the tax imposed by section 3901 on taxable transactions
having a tax point within such taxable period.
‘‘(b) CREDIT ALLOWED FOR TAXABLE PERIOD IN
WHICH PURCHASER RECEIVES INVOICE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a credit allowable by section 3916 with
respect to a transaction may be allowed only for the
first taxable period by the close of which the tax-
payer—
‘‘(A) has paid or accrued amounts properly
allocable to the tax imposed by section 3901
with respect to such transaction, and
‘‘(B) has a tax invoice (or equivalent) with
respect to such transaction.
‘‘(2) USE FOR LATER PERIOD.—Under regula-
tions, a credit allowable by section 3916 may be al-
lowed for a period after the period set forth in para-
graph (1).
‘‘(c) TAXABLE PERIOD.—For purposes of this chap-
ter—
‘‘(1) IN GENERAL.—The term ‘taxable period’
means a calendar quarter.
‘‘(2) EXCEPTION.—
‘‘(A) ELECTION OF 1-MONTH PERIOD.—If
the taxpayer so elects, the term ‘taxable period’
means a calendar month.
‘‘(B) OTHER PERIODS.—To the extent pro-
vided in regulations, the term ‘taxable period’
includes a period, other than a calendar quarter
or month, selected by the taxpayer.
‘‘(d) TAX POINT.—For purposes of this chapter—
‘‘(1) CHAPTER
RULES
WITH
RESPECT
TO
SELLER GOVERN.—Except as provided in paragraph
(2), the tax point for any sale of property or services
is the earlier of—
‘‘(A) the time (or times) when any income
from the sale should be treated by the seller as
received or accrued (or any loss should be taken
into account by the seller) for purposes of chap-
ter 1, or
‘‘(B) the time (or times) when the seller
receives payment for the sale.
‘‘(2) IMPORTS.—In the case of the importing of
property, the tax point is when the property is en-
tered, or withdrawn from warehouse, for consump-
tion in the United States.
‘‘(e) MONTHLY DEPOSITS REQUIRED.—To the extent
provided in regulations, monthly deposits may be required
of the estimated liability for any taxable period for the
tax imposed by section 3901.
‘‘SEC. 3925. TREATMENT OF RELATED BUSINESSES, ETC.
‘‘(a) GENERAL RULE.—For purposes of this chapter
(other than section 3923), to the extent provided in regu-
lations, the taxpayer may elect—
‘‘(1) to treat as 1 taxable person 2 or more
businesses which may be treated under section 52(b)
as 1 employer, and
‘‘(2) to treat as separate taxable persons sepa-
rate divisions of the same business.
‘‘(b) DE MINIMUS EXEMPTION.—For purposes of
section 3923, all businesses which are under common con-
trol (within the meaning of section 52(b)) shall be treated
as 1 business.
‘‘SEC. 3926. SECRETARY TO BE NOTIFIED OF CERTAIN
EVENTS.
‘‘To the extent provided in regulations, each person
engaged in a business shall notify the Secretary (at such
time or times as may be prescribed by such regulations)
of any change in the form in which a business is conducted
or any other change which might affect the liability for
the tax imposed by section 3901 or the amount of such
tax or any credit against such tax, or otherwise affect the
administration of such tax in the case of such person.
‘‘SEC. 3927. REGULATIONS.
‘‘The Secretary shall prescribe such regulations as
may be necessary to carry out the purposes of this chap-
ter.
‘‘Subchapter E—Definitions and Special
Rules; Treatment of Certain Transactions
‘‘Sec. 3931. Definitions.
‘‘Sec. 3932. Special rules.
‘‘Sec. 3933. Personal use by owner of business property or serv-
ices.
‘‘Sec. 3934. Gift of business property or services.
‘‘Sec. 3935. Special rules for dispositions of nonbusiness real
property.
‘‘Sec. 3936. Special rule for insurance contracts.
‘‘SEC. 3931. DEFINITIONS.
‘‘(a) PROPERTY.—For purposes of this chapter, the
term ‘property’ means any tangible property.
‘‘(b) BUSINESS.—For purposes of this chapter, the
term ‘business’ includes—
‘‘(1) a trade, and
‘‘(2) an activity regularly carried on for profit.
‘‘(c) EMPLOYEE.—For purposes of this chapter, the
term ‘employee’ has the meaning such term has for pur-
poses of chapter 24 (relating to withholding).
‘‘(d) PERSON.—For purposes of this chapter, the
term ‘person’ includes any governmental entity.
‘‘(e) BUSINESS DAY.—For purposes of this chapter,
the term ‘business day’ means any day other than Satur-
day and Sunday and other than a legal holiday (within
the meaning of section 7503).
‘‘(f) UNITED STATES.—For purposes of this chapter,
the term ‘United States’, when used in a geographical
sense, includes a Commonwealth and any possession of the
United States.
‘‘SEC. 3932. SPECIAL RULES.
‘‘(a) COORDINATION WITH SUBTITLE A.—For pur-
poses of subtitle A—
‘‘(1) TREATMENT OF CREDIT.—Any credit al-
lowable to a taxpayer under section 3916 which is
attributable to any property or services shall be
treated as a reduction in the amount paid or in-
curred by the taxpayer for such property or services.
‘‘(2) AMOUNT OF DEDUCTION FOR TAX.—The
amount allowable as a deduction for the tax imposed
by section 3901 shall be determined without regard
to any credit allowable under section 3916.
‘‘(3) COMPUTATION
OF
PERCENTAGE
DEPLE-
TION.—For purposes of sections 613 and 613A—
‘‘(A) gross income shall be reduced by the
amount of the tax imposed by section 3901,
and
‘‘(B) taxable income shall be determined
without regard to any deduction allowed for
such tax.
‘‘(b) SPECIAL RULE SALE OF PROPERTY INCLUDES INCI-
DENTAL PERFORMANCE OF SERVICES.—For purposes of
this chapter, if in connection with the sale of any property
there is an incidental performance of services, such per-
formance of services shall be treated as part of the sale
of such property.
‘‘(c) SPECIAL RULE WHERE PERFORMANCE
OF
SERVICES INCLUDES INCIDENTAL TRANSFER OF PROP-
ERTY.—For purposes of this chapter, if in connection with
the performance of any services there is an incidental
transfer of property, such transfer shall be treated as part
of the performance of such services.
‘‘(d) AUTHORITY
TO
ZERO
RATE
DE
MINIMIS
TRANSACTIONS, ETC.—The Secretary may prescribe regu-
lations providing that the rate of tax shall be zero for a
taxable transaction (or category of such transactions)
where—
‘‘(1) the amount involved is de minimis, or
‘‘(2) the revenue raised by taxing the trans-
action is not sufficient to justify the administrative
and other costs involved in the payment and collec-
tion of the tax.
‘‘(e) IMPORTING TREATED
AS SALE
AND PUR-
CHASE.—For purposes of this chapter, the importing of
any property into the United States shall be treated as
both a sale and purchase of such property by the person
importing such property.
‘‘(f) SUBCHAPTER S CORPORATION TREATED
AS
NOT A CORPORATION.—For purposes of this chapter, an
S corporation (as defined in section 1361(a)) shall be
treated as a person which is not a corporation.
‘‘(g) USE INCLUDES HELD FOR USE.—For purposes
of this chapter, property and services held for use by any
person shall be treated as used by the person.
‘‘SEC. 3933. PERSONAL USE BY OWNER OF BUSINESS PROP-
ERTY OR SERVICES.
‘‘(a) GENERAL RULE.—If any business property or
services are used by an owner of the taxpayer for personal
purposes, for purposes of this chapter such use shall be
treated as a taxable transaction.
‘‘(b) TAXABLE AMOUNT.—In the case of a use de-
scribed in subsection (a), for purposes of this chapter, the
taxable amount shall be—
‘‘(1) except as provided in paragraph (2), the
fair market value of the property or the services, or
‘‘(2) if such use is only the temporary use of
property, the fair rental value of such use.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) BUSINESS PROPERTY OR SERVICES.—The
term ‘business property or services’ means any prop-
erty or services if a sale of such property, or the per-
formance of such services, by the taxpayer would be
a taxable transaction.
‘‘(2) OWNER.—The term ‘owner’ means—
‘‘(A) in the case of a sole proprietorship,
the proprietor,
‘‘(B) in the case of any other business en-
terprise, any holder of a beneficial interest in
the corporation, partnership, or other entity,
and
‘‘(C) any member of the family (within the
meaning of section 267(c)(4)) of an individual
described in subparagraph (A) or (B).
‘‘SEC. 3934. GIFT OF BUSINESS PROPERTY OR SERVICES.
‘‘(a) GENERAL RULE.—In the case of any gift of
business property or services, for purposes of this chap-
ter—
‘‘(1) such gift shall be treated as a taxable
transaction, and
‘‘(2) the taxable amount shall be the amount
determined under section 3933(b).
‘‘(b) GIFTS RELATED TO BUSINESS PROMOTION AC-
TIVITIES.—For purposes of subsection (a), the term ‘gift’
includes any gift of property or services transferred in con-
nection with business promotion activities.
‘‘SEC. 
3935. 
SPECIAL 
RULES 
FOR 
DISPOSITIONS 
OF
NONBUSINESS REAL PROPERTY.
‘‘(a) IN GENERAL.—In the case of any sale of real
property which is treated as a commercial-type transaction
solely by reason of section 3904(b)(1)(A), for purposes of
this chapter, the taxable amount shall be the excess (if
any) of—
‘‘(1) the amount realized on such sale, over
‘‘(2) the adjusted cost to the taxpayer of such
real property.
‘‘(b) ADJUSTED COST.—For purposes of subsection
(a)—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the term ‘adjusted cost’ means, with re-
spect to any property, the basis of such property in-
creased by expenditures properly chargeable to cap-
ital account (other than taxes or other carrying
charges described in section 266) for periods during
the holding period for such property.
‘‘(2) TRANSITIONAL RULE.—The adjusted cost
of any property shall include only amounts incurred
during periods after December 31, 1993.
‘‘(c) VALUE ADDED TAX NOT TAKEN INTO AC-
COUNT.—For purposes of this section, the amount realized
on any sale of real property shall not include any amount
attributable to the tax imposed by this chapter.
‘‘SEC. 3936. SPECIAL RULE FOR INSURANCE CONTRACTS.
‘‘In the case of any contract of insurance, for pur-
poses of this chapter, the taxable amount is the excess
of—
‘‘(1) the portion of the premium attributable to
insurance coverage, over
‘‘(2) the actuarial cost to the insurer of provid-
ing such insurance coverage.’’
(b) CLERICAL AMENDMENT.—The table of chapters
for subtitle D of the Internal Revenue Code of 1986 is
amended by inserting before the item relating to chapter
31 the following:
‘‘CHAPTER 30. Value added tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to transactions occurring after
December 31, 1995.
SEC. 1002. REVENUE FROM VALUE ADDED TAX TO FUND
NATIONAL HEALTH CARE TRUST FUND.
(a) IN GENERAL.—Subchapter A of chapter 98 of the
Internal Revenue Code of 1986 (relating to trust fund
code) is amended by adding at the end the following new
section:
‘‘SEC. 9511. NATIONAL HEALTH CARE TRUST FUND.
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘National Health Care Trust Fund’,
consisting of such amounts as may be appropriated or
credited to the Trust Fund as provided in this section or
section 9602(b).
‘‘(b) TRANSFERS TO TRUST FUND.—There are here-
by appropriated to the National Health Care Trust Fund
amounts equivalent to amounts received in the Treasury
from the tax imposed under section 3901 of the Internal
Revenue Code of 1986 (relating to the value added tax).
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts
in the National Health Care Trust Fund shall be available
only for purposes of making expenditures to carry out the
program of health benefits under the National Health In-
surance Act.’’
(b) CLERICAL AMENDMENT.—The table of sections
for such subchapter A is amended by adding at the end
the following new item:
‘‘Sec. 9511. National Health Care Trust Fund.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on January 1, 1996.
TITLE XI—STUDY AND DEVELOP-
MENT 
OF 
COST 
CONTROL
MECHANISMS
SEC. 1101. DEVELOPMENT OF COST CONTROL MECHA-
NISMS.
(a) STUDY.—The Secretary of Health and Human
Services shall conduct a study analyzing various methods
to control the costs of providing personal health benefits
under this Act, and shall include in such study an analysis
of the effects on such costs of medical malpractice claims
and the purchase of medical malpractice liability insurance
by providers of the benefits.
(b) REPORTS TO CONGRESS.—Not later than Octo-
ber 1, 1997, the Secretary shall submit a report to Con-
gress describing the study conducted under subsection (a),
and shall include in the report recommendations on meth-
ods to control costs under this Act, including recommenda-
tions on the development of a system under which medical
malpractice claims brought against providers of benefits
under this Act may be resolved in an equitable and cost-
effective manner. Not later than April 1, 1998, the Sec-