have payment made thereunder for items or services of
the type involved; and shall also be considered ineligible
under part A or B of such title XVIII with respect to any
item or service (for which he is otherwise entitled to have
payment made thereunder) to the extent that payment is
not made with respect to such item or service because of
the application of the deductible and coinsurance provi-
sions of sections 1813 and 1833 of the Social Security
Act.
(b) The Board, after consultation with the Advisory
Council, shall prescribe such regulations as may be nec-
essary or appropriate to insure, in the case of individuals
whose benefits under this Act are limited under subsection
(a), that the combination of benefits under this Act and
title XVIII of the Social Security Act will effectively carry
out (without duplication of benefits) the purpose of this
Act.
(c) The limitation under subsection (a) of an individ-
ual’s benefits under this Act shall not be construed as af-
fecting the eligibility of his dependents for such benefits
in accordance with subsection (a)(3) or (b)(3) of section
104.
STUDY AND REPORT
SEC. 702. As soon as practicable after the enactment
of this Act the Secretary of Health and Human Services
shall undertake and carry out a full and complete study
of the interrelationship of the program of national health
insurance under this Act and the program of health insur-
ance for the aged under title XVIII of the Social Security
Act, in order to determine the way in which the latter pro-
gram may be most effectively and equitably transferred
to and incorporated in the program under this Act. In con-
ducting such study, the Secretary shall give particular at-
tention to the transitional problems which would result
from such a transfer, and shall consider in detail (with
respect to each such program) the benefits provided, the
standards of eligibility therefor, the standards and quali-
fications for participation by providers of services of var-
ious types, the methods of administration, the costs and
methods of financing, and any other matters which might
assist in making such determination and in insuring that
all desirable features of the program under title XVIII of
the Social Security Act will to the maximum extent fea-
sible be preserved with respect to the individuals covered
by that program (and, in appropriate cases, included in
the program under this Act for all individuals who are eli-
gible thereunder, without regard to any transfer). The
Secretary shall submit to the President and the Congress,
no later than one year after the date of the enactment
of this Act, a complete report of the study conducted
under this section together with his findings as to the most
effective and equitable way in which the transfer under
consideration could be effected and his detailed rec-
ommendations for legislative, administrative, and other ac-
tions to accomplish it.
TITLE VIII—FISCAL PROVISIONS
USE OF TRUST FUND
SEC. 801. (a) Funds in the National Health Care
Trust Fund shall be available for all expenditures nec-
essary or appropriate to carry out this Act; except that
(subject to the provisions of section 802(g)) only so much
of such funds shall be available for salaries or other ad-
ministrative expenses of any department or agency of the
United States as may be authorized in annual or other
appropriation Acts.
(b) Sums received as reimbursements to the account
pursuant to section 104(c) or section 105, or by virtue
of subrogation pursuant to section 104(c), shall be depos-
ited in the account and shall be available in accordance
with the provisions of subsection (a) of this section.
ALLOTMENT OF FUNDS
SEC. 802. (a) The Board, after consultation with the
Advisory Council, shall determine, as far in advance of the
beginning of each fiscal year as is possible, the sums which
shall be available from the Trust Fund for provision dur-
ing the fiscal year of all classes, and of each of the five
classes, of personal health-service benefits specified in sec-
tion 101(a). Such sums shall be determined, after taking
into consideration the estimated amount which will be in
the Trust Fund at the beginning of the fiscal year and
the anticipated income of the account thereafter, with a
view (1) to maintaining as nearly as practicable a uniform
rate of expenditure for personal health-service benefits in
successive fiscal years, except for appropriated allowance
on account of anticipated increase in the personnel and
facilities available to furnish personal health-service bene-
fits and on account of reduction or withdrawal of restric-
tions or limitations pursuant to section 102(b), and (2)
to establishing and maintaining a reserve in the Trust
Fund adequate to meet emergency demands in accordance
with subsection (d) of this section and adequate to main-
tain the rate of expenditure or to permit its gradual reduc-
tion if the income of the Trust Fund should fall below
the income which had been anticipated.
(b) In accordance with regulations prescribed after
consultation with the State agencies, the Board, prior to
the beginning of each fiscal year shall allot to the several
States, for the fiscal years 2000, 2001, and 2002, 90 per-
cent, and for each fiscal year thereafter 95 percent of each
sum determined pursuant to subsection (a). Such regula-
tions shall provide for allotments on the basis of—
(1) the population in the several States eligible
for benefits under this Act;
(2) professional and other personnel, hospitals,
and other facilities, and supplies and commodities,
to be available in the several States in the provision
of such benefits; and
(3) the cost of reasonable and equitable com-
pensation to such personnel and facilities and for
such supplies and commodities.
Such allotments shall operate, to the maximum extent pos-
sible, both to assure provision to eligible individuals of
adequate personal health-service benefits in all States and
all local health-service areas, and also to increase the ade-
quacy of services where personnel and facilities are below
the national average.
(c) From time to time during each fiscal year, the
Board shall allot to the several States the remaining 10
percent or the remaining 5 percent, as the case may be,
of each sum determined pursuant to subsection (a). In
making allotments under this subsection, the Board shall
take into consideration the factors specified in subsection
(b), but shall, in addition, give special consideration to the
extent of which allotments under subsection (b) have
proved to be insufficient to permit provision of reasonably
adequate benefits under this Act.
(d) In addition to the sums determined pursuant to
subsection (a) to be available for the provision of personal
health-service benefits, the Board, after consultation with
the Advisory Council, is authorized to make emergency al-
lotments from the account if it finds that a disaster, epi-
demic, or other cause has substantially increased the vol-
ume of personal health-service benefits required in any
part of the United States over the volume anticipated
when the determinations pursuant to subsection (a) were
made. Allotments pursuant to this subsection shall be
made to such State or States, for such class or classes
of personal health-service benefits, and in such amounts,
as the Board may find necessary to meet the emergency.
(e) The Board shall from time to time determine the
amounts to be paid to each State from its allotments
under this section, and shall certify to the Secretary of
the Treasury the amounts so determined. The Secretary
shall thereupon, and prior to audit or settlement by the
General Accounting Office, pay to the State the amounts
so certified.
(f) Funds paid to a State for any class of personal
health-service benefits shall be used exclusively for the
provision of benefits of that class, except that the adminis-
trative costs of the State in administering personal health-
service benefits under this Act may be met from the allot-
ments to the State. Such administrative costs, which in
any fiscal year shall not exceed 5 percent of the aggregate
allotments to the State for such fiscal year, shall be appor-
tioned as between the several allotments in accordance
with the costs of administering the respective classes of
benefits; and such apportionment may be made in such
manner, and by such sampling, statistical, or other meth-
ods, as may be agreed upon between the Board and the
State agency.
(g) In any case in which the Board has assumed re-
sponsibility for the administration in a State of benefits
under this Act in accordance with section 402 (d) or (e),
all allotments or balances of allotments to such State shall
be available for expenditure by the Board for the provision
of personal health-service benefits in that State, and (until
the Congress shall make funds available therefor pursuant
to section 801(a)) for the costs of administration of such
benefits in such State. Expenditures authorized pursuant
to section 801(a) for such costs of administration shall
be charged against allotments to such State.
GRANTS-IN-AID FOR TRAINING AND EDUCATION
SEC. 803. (a) For the purpose of increasing the avail-
ability of training and education for professional and tech-
by the Board for similar training or education, and
for costs of necessary travel.
(b) Such grants, in such amounts and for payment
at such times as are approved by the Board, shall be cer-
tified for payment to the Secretary of the Treasury, who
shall pay them from the account to the designated individ-
uals, institutions, or agencies.
(c) For the purposes of this section there shall be
available for the fiscal year 2000 the sum of $5,000,000,
for the fiscal year 2001 the sum of $5,000,000, and for
each fiscal year thereafter an amount not to exceed one-
half of 1 percent of the amount expended for benefits
under this Act in the last preceding calendar year.
TITLE IX—MISCELLANEOUS PROVISIONS
DEFINITION
SEC. 901. As used in this Act:
(1) The term ‘‘wages’’ means the sum of the following
items, excluding any amount in excess of the applicable
contribution and benefit base (as determined under section
230 of the Social Security Act with respect to the hospital
insurance tax) which is received (or, in the case of income
from self-employment, accrued) by any individual during
any calendar year—
(A) all remuneration for employment, including
the cash value of all remuneration paid in any me-
dium other than cash; except that such term does
not include—
(i) the amount of any payment made to, or
on behalf of, an employee under a plan or sys-
tem established by an employer which makes
provision for his employees generally or for a
class or classes of his employees (including any
amount paid by an employer for insurance or
annuities, or into a fund to provide for any
such payment), on account of retirement, or
sickness or accident disability, or medical and
hospitalization expenses in connection with sick-
ness or accident disability, or death; provided,
in the case of a death benefit, that the employee
(I) has not the option to receive, instead of pro-
vision for such death benefit, any part of such
payment or, if such death benefit is insured,
any part of the premiums (or contributions to
premiums) paid by his employer, and (II) has
not the right, under the provisions of the plan
or system or policy of insurance providing for
such death benefit, to assign such benefit, or to
receive a cash consideration in lieu of such ben-
efit either upon his withdrawal from the plan or
system providing for such benefit or upon ter-
mination of such plan or system or policy of in-
surance or of his employment with such em-
ployer;
(ii) the payment by an employer (without
deductions from the remuneration of the em-
ployee) of any social-insurance taxes or con-
tributions imposed upon an employee; or
(iii) the value of services exchanged for
other services for which there is no payment
other than the exchange; and
(B) all net income from farm, business, profes-
sional, or other self-employment.
(2) The term ‘‘employment’’ means any service of
whatever nature performed by an employee for the person
employing him, irrespective of the citizenship or residence
of either, within United States, or on or in connection with
an American vessel or an American civil aircraft under
a contract of service which is entered into within the
United States or during the performance of which the ves-
sel or aircraft touches at a port or airport in the United
States, if the employee is employed on and in connection
with such vessel or aircraft when outside the United
States, except—
(A) service on active duty in the Armed Forces
of the United States;
(B) service performed in the employ of a State
or any political subdivision thereof, or any instru-
mentality of any one or more of the foregoing which
is wholly owned by one or more States or political
subdivisions;
(C) casual labor not in the course of the em-
ployer’s trade or business;
(D) service performed by an employee on or in
connection with a vessel not an American vessel, or
an aircraft not an American aircraft, if the employee
is employed on and in connection with such vessel or
aircraft when outside the United States;
(E) service performed by a duly ordained or
duly commissioned or licensed minister of any
church in the regular exercise of his ministry and
service performed by a regular member of a religious
order in the exercise of duties required by such
order;
(F) service performed by an individual as an
employee or employee representative as defined in
section 1 of the Railroad Retirement Act of 1937 or
section 1 of the Railroad Retirement Act of 1974;
(G) service performance in any calendar quarter
in the employ of any organization exempt from in-
come tax under section 501 of the Internal Revenue
Code of 1986 if—
(i) the renumeration for such services does
not exceed $150; or
(ii) such service is in connection with the
collection of dues or premiums for a fraternal
beneficiary society, order, or association, and is
performed away from the home office or is rit-
ualistic service in connection with any such so-
ciety, order, or association; or
(iii) such service is performed by a student
who is enrolled and is regularly attending class-
es at a school, college, or university;
(H) service performed in the employ of a for-
eign government (including service as a consular or
other officer or employee or a nondiplomatic rep-
resentative);
(I) service performed in the employ of an in-
strumentality wholly owned by a foreign government,
if—
(i) the service is of a character similar to
that performed in foreign countries by employ-
ees of the United States Government or of an
instrumentality thereof; and
(ii) the Secretary of State shall certify to
the Secretary of Health and Human Services
that the foreign government, with respect to
whose instrumentality and employees thereof
exemption is claimed, grants an equivalent ex-
emption with respect to similar service per-
formed in the foreign country by employees of
the United States Government and of instru-
mentalities thereof; and
(J) service performed in the employ of an inter-
national organization entitled to enjoy privileges, ex-
emptions, and immunities as an international orga-
nization under the International Organizations Im-
munities Act.
(3) In any case in which an individual has received
wages equal to the applicable contribution and benefit base
(as determined under section 230 of the Social Security
Act), in a calendar year, not less than $500 of such wages
shall be deemed, for the purpose of section 104(a), to have
been received by him in the quarter during which the first
of such wages were in fact received by him and in each
quarter of such calendar year thereafter.
(4) The term ‘‘benefit year’’ means a period com-
mencing on July 1 of any year and ending on June 30
of the succeeding year.
(5) The term ‘‘quarter’’ and the term ‘‘calendar quar-
ter’’ mean a period of three calendar months ending on
March 31, June 30, September 30, or December 31.
(6) The term ‘‘employee’’ includes (in addition to any
individual who is a servant under the law of master and
servant) any individual who performs service, of whatever
nature, for a person, unless the service is performed by
the individual in pursuit of his own independently estab-
lished business. The term ‘‘employee’’ also includes an of-
ficer of a corporation.
(7) The term ‘‘American vessel’’ means any vessel
documented or numbered under the laws of the United
States; and includes any vessel which is neither docu-
mented nor numbered under the laws of any foreign coun-
try, if its crew is employed solely by one or more citizens
or residents of the United States or corporations orga-
nized under the laws of the United States or of any State.
(8) The term ‘‘American aircraft’’ means an aircraft
registered under the laws of the United States.
(9) The term ‘‘State’’ includes the District of Colum-
bia.
(10) The term ‘‘United States’’, when used in a geo-
graphic sense, means the several States, as defined in
paragraph (9).
‘‘SEC. 3903. TAXABLE TRANSACTION.
‘‘For purposes of this chapter, the term ‘taxable
transaction’ means—
‘‘(1) the sale of property in the United States,
‘‘(2) the performance of services in the United
States, and
‘‘(3) the importing of property into the United
States,
by a taxable person in a commercial-type transaction.
‘‘SEC. 3904. COMMERCIAL-TYPE TRANSACTION.
‘‘(a) GENERAL RULE.—For purposes of this chapter,
the term ‘commercial-type transaction’ means a trans-
action engaged in by—
‘‘(1) a corporation, or
‘‘(2) any person (other than a corporation) in
connection with a business.
‘‘(b) SALES AND LEASES OF REAL PROPERTY; IM-
PORTS.—For purposes of this chapter—
‘‘(1) IN GENERAL.—The term ‘commercial-type
transaction’ includes—
‘‘(A) any sale or leasing of real property,
and
‘‘(B) any importing of property,
whether or not such transaction is described in sub-
section (a).
‘‘(2) CERTAIN IMPORTED ARTICLES.—Notwith-
standing paragraph (1)(B), the importing of an arti-
cle which is free of duty under part 2 of schedule
8 of the Tariff Schedules of the United States shall
not be treated as a commercial-type transaction un-
less such transaction is described in subsection (a).
‘‘SEC. 3905. TAXABLE PERSON.
‘‘(a) GENERAL RULE.—Except as otherwise provided
in this chapter, for purposes of this chapter, the term ‘tax-
able person’ means a person who engages in a business
or in a commercial-type transaction.
‘‘(b) TREATMENT OF EMPLOYEES, ETC.—For pur-
poses of this chapter, an employee shall not be treated
as a taxable person with respect to activities engaged in
as an employee.
‘‘SEC. 3906. TRANSACTIONS IN THE UNITED STATES.
‘‘(a) SALES OF PROPERTY.—For purposes of this
chapter—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the sale of property shall be treated as
occurring where delivery takes place.
‘‘(2) REAL PROPERTY.—The sale of real prop-
erty shall be treated as occurring where the real
property is located.
‘‘(b) PERFORMANCE OF SERVICE.—For purposes of
this chapter—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, a service shall be treated as
occurring where it is performed.
‘‘(2) SERVICES PERFORMED INSIDE AND OUT-
SIDE
THE
UNITED
STATES.—If a service is per-
formed both inside and outside the United States,
such service shall be treated as performed—
‘‘(A) inside the United States, if 50 per-
cent or more of such service is performed inside
the United States, and
‘‘(B) outside the United States, if less than
50 percent of such service is performed inside
the United States.
‘‘SEC. 3907. RULES RELATING TO OTHER TERMS USED IN
SECTION 3903.
‘‘(a) EXCHANGES TREATED AS SALES.—For pur-
poses of this chapter—
‘‘(1) an exchange of property for property or
services shall be treated as a sale of property, and
‘‘(2) an exchange of services for property or
services shall be treated as the performance of serv-
ices.
‘‘(b) CERTAIN TRANSFERS TO EMPLOYEES TREATED
AS SALES.—For purposes of this chapter, the transfer of
property to an employee as compensation (other than a
transfer of a type for which no amount is includible in
the gross income of employees for purposes of chapter 1)
shall be treated as the sale of property.
‘‘(c) PERFORMANCE OF SERVICES.—For purposes of
this chapter—
‘‘(1) CERTAIN
ACTIVITIES
TREATED
AS
PER-
FORMANCE OF SERVICES.—Activities treated as in-
cluded in the performance of services shall include
(but shall not be limited to)—
‘‘(A) permitting the use of property,
‘‘(B) the granting of a right to the per-
formance of services or to reimbursement (in-
cluding the granting of warranties, insurance,
and similar items), and
‘‘(C) the making of a covenant not to com-
pete (or similar agreement to refrain from
doing something).
‘‘(2) EMPLOYERS AND EMPLOYEES.—
‘‘(A) SERVICES FOR EMPLOYER.—An em-
ployee’s services for his employer shall not be
treated as the performance of services.
‘‘(B) SERVICES FOR EMPLOYEE.—An em-
ployer’s services for his employee shall not be
treated as the performance of services unless
such services are of a type which constitute
gross income to the employee for purposes of
chapter 1.
‘‘(3) PERFORMANCE OF SERVICES TREATED AS
SALE OF SERVICES.—The performance of services
shall be treated as the sale of services.
‘‘Subchapter C—Taxable Amount; Rate of Tax
for Certain Transactions; Credit Against Tax
‘‘Sec. 3911. Taxable amount.
‘‘Sec. 3912. Zero rating for food, housing, and medical care.
‘‘Sec. 3913. Zero rating for exports and interest.
‘‘Sec. 3914. Governmental entities.
‘‘Sec. 3915. Exempt organizations.
‘‘Sec. 3916. Credit against tax.
‘‘SEC. 3911. TAXABLE AMOUNT.
‘‘(a) AMOUNT CHARGED CUSTOMER.—For purposes
of this chapter, the taxable amount for any transaction
for which money is the only consideration shall be the
price charged the purchaser of the property or services by
the seller thereof—
‘‘(1) including all invoiced charges for transpor-
tation, and other items payable to the seller with re-
spect to this transaction, but
‘‘(2) excluding the tax imposed by section 3901
with respect to this transaction and excluding any
State and local sales and use taxes with respect to
this transaction.
‘‘(b) EXCHANGES.—For purposes of this chapter, the
taxable amount in any exchange of property or services
shall be the fair market value of the property or services
transferred by the person liable for the tax (determined
as if such person had sold the property or services to the
other party to the exchange).
‘‘(c) IMPORTS.—For purposes of this chapter, the
taxable amount in the case of any import shall be—
‘‘(1) the customs value plus customs duties and
any other duties which may be imposed, or
‘‘(2) if there is no such customs value, the fair
market value (determined as if the importer had sold
the property).
‘‘(d) SPECIAL RULE IN THE CASE OF SALES OF CER-
TAIN USED CONSUMER GOODS.—For purposes of this
chapter, if—
‘‘(1) a taxable person acquires any tangible per-
sonal property in a transaction which was not a tax-
able transaction, and
‘‘(2) such property had been used by an ulti-
mate consumer before such acquisition,
the taxable amount in the case of any sale of such property
by such taxable person (determined without regard to this
subsection) shall be reduced by the amount paid for such
property by such taxable person.
‘‘SEC. 3912. ZERO RATING FOR FOOD, HOUSING, AND MEDI-
CAL CARE.
‘‘(a) ZERO RATING FOR FOOD, HOUSING, AND MEDI-
CAL CARE.—The rate of the tax imposed by section 3901
shall be zero with respect to the following:
‘‘(1) FOOD.—The retail sale of food and non-
alcoholic beverages for human consumption (other
than consumption on the premises).
‘‘(2) HOUSING.—The sale and renting of resi-
dential real property for use by the purchaser or
tenant as a principal residence.
‘‘(3) MEDICAL CARE.—Medical care.
‘‘(b) DEFINITIONS.—For purposes of subsection
(a)—
‘‘(1) NONALCOHOLIC
BEVERAGES.—The term
‘nonalcoholic beverages’ does not include any article
which is taxable under chapter 51.
‘‘(2) MEDICAL CARE.—The term ‘medical care’
means the performance of any service, and the retail
sale of any property, payment for which by the pur-
chaser would constitute medical care within the
meaning of section 213.
‘‘(3) MOBILE HOMES, ETC., TREATED AS REAL
PROPERTY.—A mobile or floating home shall be
treated as real property.
‘‘(c) ADVANCE ZERO RATING.—The Secretary shall
prescribe regulations under which any item which becomes
clearly identifiable as an item to which subsection (a) will
apply when it reaches the retail stage shall be zero rated
for all transactions after it becomes so clearly identifiable.
‘‘SEC. 3913. ZERO RATING FOR EXPORTS AND INTEREST.
‘‘The rate of the tax imposed by section 3901 shall
be zero with respect to the following:
‘‘(1) EXPORTS.—Exports of property.
‘‘(2) INTEREST.—Interest.
‘‘SEC. 3914. GOVERNMENTAL ENTITIES.
‘‘(a) ZERO RATING FOR SALES TO GOVERNMENTAL
ENTITIES AND EDUCATIONAL ACTIVITIES OF GOVERN-
MENTAL ENTITIES.—The rate of the tax imposed by sec-
tion 3901 shall be zero with respect to the following:
‘‘(1) SALES
TO
GOVERNMENTAL
ENTITIES.—
Any sale of property or services to a governmental
entity.
‘‘(2) EDUCATIONAL ACTIVITIES.—The providing
by a governmental entity of property and services in
connection with the education of students.
‘‘(b) SALES, ETC., BY GOVERNMENTAL ENTITIES
TAXABLE ONLY WHERE SEPARATE CHARGE IS MADE.—
For purposes of this chapter, the sale of property and the
performance of services by a governmental entity shall be
a taxable transaction if (and only if) a separate charge
of fee is made therefor.
‘‘(c) GOVERNMENTAL ENTITY DEFINED.—For pur-
poses of this chapter, the term ‘governmental entity’
means the United States, any State or political subdivision
thereof, the District of Columbia, a Commonwealth or pos-
session of the United States, or any agency or instrumen-
tality of any of the foregoing.
‘‘SEC. 3915. EXEMPT ORGANIZATIONS.
‘‘(a) ZERO RATING FOR SECTION 501(c)(3) ORGANI-
ZATIONS; CREDIT ALLOWED FOR ALL PURCHASES.—
‘‘(1) ZERO RATING.—The rate of the tax im-
posed by section 3901 shall be zero with respect to
any taxable transaction engaged in by a section
501(c)(3) organization other than as part of an un-
related business.
‘‘(2) CREDIT ALLOWED FOR ALL PURCHASES.—
For purposes of this chapter, a section 501(c)(3) or-
ganization shall be treated as engaged in a business
with respect to all of its activities.
‘‘(b) TAXABLE TRANSACTIONS IN CASE OF OTHER
EXEMPT ORGANIZATIONS.—For purposes of this chapter,
the sale of property and the performance of services by
any exempt organization other than a section 501(c)(3)
organization shall be a taxable transaction if (and only
if) a charge or fee is made for such services.
‘‘(c) DEFINITIONS.—For purposes of this chapter—
‘‘(1) SECTION
501(c)(3)
ORGANIZATIONS.—The
term ‘section 501(c)(3) organization’ means an orga-
nization described in section 501(c)(3) which is ex-
empt from tax under section 501(a).
‘‘(2) OTHER
EXEMPT
ORGANIZATION.—The
term ‘other exempt organization’ means any organi-
zation (other than a section 501(c)(3) organization)
which is exempt from tax under chapter 1.
‘‘SEC. 3916. CREDIT AGAINST TAX.
‘‘(a) GENERAL RULE.—There shall be allowed as a
credit against the tax imposed by section 3901 the aggre-
gate amount of tax imposed by section 3901 which has
been paid by sellers to the taxpayer of property and serv-
ices which the taxpayer uses in the business to which the
transaction relates.
‘‘(b) EXEMPT TRANSACTIONS, ETC.—If—
‘‘(1) property or services are used partly in the
business and partly for other purposes, or
‘‘(2) property or services are used partly for
taxable transactions and partly for other trans-
actions,
the credit shall be allowable only with respect to the prop-
erty and services used for taxable transactions in the busi-
ness. No credit shall be allowable for any transaction oc-
curring when the taxpayer was a nontaxable person.
‘‘(c) EXCESS CREDIT TREATED AS OVERPAYMENT.—
‘‘(1) IN GENERAL.—If for any taxable period
the aggregate amount of the credits allowable by
subsection (a) exceeds the aggregate amount of the
tax imposed by section 3901 for such period, such
excess shall be treated as an overpayment of the tax
imposed by section 3901.
‘‘(2) TIME WHEN OVERPAYMENT ARISES.—Any
overpayment under paragraph (1) for any taxable
period shall be treated as arising on the later of—
‘‘(A) the due date for the return for such
period, or
‘‘(B) the date on which the return is filed.
‘‘Subchapter D—Administration
‘‘Sec. 3921. Seller liable for tax.
‘‘Sec. 3922. Tax invoices.
‘‘Sec. 3923. De minimis exemption.
‘‘Sec. 3924. Time for filing return and claiming credit; deposits
of tax.
‘‘Sec. 3925. Treatment of related businesses, etc.
‘‘Sec. 3926. Secretary to be notified of certain events.
‘‘Sec. 3927. Regulations.
‘‘SEC. 3921. SELLER LIABLE FOR TAX.
‘‘The person selling the property or services shall be
liable for the tax imposed by section 3901.
‘‘SEC. 3922. TAX INVOICES.
‘‘(a) SELLER MUST GIVE PURCHASER TAX IN-
VOICE.—Any taxable person engaging in a taxable trans-
action shall give the purchaser a tax invoice with respect
to such transaction if the seller has reason to believe that
the purchaser is a taxable person.
‘‘(b) CONTENT OF INVOICE.—The tax invoice re-
quired by subsection (a) with respect to any transaction
shall set forth—
‘‘(1) the name and identification number of the
seller,
‘‘(2) the name of the purchaser,
‘‘(3) the amount of the tax imposed by section
3901, and
‘‘(4) such other information as may be pre-
scribed by regulations.
‘‘(c) NO CREDIT WITHOUT INVOICE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), a purchaser may claim a credit
with respect to a transaction only if the purchaser—
‘‘(A) has received from the seller and has
in his possession a tax invoice which meets the
requirements of subsection (b), and
‘‘(B) is named as the purchaser in such in-
voice.
‘‘(2) EMPLOYEES OR OTHER AGENTS NAMED IN
INVOICES.—To the extent provided in regulations,
the naming of an employee or other agent of the
purchaser shall be treated as the naming of the pur-
chaser.
‘‘(3) WAIVER
OF
INVOICE
REQUIREMENT
IN
CERTAIN CASES.—To the extent provided in regula-
tions, paragraph (1) shall not apply—
‘‘(A) where the purchaser without fault on
his part fails to receive or fails to have in his
possession a tax invoice,
‘‘(B) to a taxable transaction (or category
of transactions) where—
‘‘(i) the amount involved is de mini-
mis, or
‘‘(ii) the information required by sub-
section (b) can be reliably established by
sampling or by another method and can be
adequately documented.
‘‘(d) TIME FOR FURNISHING INVOICE.—Any invoice
required to be furnished by subsection (a) with respect to
any transaction shall be furnished not later than 15 busi-
ness days after the tax point for such transaction.
‘‘SEC. 3923. DE MINIMIS EXEMPTION.
‘‘(a) IN GENERAL.—Under regulations, a person—
‘‘(1) whose aggregate taxable transactions for
the calendar year do not exceed $20,000, and
‘‘(2) whose aggregate taxable transactions for
the next calendar year can reasonably be expected
not to exceed $20,000,
may elect to be treated as a person who is not a taxable
person for the next calendar year.
‘‘(b) EXCEPTIONS.—Subsection (a) shall not apply—
‘‘(1) to any sale or leasing of real property, and
‘‘(2) to any importing of property.
‘‘(c) TERMINATION
OF ELECTION.—Any election
under subsection (a) for a calendar year shall terminate
if the aggregate taxable transactions—
‘‘(1) for the first calendar quarter in such year
exceed $7,000,
‘‘(2) for the first 2 calendar quarters in such
year exceed $12,000, or
‘‘(3) for the first 3 calendar quarters in such
year exceed $17,000.
Such termination shall take effect on the first day of the
second month following the close of the first period in
which the requirements of paragraph (1), (2), or (3) are
met.
‘‘(d) TAXABLE AMOUNT TREATED
AS ZERO
FOR
ZERO-RATED TRANSACTIONS.—For purposes of this sec-
tion, the taxable amount of any zero-rated transaction
shall be treated as zero.
‘‘(e) CONDITION OF ELECTION.—In the case of a per-
son who is a taxable person for any period, an election
under subsection (a) may be made for succeeding periods
only with the consent of the Secretary. Such consent shall
be conditioned on placing such person, for all succeeding
periods, in the same position with respect to the tax im-
posed by section 3901 (and the credit allowed by section
3916) he would have been in if all property and services
he holds at the time he becomes a nontaxable person had
been acquired as a nontaxable person.
‘‘(f) CASUAL SALES AND LEASES OF REAL PROP-
ERTY EXCLUDED.—For purposes of this section, the term
‘taxable transaction’ does not include a transaction which
is treated as a commercial-type transaction solely by rea-
son of section 3904(b)(1)(A).
‘‘SEC. 3924. TIME FOR FILING RETURN AND CLAIMING
CREDIT; DEPOSITS OF TAX.
‘‘(a) FILING RETURN.—Before the first day of the
second calendar month beginning after the close of each
taxable period, each taxable person shall file a return of