‘‘subtitle D’’ in paragraph (3) and inserting ‘‘sub-
section (c), in the case of a return of a tax imposed 
under a provision of subtitle B’’. 
(14) Section 6501 is amended by striking sub-
sections (f) through (k) and subsections (m) and (n) 
and by redesignating subsection (1) as subsection 
(f). 
(15) Section 6503(a) is amended— 
(A) by striking paragraph (2), 
(B) by striking ‘‘DEFICIENCY.—’’ and all 
that follows through ‘‘The running’’ and insert-
ing ‘‘DEFICIENCY.—The running’’, and 
(C) by striking ‘‘income, estate, gift and’’. 
(16) Section 6503 is amended by striking sub-
sections (e), (f), (i), and (k) and by redesignating 
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123 
subsections (g), (h), and (j) as subsections (e), (f), 
and (g), respectively. 
(17) Section 6511 is amended by striking sub-
sections (d) and (g) and by redesignating sub-
sections (f) and (h) as subsections (d) and (e), re-
spectively. 
(18) Section 6512(b)(1) is amended by striking 
‘‘of income tax for the same taxable year, of gift tax 
for the same calendar year or calendar quarter, of 
estate tax in respect of the taxable estate of the 
same decedent or’’. 
(19) Section 6513 is amended— 
(A) by striking ‘‘(a) EARLY RETURN OR 
ADVANCE PAYMENT OF TAX.—’’, and 
(B) by striking subsections (b) and (e). 
(20) Chapter 67 is amended by striking sub-
chapters A through D and inserting the following: 
‘‘SEC. 6601. INTEREST ON OVERPAYMENTS AND UNDER-
PAYMENT. 
‘‘(a) UNDERPAYMENTS.—If any amount of tax im-
posed by this title is not paid on or before the last date 
prescribed for payment, interest on such amount at the 
Federal short-term rate (as defined in section 511(b)) 
shall be paid from such last date to the date paid. 
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‘‘(b) OVERPAYMENTS.—Interest shall be allowed and 
paid upon any overpayment in respect of any internal rev-
enue tax at the Federal short-term rate (as defined in sec-
tion 511(b)) from 60 days after the date of the overpay-
ment until the date the overpayment is refunded.’’. 
(21) Section 6651(a)(1) is amended by striking 
‘‘subchapter A of chapter 61 (other than part III 
thereof,’’. 
(22) Section 6656 is amended by striking sub-
section (c) and by redesignating subsection (d) as 
subsection (c). 
(23) Section 6663 is amended by striking sub-
section (c). 
(24) Section 6664(c) is amended— 
(A) by striking ‘‘Exception.—’’ and all 
that follows through ‘‘No penalty’’ and insert-
ing ‘‘Exception.—No penalty’’, and 
(B) by striking paragraphs (2) and (3). 
(25) Chapter 72 is amended by striking all 
matter preceding section 7011. 
(26) Section 7422 is amended by striking sub-
sections (h) and (i) and by redesignating subsections 
(j) and (k) as subsections (h) and (i), respectively. 
(27) Section 7451 is amended to read as fol-
lows: 
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‘‘SEC. 7451. FEE FOR FILING PETITION. 
‘‘The Tax Court is authorized to impose a fee in an 
amount not in excess of $60 to be fixed by the Tax Court 
for the filing of any petition for the redetermination of 
a deficiency.’’. 
(28) Section 7454 is amended by striking sub-
section (b) and by redesignating subsection (c) as 
subsection (b). 
(29) Section 7463(a) is amended— 
(A) by striking paragraphs (2) and (3), 
(B) by redesignating paragraph (4) as 
paragraph (2), and 
(C) by striking ‘‘D’’ in paragraph (2) (as 
so redesignated) and inserting ‘‘B’’. 
(30) Section 7463(c) is amended by striking 
‘‘sections 6214(a) and’’ and inserting ‘‘section’’. 
(31) Section 7463(c) is amended by striking ‘‘, 
to the extent that the procedures described in sub-
chapter B of chapter 63 apply’’. 
(32) Section 7481 is amended by striking sub-
section (d). 
(33) Section 7608 is amended by striking ‘‘sub-
title E’’ each place it appears and inserting ‘‘subtitle 
C’’. 
(34) Section 7651 is amended by striking para-
graph (5). 
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126 
(35) Section 7701(a)(29) is amended by strik-
ing ‘‘1986’’ and inserting ‘‘2013’’. 
(36) Section 7809(c) is amended by striking 
paragraphs (1) and (4) and by redesignating para-
graphs (2) and (3) as paragraphs (1) and (2), re-
spectively. 
(37) Section 7871(a) is amended by striking 
paragraphs (1) and (3) through (6) and by redesig-
nating paragraphs (2) and (7) as paragraphs (1) 
and (2), respectively. 
(38) Section 7871 is amended by striking sub-
section (c) and by redesignating subsections (d) and 
(e) as subsections (c) and (d), respectively. 
(39) Section 8021 is amended by striking sub-
section (a) and by redesignating subsections (b) 
through (f) as subsections (a) through (e), respec-
tively. 
(40) Section 8022(a)(2)(A) is amended by 
striking ‘‘, particularly the income tax’’. 
(41) Section 8023 is amended by striking ‘‘In-
ternal Revenue Service’’ each place it appears and 
inserting ‘‘Department of the Treasury’’. 
(42) Section 9501(b)(2) is amended by striking 
subparagraph (C). 
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127 
(43) Section 9702(a) is amended by striking 
paragraph (4). 
(44) Section 9705(a) is amended by striking 
paragraph (4) and by redesignating paragraph (5) 
as paragraph (4). 
(45) Section 9706(d)(2)(A) is amended by 
striking ‘‘6103’’ and inserting ‘‘605(e)’’. 
(46) Section 9707 is amended by striking sub-
section (f). 
(47) Section 9712(d) is amended by striking 
paragraph (5) and by redesignating paragraph (6) 
as paragraph (5). 
(48) Section 9803(a) is amended by striking 
‘‘(as defined in section 414(f))’’. 
TITLE III—OTHER MATTERS 
SEC. 301. PHASE-OUT OF ADMINISTRATION OF REPEALED 
FEDERAL TAXES. 
(a) APPROPRIATIONS.—Appropriations for any ex-
penses of the Internal Revenue Service including proc-
essing tax returns for years prior to the repeal of the taxes 
repealed by title I of this Act, revenue accounting, man-
agement, transfer of payroll and wage data to the Social 
Security Administration for years after fiscal year 2019 
shall not be authorized. 
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(b) RECORDS.—Federal records related to the admin-
istration of taxes repealed by title I of this Act shall be 
destroyed by the end of fiscal year 2019, except that any 
records necessary to calculate Social Security benefits 
shall be retained by the Social Security Administration 
and any records necessary to support ongoing litigation 
with respect to taxes owed or refunds due shall be retained 
until final disposition of such litigation. 
(c) CONFORMING AMENDMENTS.—Section 7802 is 
amended— 
(1) by striking subsections (a) and (b) and by 
redesignating subsections (c) and (d) as subsections 
(a) and (b), 
(2) by striking ‘‘Internal Revenue Service’’ each 
place it appears and inserting ‘‘Department of the 
Treasury’’, and 
(3) by striking ‘‘Commissioner’’ or ‘‘Commis-
sioner of Internal Revenue’’ each place they appear 
and inserting ‘‘Secretary’’. 
(d) EFFECTIVE DATE.—The amendments made by 
subsection (c) shall take effect on January 1, 2019. 
SEC. 302. ADMINISTRATION OF OTHER FEDERAL TAXES. 
(a) IN GENERAL.—Section 7801 (relating to the au-
thority of the Department of the Treasury) is amended 
by adding at the end the following: 
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‘‘(d) EXCISE TAX BUREAU.—There shall be in the 
Department of the Treasury an Excise Tax Bureau to ad-
minister those excise taxes not administered by the Bu-
reau of Alcohol, Tobacco and Firearms. 
‘‘(e) SALES TAX BUREAU.—There shall be in the De-
partment of the Treasury a Sales Tax Bureau to admin-
ister the national sales tax in those States where it is re-
quired pursuant to section 404, and to discharge other 
Federal duties and powers relating to the national sales 
tax (including those required by sections 402, 403, and 
405). The Office of Revenue Allocation shall be within the 
Sales Tax Bureau.’’. 
(b) 
ASSISTANT
GENERAL
COUNSELS.—Section 
7801(b)(2) is amended to read as follows: 
‘‘(2) ASSISTANT
GENERAL
COUNSELS.—The 
Secretary of the Treasury may appoint, without re-
gard to the provisions of the civil service laws, and 
fix the duties of not more than 5 assistant general 
counsels.’’. 
SEC. 303. SALES TAX INCLUSIVE SOCIAL SECURITY BENE-
FITS INDEXATION. 
Subparagraph (D) of section 215(i)(1) of the Social 
Security Act (42 U.S.C. 415(i)(1)) (relating to cost-of-liv-
ing increases in Social Security benefits) is amended to 
read as follows: 
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‘‘(D)(i) the term ‘CPI increase percentage’, 
with respect to a base quarter or cost-of-living quar-
ter in any calendar year, means the percentage 
(rounded to the nearest one-tenth of 1 percent) by 
which the Consumer Price Index for that quarter (as 
prepared by the Department of Labor) exceeds such 
index for the most recent prior calendar quarter 
which was a base quarter under subparagraph 
(A)(ii) or, if later, the most recent cost-of-living 
computation quarter under subparagraph (B); 
‘‘(ii) if the Consumer Price Index (as so pre-
pared) does not include the national sales tax paid, 
then the term ‘CPI increase percentage’, with re-
spect to a base quarter or cost-of-living quarter in 
any calendar year, means the percentage (rounded 
to the nearest one-tenth of 1 percent) by which the 
product of— 
‘‘(I) the Consumer Price Index for that 
quarter (as so prepared), and 
‘‘(II) the national sales tax factor, 
exceeds such index for the most recent prior cal-
endar quarter which was a base quarter under sub-
paragraph (A)(ii) or, if later, the most recent cost 
of living computation quarter under subparagraph 
(B); and 
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‘‘(iii) the national sales tax factor is equal to 
one plus the quotient that is— 
‘‘(I) the sales tax rate imposed by section 
101 of the Internal Revenue Code of 2015, di-
vided by 
‘‘(II) the quantity that is one minus such 
sales tax rate.’’. 
TITLE 
IV—SUNSET 
OF 
SALES 
TAX IF SIXTEENTH AMEND-
MENT NOT REPEALED 
SEC. 401. ELIMINATION OF SALES TAX IF SIXTEENTH 
AMENDMENT NOT REPEALED. 
If the Sixteenth Amendment to the Constitution of 
the United States is not repealed before the end of the 
7-year period beginning on the date of the enactment of 
this Act, then all provisions of, and amendments made by, 
this Act shall not apply to any use or consumption in any 
year beginning after December 31 of the calendar year 
in which or with which such period ends, except that the 
Sales Tax Bureau of the Department of the Treasury shall 
not be terminated until 6 months after such December 31. 
Æ 
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