An Act to reduce excise taxes, and for other purposes
PL 89-44 (H.R.8371), enacted 06/21/1965

136 
June 21, 1965 
[H. R. 8371] 
Excise Tax Re-
duction Act of 
1965, 
68A Stat. 3. 
26 u s e 1 
etseq. 
68A Stat. 473; 
72 Stat. 1275, 
1276. 
72 Stat. 1277; 
73 Stat. 617. 
72 Stat. 1286. 
72 Stat. 1305. 
68A Stat. 481. 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
Public Law 89-44 
AN ACT 
To reiluce excise taxes, and for other purposes. 
Be it enacted by the Semite and House of Representatives 
of the 
Uniisd States of Ainerica in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the "Excise Tax Reduc-
tion Act of 1965". 
(b) AMENDMENT OF 1954 CODE.—Except as otherwise expressly pro-
vided, whenever in this Act an amendment is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
is to a section or other provision of the Internal Revenue Code of 1954. 
TITLE I—RETAILERS EXCISE TAXES 
SEC. 1
0
1
. 
REPEAL 
OF 
RETAILERS 
EXCISE 
TAXES. 
(a) I N GENERAL.—Subchapters A (relating to jewelry and related 
items), B (relating to furs), C (relating to toilet preparations), and 
D (relating to luggage, handbags, etc.) of chapter 31 are repealed. 
(b) 
TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) The table of subchapters for chapter 31 is amended by 
striking out the items relating to subchapters A, B, C, and D. 
(2) Sections 4051 through 4053 are repealed and the table of 
sections for subchapter F of chapter 31 is amended by striking 
out the items relating to sections 4051,4052, and 4053. 
(3) Section 4055 is amended by striking out", in the case of the 
tax imposed by section 4041,". 
(4) Section 4057(a) is amended by striking out ", in the case 
of a tax imposed by section 4041,". 
(5) Section 4224 (relating to exemption for articles taxable as 
jewelry) is repealed and the table of sections for subchapter G 
of chapter 32 is amended by striking out the item relating to sec-
tion 4224. 
(6) Section 6011(c) (relating to return of retailers excise taxes 
by suppliers) is repealed. 
TITLE II—MANUFACTURERS EXCISE 
TAXES 
SEC. 201. AUTOMOBILES AND AUTOMOBILE PARTS. 
(a) PASSENGER AUTOMOBILES, ETC.—Paragraph 
(2) of section 
4061(a) (relating to imposition of tax) is amended to read as follows: 
"(2) (A) Articles enumerated in subparagraph (B) are taxable 
at whichever of the following rates is applicable: 
"10 percent for the period ending on the date of the enact-
ment of the Excise Tax Reduction Act of 1965. 
"7 percent for the period beginning with the day after the 
date of the enactment of the Excise Tax Reduction Act of 
1965 through December 31, 1965. 
"6 percent for the period January 1,1966, through December 
31, 1966. 
"4 percent for the period January 1, 1967, through Decem-
ber 31,1967. 
"2 percent for the period January 1, 1968, through Decem-
ber 31,1968. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
137 
"l percent for the period after December 31,1968. 
"(B) The articles to which subparagraph (A) applies are: 
"Automobile chassis and bodies other than those taxable 
under paragraph (1). 
"Chassis and oodies for trailers and semitrailers (other than 
house trailers) suitable for use in connection with passen-
ger automobiles. 
A sale of an automobile, or of a trailer or semitrailer suitable for 
use in connection with a passenger automobile, shall, for the pur-
poses of this paragraph, be considered to be a sale of a chassis 
and of a body enumerated in this subparagraph." 
(b) 
PARTS AND ACCESSORIES.— 
(1) Effective as provided by section 701(a) (1), subsection (b) 
^°^'' P- i^^-
of section 4061 (relating to imposition of tax on parts and acces- 
^^A stat. 482. 
sories) is amended by striking out "and other than automobile 
radio and television receiving sets" and by striking out ", except 
that on and after July 1, 1965, the rate shall be 5 percent". 
(2) Effective as provided by section 701(a) (2), subsection (b) 
of section 4061 is amended to read as follows: 
"(b) 
PARTS AND ACCESSORIES.— 
"(1) Except as provided in paragraph (2), there is hereby 
imposed upon parts or accessories (other than tires and inner 
tubes) for any of the articles enumerated in subsection (a)(1) 
sold by the manufacturer, producer, or importer a tax equiva-
lent to 8 percent of the price for which so sold, except that on and 
after October 1, 1972, the rate shall be 5 percent. 
"(2) No tax shall be imj)Osed under this subsectiqn upon any 
part or accessory which is suitable for use (and ordinarily is used) 
on or in connection with, or as a component part of, any article 
enumerated in subsection (a) (2) or a house trailer." 
(c) TECHNICAL AMENDMENT.—The last sentence of paragraph (1) 
of section 4061(a) is amended by striking out "the chassis and of the 
body" and inserting in lieu thereof "a chassis and of a body enu-
merated in this paragraph". 
SEC. 202. LUBRICATING OIL. 
(a) IMPOSITION OF TAX.—Section 4091 (relating to imposition of 
^^ ^*^*- ^''^• 
tax) is amended to i*ead as follows: 
"SEC. 4091. IMPOSITION OF TAX. 
"There is hereby imposed on lubricating oil (other than cutting 
oils) which is sold in the United States by the mainifacturer or 
producer a tax of 6 cents a gallon, to be paid by the manufacturer or 
producer." 
(b) 
PAYMENTS 
TO ULTIMATE 
PURCHASERS.—Subchapter 
B 
of 
chapter 65 (relating to rules of special application) is amended by 
adding at the end thereof the following new section: 
72 stat! 9 
"SEC. 6424. LUBRICATING OIL NOT USED IN HIGHWAY MOTOR 
VEHICLES. 
"(a) PAYMENTS.—Except as provided in subsection (g), if lubri-
cating oil (other than cutting oils, as defined in section 4092(b), and 
^^ ^*^*- ^''^ 
other than oil which has previously been used) is used otherwise than 
in a highway motor vehicle, the Secretary or his delegate shall pay 
(without interest) to the ultimate purchaser of such lubricating oil an 
amount equal to 6 cents for each gallon of lubricating oil so used. 
"(b) 
TIME FOR FILING CLAIMS; PERIOD COVERED.— 
"(1) GENERAL RULE.—Except as provided in paragraph (2), 
not more than one claim may be filed under subsection (a) by any 
person with respect to lubricating oil used during his taxable year. 
49-850 0-66—12 
68A Stat. 794; 
70 Stat. 87, 394; 
Ante, p. 137. 
138 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
No claim shall be allowed under this paragraph with respect to 
lubricating oil used during any taxable year unless filed by such 
^person not later than the time prescribed by law for filing an 
mcome tax return for such taxable year. For purposes of this 
subsection, a person's taxable year shall be his taxable year for 
purposes of subtitle A, except that a person's first taxable year 
beginning after December 31, 1965, shall include the period after 
December 31, 1965, and before the oeginning of such first taxable 
year. 
"(2) EXCEPTION.—If $1,000 or more is payable under this sec-
tion to any person with respect to lubricating oil used during any 
of the first three quarters of his taxable year, a claim may be 
filed under this section by such person with respect to lubricating 
oil used during such quarter. 
No claim filed under this para-
graph shall be allowed unless filed on or before the last day of 
the first quarter following the quarter for which the claim is 
"(c) EXEMPT SALES.—No amount shall be payable under this sec-
tion with respect to any lubricating oil which the Secretary or his 
delegate determines was exempt from the tax imposed by section 4091. 
The amount which (but for this sentence) would be payable under 
this section with respect to any lubricating oil shall be reduced by 
any other amount which the Secretary or his delegate determines is 
payable under this section, or is refundable under any provision of 
this title, to any person with respect to such lubricating oil. 
"(d) 
APPLICABLE LAWS.— 
"(1) I N GENERAL.—All provisions of law, including penalties, 
applicable in respect of the tax imposed by section 4091 shall, 
insofar as applicable and not inconsistent with this section, apply 
in respect of the payments provided for in this section to the 
same extent as if such payments constituted refunds of overpay-
ments of the tax so imposed. 
"(2) 
EXAMINATION OF BOOKS AND WITNESSES.—For the purpose 
of ascertaining the correctness of any claim made under this 
section, or the correctne* of any payment made in respect of any 
such claim, the Secretary or his delegate shall have the authority 
granted by paragraphs (1), (2), and (3) of section 7602 (relating 
to examination of books and witnesses) as if the claimant were the 
person liable for tax. 
" (e) REGULATiONs.-^The Secretary or his delegate may by regula-
tions prescribe the conditions, not inconsistent with the provisions of 
this section, under which payments may be made under this section. 
"(f) EFFECTIVE DATE.—This section shall apply only with respect 
to lubricating oil placed in use after December 31,1965. 
"(g) 
INCOME TAX CREDIT IJT LIEU OF PAYMENT.— 
"(1) PERSONS NOT SUBJECT TO INCOME TAX.—Payment shall be 
made under subsection (a) only to— 
"(A) the United States or an agency or instrumentality 
thereof, a State, a political subdivision of a State, or an 
agency or instrumentality of one or more States or political 
subdivisions, or 
"(B) an organization exempt from tax under section 
501 (a) (other than an organization required to make a return 
of the tax imposed under subtitle A for its taxable year). 
"(2) EXCEPTION.—Paragraph (1) shall not apply to a pay-
ment of A claim filed under subsection (b) (2). 
68A Stat. 901. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
139 
"(3) ALLOWANCE OF CREDIT AGAINST INCOME TAX.— 
"For allowance of credit against the tax imposed by sub-
title A for lubricating oil used, see section 39." 
"(h) 
CROSS REFERENCES.— 
"(1) For civil penalty for excessive claims under this 
section, see section 6675. 
"(2) For fraud penalties etc., see chapter 75 (section 
7201 and following, relating to crimes, other offenses, and 
forfeitures)." 
(c) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) (A) Subpart B of part III of subchapter A of chapter 32 
^^A stat. 483. 
is amended by adding at the end thereof the following new section: 
"SEC. 4094. CROSS REFERENCE. 
"For provisions to relieve purchasers of lubricating oil 
from excise tax in the case of lubricating oil used other-
wise than in a highway motor vehicle, see sections 39 and 
5424." 
Ante, p. 1.37. 
(B) The table of sections for such subpart B is amended 
by adding at the end thereof the following: 
"Sec. 4094. Cross reference." 
(2) (A) Section 6206 is amended— 
^
o ^'^'' ^o- ^^e. 
(i) by striking out "6420 AND 6421" in the heading and 
inserting in lieu thereof "6420, 6421, AND 6424", 
(ii) by striking out "6420 or 6421" each place it appears 
in the text and inserting in lieu thereof "6420, 6421, or 6424", 
and 
(iii) by inserting "(or, in the case of lubricating oil, by 
section 4091)" after "4081". 
(B) The table of sections for subchapter A of chapter 63 is 
amended by striking out "6420 and 6421" and inserting in lieu 
thereof "6420, 6421, and 6424". 
(3) (A) Section 6675 is amended— 
^o stat. 90,396. 
(i) by inserting "OR LUBRICATING OIL" after "GAS-
OLINE" in the heading; 
(ii) by striking out "or" before 6421 in subsection (a) and 
inserting in lieu thereof a comma, and by inserting ", or 6424 
(relating to lubricating. oil not used in highway motor 
vehiclesT" in such subsection after "systems)"; 
(iii) by striking out "or 6421," in subsection (b) (1) and 
inserting in lieu thereof "6421, or 6424,". 
(B) The table of sections for subchapter B of chapter 68 is 
amended by striking out "certain gasoline" and inserting in lieu 
thereof "certain gasoline or lubricating oil". 
(4) Sections 7210, 7603, and 7604, and the first sentence of 
section 7605(a), are each amended by inserting "6424(d)(2)," oo?1n%°I; fi"*' 
after "6421(f) (2),". The second sentence of section 7605(a) is 396. 
' 
amended by striking out "or 6421(f) (2)," and inserting in lieu 
thereof ",6421(f) (2),or6424(d) (2),^ 
SEC. 203. HOUSEHOLD APPUANCES. 
Repeals. 
Subchapter B of chapter 32 (relating to refrigeration equipment; 
26'uscr4iu!" 
electric, gas, and oil appliances; and electric light bulbs) is repealed 4131. 
and the table of subchapters for chapter 32 is amended by striking out 
the item relating to subchapter B. 
Ante, p. 137. 
4151 
68A Stat, 489. 
26 u s e 4191 
4211. 
140 
PUBLIC L
A
W 89-44-JUNE 21, 1965 
[79 STAT. 
Repeal. 
gg^ 204. ENTERTAINMENT EQUIPMENT. 
72^st^t!*i278r' 
Subchapter C of chapter 32 (relatmg to radio and television sets, 
26 use 4141- 
phonographs and records, etc.; and musical instruments) is repealed 
and the table of subchapters for chapter 32 is amended by striking 
out the item relating to subchapter C. 
SEC. 205. RECREATIONAL EQUIPMENT. 
(a) SPORTING GOODS.—Section 4161 (relating to sporting goods) is 
amended to read as follows: 
"SEC. 4161. IMPOSITION OF TAX. 
"There is hereby imposed upon the sale of fishing rods, creels, reels, 
and artificial lures, baits, and flies (including parts or accessories of 
such articles sold on or in connection therewith, or with the sale 
thereof) by the manufacturer, producer, or importer a tax equivalent 
to 10 percent of the price for which so sold." 
^e^vsc 4171- 
(^) PHOTOGRAPHIC EQUIPMENT.—Part I I of subchapter D of chap-
4173. 
ler 32 (relating to photographic equipment) is repealed and the table 
of parts for such subchapter is amended by striking out the item 
relating to part II. 
SEC. 206. BUSINESS MACHINES AND OTHER ITEMS. 
Subchapter E of chapter 32 (relating to business machines; pens 
and mechanical pencils and lighters; and matches) is repealed and 
the table of subchapters for chapter 32 is amended by striking out 
the item relating to subchapter E. 
SEC. 207. PARTIAL PAYMENTS; SALES OF INSTALLMENT ACCOUNTS. 
(a) PARTIAL PAYMENTS.—Section 4216(c) (relating to definition 
of price; partial payments) is amended by striking out "that portion 
of the total tax which is proportionate to the portion of the total 
amount to be paid represented by such payment." in the material 
follow^ing paragraph (4) and inserting in lieu thereof "a percentage 
of such payment equal to the rate of tax in effect on the date such 
payment is due." 
72 Stat. 1280. 
(^^ SALES OF INSTALLMENT ACCOUNTS.—Sectiou 4216(e) (relating 
to definition of price; sales of installment accounts) is amended— 
(1) by striking out "total tax;" in paragraph (1) and inserting 
in lieu thereof "total tax which would be payable if such in-
stallment accounts had not been sold or otherwise disposed of 
(computed as provided in subsection (c));"; and 
(2) by amending paragraph (2) to read as follows: 
"(2) if any such sale is pursuant to the order of, or subject to 
the approval of, a court of competent jurisdiction in a bankruptcy 
or insolvency proceeding, the amount computed under paragraph 
(1) shall not exceed the sum of the amounts computed by multi-
plying (A) the proportionate share of the amount for which such 
accounts are sold which is allocable to each unpaid installment 
payment by (B) the rate of tax under this chapter in effect on 
the date such unpaid installment payment is or was due." 
72 Stat. 1310. 
^^.-j CONFORMING AMENDMENT.—Section 6416(b)(5) (relating to 
return of certain installment accounts) is amended by striking out 
"proportionate" and inserting in lieu thereof "allocable". 
SEC. 208. TECHNICAL AND CONFORMING CHANGES. 
72 Stat. 1279. 
(a) Scctlou 4216(b) (2) (relating to constructive sale price; special 
rule) is amended— 
(1) by striking out the material immediately preceding sub-
para<rraph (A) and inserting in lieu thereof the following: 
" (2) SPECIAL RULE.—If an article is sold at retail or to a retailer, 
and if—"; 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
141 
(2) by striking out in subj)aragraph (A) ", to retailers, or to 
special dealers" and inserting in lieu thereof: "or to retailers"; 
(3) by striking out "(other than special dealers)" each place 
it appears; and 
(4) by striking out in subparagraph (C) "4191 (relating to 
business machines), or 4211 (relating to matches),". 
(b) Paragraph (3) (relating to special dealer) of section 4216(b) 
72s^tat! 1279. 
is repealed. 
(c) Section 4218 (relating to use by manufacturer or importer 
^2 stat. 128I. 
considered a sale) is amended— 
(1) by striking out the heading to subsection (b) and inserting 
in lieu thereof the following: 
" ( b ) 
TIRES AND T U B E S . — " . 
(2) by striking out in subsection (b) "or an automobile radio 
or television receiving set taxable under section 4141,"; 
(3) by striking out the heading to subsection (c) and inserting 
in lieu thereof the following: 
"(c) 
AUTOMOTIVE PARTS AND ACCESSORIES.—" 
(4) by striking out in subsection (c) "a radio or television 
component taxable under section 4141, or a camera lens taxable 
under section 4171,". 
(d) Section 4221 (relating to certain tax-free sales) is amended— 
^^ ^*°*- ^^^^• 
(1) by striking out in subsection (d) (6) (B) "a radio or 
television component taxable under section 4141, or a camera lens 
taxable under section 4171," ; 
(2) by striking out the heading to paragraph (2) of subsection 
(e) and inserting in lieu thereof the following: 
"(2) 
TIRES AND TUBES.—"; 
(3) by striking out "or 4141" in subparagraphs (A) and (C) 
of subsection (e) (2); 
(4) by striking out "tire, inner tube, or automobile radio or 
television receiving set" in subparagraphs (A) and (C) of sub-
section (e) (2) and inserting in lieu thereof "tire or inner tube"; 
(5) by striking out "tire, tube, or receiving set" each place it 
appears in subparagraphs (A) (i) and (B) of subsection (e) (2) 
and inserting in lieu thereof "tire or tube"; 
(6) by striking out paragraph (3) of subsection (e) ; and 
(7) by striking out subsection (f). 
(e) Section 4222 (relating to registration) is amended by striking 
out paragraph (4) or subsection (b). 
(f) Section 4227(2) is amended by striking out "and automobile yQ^ltt%\^^^'' 
radio and television receiving sets,". 
SEC. 
2
0
9
. 
REFUNDS 
WITH 
RESPECT 
TO 
FLOOR 
STOCKS 
AND 
CERTAIN 
CONSUMER 
PURCHASES. 
(a) PASSENGER AUTOMOBILES, ETC.—Section 6412(a) (1) (relating 
7o stat. 392. 
to floor stocks refunds on passenger automobiles, etc.) is amended to 
read as follows: 
"(1) PASSENGER 
AUTOMOBILES, ETC.—^Where before the day 
after the date of the enactment of the Excise Tax Reduction Act 
of 1965, or before January 1,1966,1967,1968, or 1969, any article 
subject to the tax imposed by section 4061(a) (2) has been sold 
^"^^' P- ^^^• 
by the manufacturer, producer, or importer and on such day or 
such date is held by a dealer and has not been used and is intended 
for sale, there shall be credited or refunded (without interest) 
to the manufacturer, producer, or importer an amount equal to 
142 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
the difference between the tax paid by the manufacturer, producer, 
pr importer on his sale of the article and the amount of tax made 
jipplicable to the article on such day or such date, if— 
"(A) claim for such credit or refund is filed with the 
Secretary or his delegate on or before the 10th day of the 
8th calendar month beginning after such day or such date 
based upon a request submitted to the manufacturer, pro-
ducer, or importer before the first day of the 7th calendar 
month beginning after such day or such date by the dealer 
who held the article in respect of which the credit or refund 
is claimed; and 
"(B) on or before such 10th dav reimbursement has been 
made to the dealer by the manufacturer, producer, or im-
porter for the tax reduction on the article or written consent 
has been obtained from the dealer to allowance of the credit 
or refund." 
(b) 
FLOOR STOCK REFUNDS; OTHER MANUFACTURERS EXCISE TAXES 
AND TAX ON PLAYING CARDS.— 
(1) I N GENERAL.—^Where before the day after the date of the 
enactment of this 'Act, any article subject to the tax imposed by 
section 4111, 4121, 4141, 4151, 4161, 4171, 4191, or 4451 of the 
p^sT*'^148^^' ^'^°' 
Internal Revenue Code of 1954 (hereinafter in this Act referred 
°^' ''* 
' 
to as the "Code"), or where before January 1, 1966, any article 
subject to the tax imposed by section 4061 (b), 4091 (1), or 4131 of 
^^An(e, pp. 137, 
^^jjg Code, has been sold by the manufacturer, producer, or 
importer, and on such day or such date is held by a dealer and 
has not been used and is intended for sale, there shall be credited 
or refimded (without interest) to the manufacturer, producer, or 
importer an amount equal to the difference between the tax paid 
by the manufacturer, producer, or importer on his sale of the 
article and the amount of tax made applicable to the article on 
such day or such date, if— 
(A) claim for such credit or refund is filed with the Sec-
retary of the Treasury or his delegate on or before February 
10,1966 (or August 10,1966, in the case of an article subject 
to the tax imposed by section 4061(b), 4091(1), or 4131 of 
the Code), based upon a request submitted to the manufac-
turer, producer, or importer oefore January 1,1966 (or July 
1,1966, in the case of an article subject to the tax imposed by 
section 4061(b), 4091(1), or 4131 of the Code), by the dealer 
who held the article in respect of which the credit or refund 
^s claimed; and 
(B) on or before such February 10 (or such August 10 in 
the case of an article subject to the tax imposed by section 
4061(b), 4091(1), or 4131 of the Code) reimbursement has 
been made to the dealer by the manufacturer, producer, or 
importer for the tax reduction on the article or written con-
sent has been obtained from the dealer to allowance of the 
credit or refund. 
(2) DEFINITIONS.—For purposes of this subsection— 
(A) The term "dealer" includes a wholesaler, jobber, dis-
tributor, or retailer. 
(B) An article shall be considered as "held by a dealer" 
if title thereto has passed to the dealer (whether or not 
delivery to him has wen made), and if for purposes of con-
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
143 
sumption title to the article or possession thereof has not at 
any time been transferred to any person other than a dealer. 
For purposes of paragrapjh (1) and notwithstanding the 
E
receding sentence, an article shall be considered as "held 
y a dealer" and not to have been used, although possession 
of such article has been transferred to another person, if such 
article is returned to the dealer in a transaction under which 
any amount paid or deposited by the transferee for such 
article is refunded to him (other than amounts retained by 
the dealer to cover damage to the article). Moreover, such 
an article shall be considered as held by a dealer on the day 
after the date of the enactment of this Act even though it is 
in the possession of the transferee on such day, if it is returned 
to the dealer (in a transaction described in the preceding 
sentence) before August 1, 1965. 
(C) In the case or an article subject to the tax imposed by 
section 4451 (relating to playing cards) — 
(i) an article shall be treated as having been sold by 
the manufacturer before the day after the date of the 
enactment of this Act if it has been removed for con-
sumption or sale before such day, and 
(ii) if an article has been removed for consumption 
or sale, but has not been sold, by the manufacturer before 
such day, the manufacturer shall be treated as the dealer. 
(3) LIMITATION ON ELIGIBILITY FOR CREDIT OR REFUND.—No 
manufacturer, producer, or importer shall be entitled to credit or 
refund under paragraph (1) unless he has in his possession such 
evidence of the inventories with respect to which the credit or 
refund is claimed as may be required by regulations prescribed by 
the Secretary of the Treasury or his delegate under this subsection. 
(4) OTHER LAWS APPLICABLE.—All provisions of law, including 
penalties, applicable in respect of the taxes imposed by sections 
4061(b), 4091(1), 4111, 4121, 4131, 4141, 4151, 4161, 4171, 4191, 
and 4451 of the Code shall, insofar as applicable and not incon- .3^"'*' ^^'p ^^^' 
sistent with paragraphs (1)., (2), and (3) of this subsection, p. Ag. ' °*' 
apply in respect of the credits and refunds provided for in para-
graph (1) to the same extent as if the credits or refunds consti-
tuted overpayments of the taxes, 
(c) EEFITNDS W I T H EESPECT TO CERTAIN CONSUMER PURCHASES.— 
(1) I N GENERAL.—Where after May 14, 1965, and before the 
day after the date of the enactment of this Act, a new automotive 
item subject to the tax imposed by section 4061(a)(2) of the 
Code, or a new self-contained air-conditioning unit subject to 
"*"'*' P* '^^* 
the tax imposed by section 4111 of the Code, has been sold to an 
ultimate purchaser, there shall be credited or refunded (without 
interest) to the manufacturer, producer, or importer of such arti-
cle an amount equal to the difference between the tax paid by 
such manufacturer, producer, or importer on his sale of the article, 
and the tax made applicable to the article on such day, if— 
(A) claim for such credit or refund is filed with the Secre-
tary of the Treasury or his delegate on or before February 
10, 1966, based upon information submitted to the manu-
facturer, producer, or importer before January 1, 1966, by 
the person who sold the article (in respect to which the credit 
or refund is claimed) to the ultimate purchaser; and 
Ante, pp. 136, 
139. 
70 Stat. 398. 
23 u s e 120 note. 
144 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
(B) on or before February 10, 1966, reimbursement has 
been made to the ultimate purchaser for the tax reduction on 
the article. 
(2) LIMITATION ON ELIGIBILITY FOR CREDIT OR REFUND.—^No 
manufacturer, producer, or importer shall be entitled to a credit 
or refund under paragraph (1) with respect to an article unless 
he has in his possession such evidence of the sale of the article 
to an ultimate purchaser, and of the reimbursement of the tax 
to such purchaser, as may be required by regulations prescribed 
by the Secretary of the Treasury or his delegate under this 
subsection. 
(3) OTHER LAWS APPLICABLE.—All provisions of law, including 
penalties, applicable in respect to the taxes imposed by sections 
4061(a) (2) and 4111 of the Code shall, insofar as applicable and 
not inconsistent with paragraphs (1) and (2) of this subsection, 
apply in respect of the credits and refunds provided for in para-
graph (1) to the same extent as if the credits or refunds consti-
tuted overpayments of the tax. 
fsA^stat 797 
(d) Scctiou 6412(e) (relating to cross reference) is repealed. 
SEC. 210. HIGHWAY TRUST FUND. 
(a) Section 209(c) (1) of the Highway Revenue Act of 1956 (relat-
ing to general provisions for transfers to the Highway Trust Fund) 
is amended— 
(1) by striking out "and" at the end of subparagraph ( F ) ; 
(2) by striking out the period at the end of subparagraph (G) 
and inserting in lieu thereof "; and"; 
(3) by inserting after subparagraph (G) the following new 
subparagraph: 
"(H) 100 percent of the taxes received after December 31, 
1965, under sections 4061(b) (tax on parts and accessories 
Ante, p. 137. 
foj. trucks, buscs, etc.) and 4091 (tax on lubricating oil)."; 
and 
(4) by adding at the end thereof the following new sentence: 
"In the case of any tax described in subparagraph (H), amounts 
received during the calendar year 1966 shall be taken into account 
only to the extent attributable to liability for tax incurred after 
December 31, 1965." 
(b) Subparagraph (A) of section 209(c) (3) of the Highway Reve-
nue Act of 1956 (relating to transfers to the Highway Trust Fund 
for liabilities incurred before October 1, 1972) is amended to read 
as follows: 
68Astat. 478. 
"(A) 100 peTccnt of the taxes under sections 4041 (taxes 
on diesel fuel and special motor fuels), 4061 (b) (tax on parts 
and accessories for trucks, buses, etc.), 4071(a) (4) (tax on 
389? ^*^*' ^^^' 
*^®^^ rubber), 4081 (tax on gasoline), and 4091 (tax on lubri-
cating oil);". 
(c) Section 209(f) (3) of the Highway Revenue Act of 1956 (relat-
ing to transfers from trust fund for gasoline used on farms and for 
certain other purposes) is amended as follows: 
(1) by striking out the heading and inserting in lieu thereof 
the following: 
" ( 3 ) 
TRANSFERS FROM TRUST FUND FOR GASOLINE AND LUBRICAT-
ING OIL USED FOR CERTAIN PURPOSES.—"; 
(2) by striking out "and 6421" and inserting ", 6421"; and 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1%5 
145 
Ante, p. 1.37. 
(3) by inserting after "transit systems)" the following: ", and 
6424 (relating to amounts paid in respect of lubricating oil not 
used in highway motor vehicles)". 
TITLE III—TAXES ON FACILITIES AND 
SERVICES 
SEC. 301. REPEAL OF ADMISSIONS AND CLUB DUES TAXES. 
Subchapter A (relating to admissions and club dues) of chapter 33 
T^^x^c^iiu 
is repealed and the table of subchapters for chapter 33 is amended by 4243. 
striking out the item relating to subchapter A. 
SEC. 302. COMMUNICATIONS TAX. 
Subchapter B of chapter 33 (relating to communications taxes) is ^^ stat. 1239. 
amended to read as follows: 
"Subchapter B—Communications 
"Sec. 4251. Imposition of tax. 
"Sec. 4252. Definitions. 
"Sec. 4253. Exemptions. 
"Sec. 4254. Computation of tax. 
"SEC. 4251. IMPOSITION OF TAX. 
"(a) I N GENERAL.— 
"(1) Except as provided in subsection (b), there is hereby 
imposed on amounts paid for the following communication serv-
ices a tax equal to the percent of the amount so paid specified in 
paragraph (2): 
"Local telephone service. 
"Toll telephone service. 
"Teletypewriter exchange service. 
"The taxes imposed by this section shall be paid by the person 
paying for the services. 
" (2) The rate of tax referred to in paragraph (1) is as follows: 
"Amounts paid pursuant to 
bills first rendered— 
Percent— 
"During 1966 
3 
"During 1967 
2 
"During 1968 
1 
"(b) TERMINATION or TAX.—The tax imposed by subsection (a) 
shall not apply to amounts paid pursuant to bills first rendered on or 
after January 1, 1969. 
"(c) SPECIAL RULE.—For purposes of subsections (a) and (b). 
in the case of communication services rendered before November 1 oi 
any calendar year for which a bill has not been rendered before the 
close of such year, a bill shall be treated as having been first rendered 
during such year. 
"SEC. 4252. DEFINITIONS. 
"(a) LOCAL TELEPHONE SERVICE.—For purposes of this subchapter, 
the term 'local telephone service' means—• 
"(1) the access to a local telephone system, and the privilege 
of telephonic quality communication with substantially all per-
sons having telephone or radio telephone stations constituting a 
part of such local telephone system, and 
"(2) any facility or service provided in connection with a 
service described in paragraph (1), 
146 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
The term 'local telephone service' does not include any service which 
is a 'toll telephone service' or a 'private communication service' as 
defined in subsections (b) and (d). 
"(b) TOLL TELEPHONE SERVICE.—For purposes of this subchapter, 
the term 'toll telephone service' means— 
"(1) a telephonic quality communication for which (A) there 
is a toU charge which varies in amoimt with the distance and 
elapsed transmission time of each individual communication and 
(B) the chargB is paid within the United States, and 
"(2) a service which entitles the subscriber, upon payment 
of a periodic charge (determined as a flat amount or upon the 
basis of total elapsed transmission time), to the privilege of an 
unlimited number of telephonic communications to or from all 
or a substantial portion of the persons having telephone or radio 
telephone stations in a specified area which is outside the local 
telephone system area in which the station provided with this 
service is located. 
"(c) TELETYPEWRITER EXCHANGE SERVICE.—For purposes of this 
subchapter, the term 'teletypewriter exchange service' means the 
access Jtrom a teletypewriter or other data station to the teletypewriter 
exchange system of which such station is a part, and the privilege of 
intercommunication by such station with substantially all persons 
having teletypewriter or other data stations constituting a part of the 
same teletypewriter exchange system, to which the subscriber is 
entitled upon payment of a charge or charges (whether such charge or 
charges are determined as a flat periodic amount, on the basis of dis-
tance and elapsed transmission timCj or in some other manner). 
The 
term 'teletypewriter exchange service' does not include any service 
which is 'local telephone service' as defined in subsection (a). 
"(d) PRIVATE COMMUNICATION SERVICE.—For purposes of this 
subchapter, the term 'private communication service' means— 
" (1) the communication service furnished to a subscriber which 
entitles the subscriber— 
"(A) to exclusive or priority use of any communication 
channel or groups of channels, or 
"(B) to the use of an intercommunication system for the 
subscriber's stations, 
regardless of whether such channel, groups of channels, or inter-
communication system may be connected through switching with 
a service described in subsection (a), (b), or (c), 
"(2) switching capacity, extension lines and stations, or other 
associated services which are provided in connection with, and 
are necessary or unique to the use of, channels or systems described 
in paragraph (1), and 
''(3) the channel mileage which connects a telephone station 
located outside a local telephone system area with a central office 
in such local telephone system, 
except that such term does not include any communication service 
unless a separate charge is made for such service. 
"SEC. 4253. EXEMPTIONS. 
"(a) CERTAIN COIN-OPERATED SERVICE.—Service paid for by in-
serting coins in coin-operated telephones available to the public shall 
not be subject to the tax imposed by section 4251 with respect to local 
telephone service, or with respect to toll telephone service if the charge 
for such toll telephone service is less than 25 cents; except that where 
such coin-operated telephone service is furnished for a guaranteed 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
147 
amount, the amounts paid under such ^arantee plus any fixed monthly 
or other periodic charge shall be subject to the tax. 
" (b) NEWS SERVICES.—No tax shall be imposed under section 4251, 
except with respect to local telephone service, on any payment received 
from any person for services used in the collection of news for the 
public press, or a news ticker service furnishing a general news 
service similar to that of the public press, or radio broadcasting, or 
in the dissemination of news through the public press, or a news ticker 
service furnishing a general news service similar to that of the public 
press, or by means of radio broadcasting, if the charge for such service 
IS billed in writing to such person. 
"(c) INTERNATION"AL, 
ETC.. 
ORGANIZATIONS.—No tax shall be 
imposed under section 4251 on any payment received for services fur-
nished to an international organization, or to the American National 
Red Cross. 
"(d) SERVICEMEN IN COMBAT ZONE.—No tax shall be imposed under 
section 4251 on any payment received for any toll telephone service 
which originates within a combat zone, as defined in section 112, ^^^ ^*^*- ^'*-
from a member of the Armed Forces of the United States performing 
service in such combat zone, as determined under such section, pro-
vided a certificate, setting forth such facts as the Secretary or his 
delegate may by regulations prescribe, is furnished to the person 
receiving such payment. 
"(e) ITEMS OTHERWISE TAXED.—Only one payment of tax under 
section 4251 shall be required with respect to the tax on any service, 
notwithstanding the lines or stations of one or more persons are 
used in furnishing such service. 
"(f) COMMON CARRIEKS AND COMMUNICATIONS COMPANIES.—No tax 
shall be imposed under section 4251 on the amount paid for any toll 
telephone service described in section 4252(b) (2) to the extent that 
the amount so paid is for use by a common carrier, telephone or 
telegraph company, or radio broadcasting station or network in the 
conduct of its business as such. 
"(g) INSTALLATION CHARGES.—No tax shall be imposed under sec-
tion 4251 on so much of any amount paid for the installation of any 
instrument, wire, pole, switchboard, apparatus, or equipment as is 
properly attributable to such installation. 
"SEC. 4254. COMPUTATION OF TAX. 
"(a) GENERAL RULE.—If a bill is rendered the taxpayer for local 
telephone service or toll telephone service— 
" (1) the amount on which the tax with i-espect to such services 
shall be based shall be the sum of all charges for such services 
included in the bill; except that 
" (2) if the person who renders the bill groups individual items 
for purposes of rendering the bill and computing the tax, then 
(A) the amount on which the tax with respect to each such group 
shall be based shall be the sum of all items within that group, and 
(B) the tax on the remaining items not included in any such 
group shall be based on the charge for each item separately. 
"(b) WHERE PAYMENT Is MADE FOR TOLL TELEPHONE SERVICE IN 
COIN-OPERATED TELEPHONES.—If the tax imposed by section 4251 with 
respect to toll telephone service is paid by inserting coins in coin-
148 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
76 Stat. 115; 
78 Stat. 237. 
26 u s e 4261 
note. 
Repeal. 
68A Stat. 510. 
26 u s e 4286, 
4287. 
76 Stat. 117. 
68A Stat. 744; 
78 Stat. 73. 
operated telephones, tax shall be computed to the nearest multiple of 
5 cents, except that, where the tax is midway between multiples of 5 
cents, the next higher multiple shall apply." 
SEC. 
3
0
3
. 
TAX 
ON 
TRANSPORTATION 
OF 
PERSONS 
BY 
AIR. 
(a) I N GENERAL.—Section 4261 (relating to imposition of tax on 
transportation of persons by air) is amended by striking out "Novem-
ber 15,1962, and before July 1,1965" wherever it appears and insert-
ing in lieu thereof "November 15,1962". 
(b) CONFORMING AMENDMENT.—Section 5 of the Tax Rate Exten-
sion Act of 1962 (76 Stat. 115) is amended by striking out sub-
section (e). 
SEC. 304. SAFE DEPOSIT BOXES. 
Subchapter D of chapter 33 (relatiiig to safe deposit boxes) is 
hereby repealed and the table of subchapters for chapter 33 is amended 
by striking out the item relating to subchapter D. 
SEC. 305. CONFORMING CHANGES. 
(a) Section 4291 (relating to cases where persons receiving payment 
must collect tax) is amended to read as follows: 
"SEC. 4291. CASES WHERE PERSONS RECEIVING PAYMENT MUST COL-
LECT TAX. 
"Except as otherwise provided in section 4264(a), every person 
receiving any payment for facilities or services on which a tax is 
imposed upon the payor thereof under this chapter shall collect the 
amount of the tax from the person making such payment." 
(b) Section 6040 (relating to cross references) is amended by strik-
ing out paragraph (6). 
TITLE IV—MISCELLANEOUS TAXES 
Repeals. 
72 Stat. 1293. 
26 u s e 430 1-
4354. 
68A Stat. 529. 
26 u s e 4451-
4457. 
68A Stat. 531; 
73 Stat. 620. 
SEC. 401. DOCUMENTARY STAMP TAXES. 
(a) I N GENERAL.—Subchapters A (relating to issuance of capital 
stock, etc.) and B (relating to sales or transfers of capital stock, etc.) 
of chapter 34 are repealed and the table of subchapters for chapter 34 
is amended by striking out the items relating to such subchapters. 
(b) CONVEYANCES.—Section 4361 (relating to tax on conveyances) 
is amended by adding at the end thereof the following new sentence: 
"The tax imposed by this section shall not apply on or after January 1, 
1968." 
(c) TECHNICAL AND CONFORMING CHANGES.—Section 4381 (relating 
to definitions) is repealed and the table of sections for subchapter E of 
chapter 34 is amended by striking out the item relating to such section. 
SEC. 402. PLAYING CARDS. 
Subchapter A of chapter 36 (relating to playing cards) is repealed 
and the table of subchapters for chapter 36 is amended by striking out 
the item relating to subchapter A. 
SEC. 403. OCCUPATIONAL TAX ON COIN-OPERATED DEVICES. 
(a) I N GENERAL.—Section 4461 (relating to imposition of tax) is 
amended by striking out subsection (a) and so much of subsection (b) 
as precedes paragraph (1) and inserting in lieu thereof the following: 
"(a) I N GENERAL.—There shall be imposed a special tax to be paid 
by every person who maintains for use or permits the use of, on any 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
149 
place or premises occupied by him, a coin-operated gaming device (as 
defined in section 4462) at the following rates: 
"(IJ $250 a year; and 
"(2) $250 a year for each additional device so maintained or 
the use of which is so permitted. If one such device is replaced 
by another, such other device shall not be considered an additional 
device, 
"(b) EXCEPTION.—No tax shall be imposed on a device which is 
commonly known as a claw, crane, or digger machine if—" 
(b) DEFINITION-.—Section 4462 (relating to definition of coin- 
72 stat. 1304. 
operated amusement or gaming device) is amended to read as follows: 
«SEC. 4462. DEFINITION OF COIN-OPERATED GAMING DEVICE. 
" (a) I N GENERAL.—For purposes of this subchapter, the term 'coin-
operated gaming device' means any machine which is— 
"(1) a so-called 'slot' machine which operates by means of 
the insertion of a coin, token, or similar object and which, by 
application of the element of chance, may deliver, or entitle the 
person playing or operating the machine to receive, cash, premi-
ums, merchandise, or tokens, or 
"(2) a machine which is similar to machines described in 
paragraph (1) and is operated without the insertion of a coin, 
token, or similar object. 
"(b) EXCLUSIONS.—The term 'coin operated gaming device' does 
not include— 
" (1) a bona fide vending or amusement machine in which gam-
ing features are not incorporated; or 
"(2) a vending machine operated by means of the insertion 
of a one cent coin, which, when it dispenses a prize, never dispenses 
a prize of a retail value of, or entitles a person to receive a prize 
of a retail value of, more than 5 cents, and if the only prize dis-
pensed is merchandise and not cash or tokens." 
(c) CLERICAL AMENDMENT.—The table of sections for subchapter 
B of chapter 36 is amended by striking out: 
"Sec. 4462. Definition of coin-operated amusement or gaming device." 
and inserting in lieu thereof: 
"Sec. 4462. Definition of coin-operated gaming device." 
SEC. 404. OCCUPATIONAL TAX ON BOWLING ALLEYS, BILLIARD AND 
POOL TABLES. 
Subchapter C of chapter 36 (relating to occupational tax on bowling 
26^sc'*44n-' 
alleys, billiard and pool tables) is repealed and the table of subchap- 4474. 
ters for chapter 36 is amended by striking out the item relating to 
subchapter C. 
SEC. 
4
0
5
. 
TECHNICAL 
AND 
CONFORMING 
CHANGES. 
(a) Section 4402(2) (relating to exemption from tax on wagers) is 
72 stat. 1305. 
amended by striking out "section 4462(a) (2) (B)," and inserting in 
lieu thereof "section 4462(a) (2),". 
(b) Section 4901(a) (relating to payment of tax as condition prece- 
^^^ ^
*
^
*
* ^^^• 
dent to carrying on certain business) is amended by striking out 
"4461(2)" and inserting in lieu thereof "4461(a)(1)". 
(c) Section 4905(b)(1) (relating to registration) is amended by 
striking out "playing cards," and by striking out "4455,". 
(d) Paragraph (2) of section 4914(a) (relating to transactions not 
'^^ ^*^*- *^^' 
considered acquisitions) is amended by inserting before the semicolon 
at the end thereof "as in effect on January 1,1965". 
150 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
TITLE 
V—ALCOHOL 
AND 
TOBACCO 
TAXES 
SEC. 501. PRESENT TAX RATES MADE PERMANENT. 
78^statr*237^^'*' 
(*) Sectioii 5001(a) (relating to imposition, rate, and attachment 
of tax on distilled spirits) is amended by striking out the last sentence 
of paragraph (1) and the last sentence of paragraph (3). 
(b) Section 5022 (relating to tax on cordials and liqueurs containing 
wine) is amended by striking out at the end of the first sentence "until 
July 1,1965, and on or after July 1,1965, at the rate of $1.60 per wine 
gallon and a proportionate tax at a like rate on all fractional parts of 
such wine gallon^'. 
(c) Section 5041 (b) (relating to rates of tax on wine) is amended— 
(1) by striking out in paragraph (1) ", except that on and 
after July 1, 1965, the rate shall be 15 cents per wine gallon"; 
(2) by striking out in paragraph (2) ", except that on and 
after July 1, 1965, the rate shall be 60 cents a wine gallon"; 
(3) by striking out in paragraph (3) ", except that on and 
after July 1, 1965, the rate shall be $2.00 per wine gallon"; 
(4) by striking out in paragraph (4) ", except that on and 
after July 1, 1965, the rate shall be $3.00 per wine gallon"; and 
(5) by striking out in paragraph (5) ", except that on and 
after July 1, 1965, the rate shall be $2.00 per wine gallon". 
(d) Section 5051(a) (relating to imposition and rate of tax on 
beer) is amended by striking out the second sentence. 
^*p**^* 
(e) Section 5063 f relating to floor stocks refunds on distilled spirits, 
wines, cordials, and oeer) is hereby repealed and the table of sections 
for subpart E of part I of subchapter A of chapter 51 is amended by 
striking out the item relating to section 5063. 
(f) Paragraph (1) of section 5701(c) (relating to rate of tax on 
cigarettes) is amended by striking out "until July 1, 1965, and $3.50 
per thousand on and after July 1,1965". 
Repeal. 
(g) Sectioii 5707 (relating to floor stocks refund on cigarettes) is 
hereby repealed and the table of sections for subchapter A of chapter 
52 is amended by striking out the item relating to section 5707. 
78"tS.^*237'*°' 
(^) .Section 497 of the Revenue Act of 1951 (relating to refunds 
26 use 5701 
on articles from foreign trade zones) is hereby repealed. 
SEC. 502. REPEAL OF TAX ON TOBACCO OTHER THAN CIGARS AND 
CIGARETTES. 
72 Stat. 1414. 
^^^ REPEAL.—Sectiou 5701 (relating to rates of taxes on tobacco, 
cigarsj cigarettes, etc.) is amended by striking out subsection (a) 
(relating to tobacco) and redesignating subsections (b), (c), (d), 
(e),ana (f) as subsections (a), (D), (C), (d), and (e), respectively. 
(b) 
CONFORMING AND CLERICAL AMENDMENTS.— 
(1) The heading of chapter 52 is amended by striking out 
"TOBACCO,". 
(2) The table of subchapters for chapter 52 is amended— 
(A) by striking out in the item relating to subchapter B 
"export warehouse proprietors, and dealers in tobacco materials" 
and inserting in lieu thereof "and export warehouse proprietors"; 
(B) bjr striking out the item relating to subchapter D 
and redesignating the items relating to subchapters E, F, and 
G as relating to subchapters D, E, and F, respectively; and 
(C) by striking out in the item relating to subchapter D 
note. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
151 
(as redesignated by subparagraph (B)) "export warehouse 
proprietors, and dealers in tobacco materials" and inserting in 
lieu thereof "and export warehouse proprietors". 
(3) Section 5702 (relating to definitions applicable to the taxes pJa\^*^*\64^^' 
on tobacco, cigars, cigarettes, etc.) is amended— 
(A) by striking out subsections (a), (1), and (m) and 
redesignating subsections (b), (c), (d), (e), (f), (g), (h), 
(i), (j), (k), (n), and (o) as subsections (a), (b), (c), (d), 
(e), (f), (g), (h), (i), (j), (k),and (1), respectively; 
(B) by striking out "manufactured tobacco, cigars, and" 
in subsection (c) (as redesignated) and inserting in lieu 
thereof "cigars and"; and 
(C) by striking out subsection (d) (as redesignated) and 
inserting in lieu thereof the following: 
"(d) 
MANTJTACTURER OF TOBACOO PRODUCTS.—^'Manufacturer 
of 
tobacco products' means any person who manufactures cigars or ciga-
rettes, except that such term shall not include— 
"(1) a person who produces cigars or cigarettes solely for his 
own personal consumption or use; or 
"(2) a proprietor of a customs bonded manufacturing ware-
house with respect to the operation of such warehouse." 
(4) Section 
5704 
(relating to exemption 
from tax) is 
^^ ^
*
^
*
* ^"*-
amended— 
(A) by striking out subsection (c) and redesignating sub-
sections (d) and (e) as (c) and (d),respectively; and 
(B) by striking out subsection (c) (as redesignated) and 
inserting in lieu wiereof the following: 
"(c) 
TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES R E -
LEASED IN BOND FROM CUSTOMS CUSTODY.—Tobacco products and cig-
arette papers and tubes, imported or brought into the L^nited Statues, 
may be released from customs custody, without payment of tax, for 
delivery to a manufacturer of tobacco products or cigarette papers 
and tubes, in accordance with such regulations and under such bond 
as the Secretary or his delegate shall prescribe." 
(5^ The heading of subchapter B of chapter 52 is amended by 
striking out "Export Warehouse Proprietors, and Dealers in 
Tobacco Materials" and inserting in lieu thereof "and Export 
Warehouse Proprietors". 
(6) Section 5711(a) (relating to requirement for bond) is 
amended by striking out "as an export warehouse proprietor, or 
as a dealer in tobacco materials," and inserting in lieu thereof 
"or as an export warehouse proprietor,". 
(7) Chapter 52 (relating to cigars, cigarettes, and cigarette 
papers and tubes) is amended by striking out subchapter D and 
redesignating subchapters E, F, adld G as subchapters D, E, and 
F, respectively. 
(8) The heading of subchapter D (as redesignated) is amended 
by striking out "Export Warehouse Proprietors, and Dealers 
in Tobacco Materials" and inserting in lieu thereof "and Export 
Warehouse Proprietors". 
(9) Section 5741 (relating to records) is amended by striking 
out "every export warehouse proprietor, and every dealer in 
tobacco materials" and inserting in lieu thereof "and every export 
warehouse proprietor,". 
152 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
(10) The table of sections for subchapter E (as redesignated) 
is amended by striking out in the item relating to section 5753 
"cigarette papers and tubes, and tobacco materials" and inserting in 
lieu thereof "and cigarette papers and tubes". 
72 Stat. 1425. 
(H) Section 5753 (relating to disposal of forfeited, condemned, 
and abandoned tobacco products, cigarette papers and tubes, and 
tobacco materials) is amended to read as follows: 
**SEC. 5753. DISPOSAL OF FORFEITED, CONDEMNED, AND ABANDONED 
TOBACCO PRODUCTS, AND CIGARETTE PAPERS AND 
TUBES. 
"If it appears that any forfeited, condemned, or abandoned tobacco 
products, or cigarette papers and tubes, when offered for sale, will not 
bring a price equal to the tax due and payable thereon, and the expenses 
incident to the sale thereof, sUch articles shall not be sold for con-
sumption in the United States but shall be disposed of in accordance 
with such regulations as the Secretary or his delegate shall prescribe." 
(12) Section 
5762 
(relating 
to" criminal 
penalties) 
is 
amended— 
(A) by striking out "as an export warehouse proprietor, 
or as a dealer in tobacco materials" iii subsection (a) (l) and 
inserting in lieu thereof "or as an export warehouse proprie-
tor,"; and 
(B) by striking out subsection (a) (2) and inserting in 
lieu thereof the following: 
"(2) 
FAILING TO FURNISH INFORMATION OR FURNISHING FALSE 
INFORMATION.—Fails to keep or make any record, return, report, 
or inventory, or keeps or makes any false or fraudulent record, 
rettirn, report, or inventory, required by this chapter or regula-
tions thereynder; or". 
(13) Section 5763 (relating to forfeitures) is amended— 
(A) by gtriking out subsection (b) and inserting in lieu 
thereof the following: 
"(b) 
PERSONAL PROPERTY OF QUALIFIED MANUFACTURERS, AND 
EXPORT 
WAREHOUSE 
PROPRIETORS, 
ACTTING 
W I T H 
INTENT 
TO 
DEFRAUD.—All tobacco products and cigarette papers and tubes, pack-
ages, internal revenue stamps, machinery, fixtures, equipment, and 
all other materialrs and personal property on the premises of any 
qualified manufacturer of tobacco products or cigarette papers and 
tubes, or export warehouse proprietor, who, with intent to defraud 
the United States, fails to keep or make any record, return, report, or 
inventory, or keeps or makes any false or fraudulent record, return, 
report, or inventory, required by this chapter; or refuses to pay any 
tax imposed by this chapter, or attempts in any manner to evade or 
defeat the tax or the payment thereof; or removes, contrary to any 
provision of this chapter, any article subject to tax under this chapter, 
shall be f 
orf 
eiteid to tjie United States." and 
(B) by striking out subsection (c) and inserting in lieu 
thereof the following: 
"(c) 
EEAL AND PERSONAL PROPERTY OF ILLICIT OPERATORS.—All 
tobacco products, cigarette papers and tubes, machinery, fixtures, 
equipment, and other materials and personal property on the premises 
or any person engaged in business as a manufacturer of tobacco prod-
ucts or cigarette papers and tubes, or export warehouse proprietor, 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1%5 
153 
without filing the bond or obtaining the permit, as required by this 
chapter, together with all his right, title, and interest in the building in 
which such business is conducted, and the lot or tract of ground on 
which the building is located, shall be forfeited to the United States." 
TITLE VI—ADMINISTRATIVE PROVISIONS 
SEC. 601. TECHNICAL AND CONFORMING CHANGES. 
(a) Section 6103(a) (relating to public record and inspection of 
SSA stat. 753. 
returns) is amended by striking out "B, C, and D" in paragraph (2) 
and inserting in lieu thereof "B and C". 
(b) Section 6415 (relating to credits or refunds to persons who 
collected certain taxes) is amended— 
(1) by striking out "section 4231(1), 4231(2), 4231(3), 4241, 
4251, 4261, or 4286" each place it appears and inserting in lieu 
thereof "section 4251 or 4261"; and 
(2) by striking out the last sentence of subsection (a). 
(c) Section 6416 (relating to credits and refunds of certain taxes 
H f
*
^
*
- i^^ff-
on sales and services) is amended— 
(1) by striking out in the material in subsection (a) (1) which 
precedes subparagraph (A) "section 4231 (4), (5), or (6) (caba-
rets, etc.),"; 
(2) by striking out ", admission, or service" each place it 
appears in subsection ( a ) ( 1 ) ( A ) ; 
(3) by amending subparagraph (B) of subsection (a)(1) to 
read as follows: 
"(B) has repaid the amount of the tax to the ultimate 
purchaser of the article;"; 
(4) by striking out "or (D)" in subsection (a) (1) (C); 
(5) by striking out "(i), (ii), or (iii), as the case may be," in 
subsection ( a ) ( 1 ) ( D ) ; 
(6) by striking out subparagraphs (A) and (B) of subsection 
(a) (3), by striking out "(ii)" m subparagraph (C) of such sub-
section, and by striking out "or ( D ) " in subparagraph (D) of 
such subsection; 
(7) by striking out "31 or" and " (in the case of a tax imposed 
by chapter 32)" in subsection (b) (1); 
(8) by amending subparagraph (F) of subsection (b) (2) to 
read as follows: 
"(F) in the case of a tire or inner tube, resold for use as 
provided in subparagraph (C) of paragraph (3) and the 
other article referred to in such subparagraph is by any 
person exported or sold as provided in such subparagraph;"; 
(9) by striking out subparagraphs (N), (O), (P), and (Q) 
of subsection (b) (2); 
(10) by striking out "(D)," in subparagraph (A) of subsec-
tion (b)(3), by striking out subparagraph (D) of such sub-
section, and by amending subparagraphs (B) and (C) of such 
subsection to read as follows: 
"(B) in the case of a part or accessory taxable under 
section 4061(b), such article is used by the second manufac- 
^"'®' P- ^37. 
turer or producer as material in the manufacture or produc-
tion of, or as a component part of, any other article manu-
factured or produced by him; 
49-850 0-66—13 
154 
PUBLIC L
A
W 89-44-JUNE 21, 1%5 
[79 STAT. 
70 Stat. 388. 
"(C) in the case of a tire or inner tube taxable under 
section 40Y1, such article is sold by the second manufacturer 
or producer on or in connection with, or with the sale of, 
any other article manufactured or produced by him and such 
other article is by any person exported, sold to a State or 
local government for the exclusive use of a State or local 
government, sold to a nonprofit educational organization for 
its exclusive use, or used or sold for use as supplies for vessels 
or aircraft;"; 
(11) by amending paragraph (4) of subsection (b) to read as 
follows: 
" (4) TIRES AND INNER TUBES.—If— 
" (A) a tire or inner tube taxable under section 4071 is sold 
by the manufacturer, producer, or importer thereof on or in 
connection with, or with the sale of, any other article manu-
factured or produced by him; and 
"(B) such other article is by any person exported, sold to 
a State or local government for the exclusive use of a State or 
local government, sold to a nonprofit educational organiza-
tion for its exclusive use, or used or sold for use as supplies 
for vessels or aircraft, 
any tax imposed by chapter 32 in respect of such tire or inner 
tube which has been paid by the manufacturer, producer, or 
importer thereof shall be deemed to be an overpayment by him."; 
(12) by striking out "4053(b) (1) or" each place it appears in 
subsection (b) (5). 
(13) by amending subsection (c) to read as follows: 
"(c) CREDIT FOR TAX PAID ON TIRES OR INNER TUBES.—If tires or 
inner tubes on which tax has been paid under chapter 32 are sold on or 
in connection with, or with the sale of, another article taxable under 
chaj)ter 32, there shall (under regulations prescribed by the Secretary 
or his delegate) be credited (without interest) against the tax imposed 
on the sale of such other article, an amount determined by multiplying 
the applicable percentage rate of tax for such other article by— 
"(1) the purchase price (less, in the case of tires, the part 
of such price attributable to the metal rim or rim base), if such 
tires or inner tubes were taxable under section 4071 (relating to 
tax on tires and inner tubes); or 
"(2) if such tires or inner tubes were taxable under section 
72 Stat. 1281. 
4218 (relating to use by manufacturer, producer, or importer), 
the price (less, in the case of tires, the part of such price attribut-
able to the metal rim or rim base) at which such or similar tires 
or inner tubes are sold, in the ordinary course of trade, by manu-
facturers, producers, or importers thereof, as determined by the 
Secretary or his delegate. 
The credit provided by this subsection shall be allowable only in 
respect of the first sale on or in connection with, or with the sale of, 
another article on the sale of which tax is imposed under chapter 32."; 
(14:) by striking out subsection (d); and 
(15) subsection (g) is amended by striking out "sections 
4061(a), 4111, 4121, 4141," and inserting in lieu thereof "section 
4061(a),". 
6
8
A Stat. 829. 
(^) Sectiou 6802 (relating to supply and distribution of stamps) 
is amended— 
(1) by striking out" (other than the stamps on playing cards)" 
in paragraph (1) ; and 
(2) by striking out paragraph (3). 
72 Stat. 1429. 
Ante, p. 149. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
155 
(e) Section 6806 (relating to posting occupation tax stamps) is 
®^^ ^*^*' ^'^* 
amended by striking out "AMUSEMENT AND" in the heading of sub-
section (b). 
(f) Section 6808 (relating to special provision relating to stamps) 
is amended by striking out paragraphs (1) and (9). 
(g) Section 7012 (relating to cross references) is amended by strik-
ing out subsection (d). 
(h) Section 7272(D) (relating to cross references) is amended by 
strikmg out "4455,". 
(i) Section 7275 (relating to failure to print correct price on tickets) 
is repealed and the table of sections for subchapter B of chapter 75 
is amended by striking out the item relating to section 7275. 
(j) Section 7S26(a) (relating to disposal of forfeited or abandoned 
property in special cases) is amended h^ striking out "section 4462 
(a) (2)" and inserting in lieu thereof "section 4462". 
TITLE VII—EFFECTIVE DATES OF 
TITLES I-VI 
SEC. 701. EFFECTIVE DATES. 
(a) RETAILERS AND MANUFACTURERS EXCISE TAXES.— 
(1) I N GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by titles I and I I of this Act shall 
apply with respect to articles sold on or after the day after the 
date of the enactment of this Act. 
(2) SPECIAL RULES.—The amendments made by sections 201 
(b) (2) (relating to automobile parts and accessories) and 202(a) 
(relating to lubricating oil) shall apply with respect to 
articles sold on or after Januarv 1,1966. The amendments made 
by section 202 (b) and (c) (relating to payments with respect to 
lubricating oil) shall take effect January 1, 1966. The amend-
ments made by section 203, insofar as they relate to the tax imposed 
by section 4131 (relating to electric light bulbs) of the Code, and 
the amendments made by section 208, insofar as they relate 
to the tax imposed by section 4061(b) 
(relating to auto-
motive parts and accessories), section 4091 (relating to lubricating 
oil), or section 4131 (relating to electric light bulbs) of the Code, 
shall apply with respect to articles sold on or after January 1, 
1966. 
The amendments made by sections 207 (relating to partial 
payments; sales of installment accounts) and 209(a) (relating to 
floor stocks refunds on passenger automobiles, etc.) shall take 
effect on the day after the date of the enactment of this Act. The 
amendments made by section 210 (relating to Highway Trust 
Fund) shall take effect January 1,1966. 
(3) INSTALLMENT SALES, ETC.—For purposes of paragraphs (1) 
and (2), an article shall not be considered sold oefore the day 
after the date of the enactment of this Act or before January 1, 
1966, as the case may be, unless possession or right to posse^^ion 
passes to the purchaser before such day or such date. Iti the 
case of— 
^A) a lease, 
(B) a contract for the sale of an article where it is pro-
vided that the price shall be paid by installments and title 
to the article sold does not pass until a future date notwith-
standing partial payment by installments. 
156 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
(C) a conditional sale, or 
(D) a chattel mortgage arrangement wherein it is pro-
vided that the sale price shall be paid in installments, 
entered into before such day or such date, payments made on or 
after such day or such date with respect to the article leased or 
sold shall, for purposes of this subsection, be considered as pay-
ments made with respect to an article sold on or after such day 
or such date, if the lessor or vendor establishes that the amount 
of payments payable on or after such day or such date with respect 
to such article has been reduced by an amount equal to the tax 
reduction applicable with respect to the lease or sale of such article. 
(4) 
ELECTRIC LIGHT BULBS USED IN MANUFACTURE OF ARTICLES 
UPON WHICH TAX IS REPEALED.—For purposes of applying section 
4218(a) of the Code with respect to the use of an electric light 
bulb or tube by the manufacturer, producer, or importer thereof, 
and for purposes of applying section 4221(d) (6) (A) of the Code 
with respect to the sale of an electric light bulb or tube for use in 
further manufacture, an article which was taxable under chapter 
32 of the Code on the date of the enactment of this Act shall, 
during the period beginning with the day after the date of the 
enactment of this Act through December 31, 1965, be treated as 
an article taxable under such chapter, 
(b) 
FACILITIES AND SERVICES TAXES.— 
(1) 
ADMISSIONS AND CLUB DUES.— 
(A) The amendments made by sections 301 and 305 insofar 
as they relate to the taxes imposed by section 4231 of the Code, 
shall apply with respect to admissions, services, or uses after 
noon, December 31, 1965, 
(B) The amendments made by sections 301 and 305 insofar 
as they relate to the taxes imposed by section 4241 of the 
Code, shall apply with respect to— 
(i) dues and membership fees attributable to periods 
beginning on or after January 1,1966; 
(ii) initiation fees (other than initiation fees to which 
clause (iii) applies) and amounts paid for life member-
ships attributable to memberships beginning on or after 
January 1,1966; 
(iii) initiation fees paid on or after July 1, 1965, to 
a new club or organization which first makes its facilities 
available to members on or after such date; and 
(iv) in the case of amounts described in section 
4243(b) of the Code, 3-year periods beginning on or 
after January 1, 1966. 
(2) 
COMMUNICATIONS.— 
(A) The amendments made by section 302 (relating to 
communication services) shall apply to amounts paid pur-
suant to bills rendered on or after January 1,1966, for services 
rendered on or after such date. In the case of amounts paid 
pursuant to bills rendered on or after January 1, 1966, for 
services which were rendered before such date and for which 
no previous bill was rendered, such amendments shall apply 
except with respect to such services as were rendered more 
than 2 months before such date. In the case of services ren-
dered more than 2 months before such date, the provisions of 
72 Stat. 1289. 
Subchapter B of chapter 33 of the Code in effect at the time 
such services were rendered shall apply to the amounts paid 
for such services. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
157 
(B) Section 4251(b) of the Code, as in effect June 30, ^Jl^^^,%\^^'' 
1965, is repealed effective on and after July 1,1966. 
(3) TRANSPORTATION OF PERSONS BY AIR.—Tne amendments made 
by section 303 shall apply with respect to amounts paid for trans-
portation, and amounts paid for accommodations in connection 
with transportation, beginning on or after July 1,1965. 
(4) SAFE DEPOSIT BOXES.—The amendments made by section 304 
shall apply with respect to use periods beginning on or after 
July 1,1965. 
(c) 
MISCELLANEOUS TAXES.— 
(1) The amendments made by section 401 (relating to docu-
mentary stamp taxes) shall apply on and after January 1, 1966. 
(2) The amendments made by section 402 (relating to playing 
cards) and by subsection (c) of section 405 shall apply on and 
after the day after the date of the enactment of this Act. 
The 
amendments made by sections 403 (relating to occupational tax 
on coin-operated devices) and 404 (relating to occupational tax 
on bowling alleys, billiard and pool tables), and by subsections 
(a), (b), and (d) of section 405 (relating to technical and con-
forming changes) shall apply on and after July 1,1965. 
(d) ALC!OHOL AND TOBACCO EXCISE TAXES.—The amendments made 
by section 501 shall apply on and after July 1,1965. The amendments 
made by section 502 shall apply on and alter January 1, 1966. 
(e) ADMINISTRATIVE PROVISIONS.—Each amendment made by title 
VI, to the extent it relates to any tax provision changed by this Act, 
shall take effect in a manner consistent with the effective date for such 
changed tax provision. 
TITLE VIII—MISCELLANEOUS STRUC-
TURAL CHANGES 
SEC. 801. MOTOR VEHICLES. 
(a) EXEMPTIONS FROM TAX.—Subsection (a) of section 4063 (relat- 
SSA stat. 482. 
ingto specific articles exempt from the tax on automobiles) is amended 
to read as follows: 
"(a) 
SPECIFIED ARTICLES.— 
"(1) 
CAMPER 
COACHES; 
BODIES FOR SELF-PROPELLED 
MOBILE 
HOMES.—The tax imposed under section 4061 shall not apply in 
^"'^'PP- ^^e. i37. 
the case of articles designed (A) to be mounted or placed on 
automobile trucks, automobile truck chassis, or automobile 
chassis, and (B) to be used primarily as living quarters. 
" (2) FEED, SEED, AND FERTILIZER EQUIPMENT.—The tax imposed 
under section 4061 shall not apply in the case of any body, part 
or accessory primarily designed— 
" (A) to process or prepare seed, feed, or fertilizer for use 
on farms; 
"^B) to haul feed, seed, or fertilizer to and on farms; 
^'(C) to spread feed, seed, or fertilizer on farms; 
"(D) to load or unload feed, seed, or fertilizer on farms; 
or 
" ( E ) for any combination of the foregoing. 
^'(3) HOUSE TRAILERS.—The tax imposed under section 4061 (a) 
shall not apply in the case of house trailers. 
158 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
Ante, p. 136. 
68A Stat. 481. 
"(4) SMALL 3-WHEELED TRUCKS.—The tax imposed under sec-
tion 4061 (a) shall not apply in the case of— 
" (A) an automobile truck chassis which— 
"^i) has only 3 wheels, 
"(ii) is powered by a motor which does not exceed 
18 brake horsepower (rated at 4,000 revolutions per 
minute), and 
"(iii) does not exceed 1,000 pounds gross weight; or 
"(B) a body designed primarily to be mounted on a chassis 
described in subparagraph (A)." 
(b) 
MANUFACTURERS' PRICE OF TRUCKS IN W H I C H USED PARTS ARE 
26'us*c*42?6!* 
INCORPORATED.—Section 4216 (relating to definition of price) is 
amended by adding at the end thereof the following new subsection: 
"(g) 
CERTAIN TRUCKS INCORPORATING USED COMPONENTS.—For 
purposes of the tax imposed by section 4061 (a) (1) (relating to trucks, 
buses, etc.), in determming the price for which an article is sold, the 
value of any component of such article shall be excluded from the 
price, if— 
"(1) such component is furnished by the first user of such 
article, and 
"(2) such component has been used prior to such furnishing." 
(c) 
REBUILDING or 
PARTS NOT CONSIDERED MANUFACTURING.— 
72 Stat. 1283. 
Paragraph (6) of section 4221(d) (relating to tax-free sales for use 
in further manufacture) is amended by adding at the end thereof 
the following new sentence: 
"For purposes of subparagraph (B), the rebuilding of a part or 
78 Stat. 1086. 
acccssoTy which is exempt from tax under section 4063(c) shall 
not constitute the manufacture or production of such part or 
accessory." 
(d) 
SCHOOL BUSES.— 
(1) TAX-FREE SALES.—Subsection (e) of section 4221 (relating 
to certain tax-free sales) is amended by adding at the end thereof 
the following new paragraph: 
"(6) SCHOOL BUSES.—Under regulations prescribed by the 
Secretary or his delegate, the tax imposed by section 4061(a) 
shall not apply to a bus sold to any person for use exclusively in 
transporting students and employees of schools operated by State 
or local governments or by nonprofit educational organizations. 
For purposes of this paragraph, incidental use of a bus in provid-
ing transportation for a State or local government or a nonprofit 
organization described in section 501(c) which is exempt from 
74^st^t!*534^^^* 
*^x under section 501 (a) shall be disregarded." 
72 st'at. 1306. 
(2) CREDITS O
R REFUNDS.—SubscctioD (b) (2) of sectiou 6416 
(relating to special cases in which tax payments are considered 
overpayments) is amended by adding at the end thereof the 
following new subparagraph: 
"(R) in the case of a bus chassis or body taxable under 
section 4061(a), sold to any person for use as described in 
section 4221(e) (5)." 
(e) EFFECTIVE DATES.^—The amendments made by subsections (a), 
(b), and (d) shall apply with respect to articles sold on or after the 
day after the da*© or the enactment of this Act. 
The amendment 
made by subsection (c) shall apply with respect to articles sold on 
or after January 1,1965. 
73 Stat. 615, 
Ante, p. 137. 
68A Stat. 848. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
159 
SEC. 802. GASOLINE. 
(a) 
DEFINITLON OF GASOLINE.— 
(1) I N GENERAL.—Subsection (b) of section 4082 (relating to 
^^A stat. 483. 
dennition of gasoline) is amended to read as follows: 
"(b) GASOLINE.—^As used in this subpart, the term 'gasoline' means 
all products commonly or commercially known or sold as gasoline 
which are suitable for use as a motor fuel." 
(2) CASINGHEAD AND NATURAL GASOLINE.—Section 4041 (b) 75^stlt!*i2'3*^^' 
(relating to special motor fuels) is amended by inserting after 
"liquefied petroleum gas," in the material preceding paragraph 
(1) "casinghead and natural gasoline,". 
(b) 
REPEAL OF BONDING REQUIREMENTS.— 
(1) Section 4082(d)(2) 
(relating to definition of wholesale 
distributors) is amended by striking out "and give a bond". 
(2) Section 4101 (relating to registration and bond) is 
^^^ ^*^*- '*^'*-
amended to read as follows: 
•*SEC. 4101. REGISTRATION. 
"Every person subiect to tax under section 4081 or section 4091 
^o f
*
^
*
- \^}[ 
1 
ft 
1 
It 
' 
' 
^' 
1 • ! • 
(• 
1 
^ 
1' 
Ante. 
r>. 137 
shall, before incurring any liability for tax under such sections, reg-
ister with the Secretary or his delegate," 
(3) Section 7103(d)(3) 
(relating to cross references) 
is 
amended by striking out the semicolon at the end of subparagraph 
(E) and inserting m lieu thereof a period, and by striking out 
subparagraph (F). 
(4) Section 7232 (relating to failure to register or give bond, or 
false statement by manufacturer or producer of gasoline or lub-
ricating oil) is amended— 
(A) bjr striking out "OR GIVE BOND" in the heading of 
such section; 
(B) by striking out "or give bond" in the text of such sec-
tion; and 
(C) by striking out "and bonded" in the text of such 
section. 
(5) The table of sections for subpart C of part I I I of subchap-
ter A of chapter 32 is amended by striking out, in the item relating 
to section 4101, "and bond". 
(6) The table of sections for part I I of subchapter A of chap-
ter 75 is amended by striking out, in the item relating to section 
7232, "or give bond". 
(c) EXCEPTION TO REGISTRATION IN CASE OF VESSEI^S AND AIRCRAFT.— 
Section 4222(b) (relating to exceptions to registration) is amended by 
^^ stat. i284. 
adding at the end thereof the following new paragraph: 
"(5) SUPPLIES FOR VESSELS OR AIRCRAFT.—Subsection (a) shall 
not apply to a sale of an article for use by the purchaser as sup-
plies for any vessel or aircraft if such purchaser complies with 
such regulations relating to the use of exemption certificates in 
lieu of registration as the Secretary or his delegate shall prescril>e 
to carry out the purpose of this paragraph." 
(d) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a)(1), (b), and (c) 
shall apply with respect to articles sold on or after July 1,1965. 
(2) The amendment made by subsection (a)(2) shall apply 
with respect to casinghead and natural gasoline sold or used on 
or after July 1,1965, except that such amendment shall not apply 
to a sale or u ^ of casinghead or natural gasoline which was sold 
160 
PUBLIC L
A
W 89-44-JUNE 21, 1965 
[79 STAT. 
by a producer or importer before such date if tax under section 
4081 of the Code (as in effect prior to the amendment made by 
75^stat^*i23*^' 
subsectiou (a) (1)) was imposed with respect to such sale. 
SEC. 803. CERTAIN TRANSPORTATION OF MEMBERS OF THE ARMED 
FORCES WHILE ON LEAVE. 
(a) 
TREATMENT AS UNINTERRUPTED INTERNATIONAL AIR TRANS-
76 Stat. 117. 
PORTATION.—Sectiou 4262(c)(3) (relating to definition of uninter-
rupted international air transportation) is amended by adding after 
subparagraph (B) the following new sentence: 
"For purposes of this paragraph, in the case of personnel of 
the United States Armj, Air Force, Navy, Marine Corps, and 
Coast Guard traveling m uniform at their own expense when on 
official leave, furlough, or pass, the scheduled interval described 
in subparagraph (A) shall be deemed to be not more than 6 hours 
if a ticket for the subsequent portion of such transportation is 
purchased within 6 hours after the end of the earlier portion 
of such transportation and the purchaser accepts and utilizes 
the first accommodations actually available to him for such sub-
sequent portion." 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply with respect to amounts paid for transportation beginning 
on or after July 1,1965. 
SEC. 804. POLICIES ISSUED BY FOREIGN INSURERS. 
(a) 
PAYMENT OF TAX BY RETURN.— 
72 Stat. 1301. 
(1) Section 4374 (relating to affixing of stamps) is amended 
bjr adding at the end thereof the following new sentence: "Not-
withstanding the preceding sentence, the Secretary or his delegate 
may, by regulations, provide that the tax imposed by section 4371 
shall be paid on the basis of a return." 
(2) The heading for section 4374 is amended to read as follows: 
*SEC. 4374. PAYMENT OF TAX." 
(3) The table of sections for subchapter D of chapter 34 is 
amended by striking out the item relating to section 4374 and 
inserting in lieu thereof the following: 
"Sec, 4374. Payment of tax." 
(b) 
TAX IMPOSED ON PREMIUMS PAID.—Section 4371 (relating to 
tax on policies issued by foreign insurers) is amended by adding at 
the end thereof the following new sentence: 
"If the tax imposed by this section is paid on th^ basis of a return 
under regulations prescribed under section 4374, the tax under para-
graphs (1), (2), and (3) shall be computed on the premium paid in 
lieu of the premium charged." 
(c) EFFECTIVE DATES.—The amendments made by subsection (a) 
shall take effect on July 1, 1965. The amendments made by sub-
section (b) shall apply with respect to policies, bonds, and contracts 
with respect to which the tax imposed by section 4371 of the Code is 
required to be paid on the basis of a return. 
SEC. 805. DISTILLED SPIRITS. 
(a) RErruRN OF DISTILLED SPIRITS TO BONDED PREMISES.—Section 
72 Stat. 1326. 
5008(d) (2) (relating to the return of spirits to bonded premises) is 
amended by striking out "; and no claim shall be allowed in respect 
to any distilled spirits withdrawn from the bonded premises of a 
distilled spirits plant more than 6 months prior to the date of such 
return". 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
161 
(b) EXEMPTION FROM REcnncATioisr TAX.—Section 5025 (relating 
^^ ^*^*- ^•'^^• 
to exemptions from rectification tax) is amended by redesignating 
subsections (k) and (1) as subsections (1) and (m), respectively, and 
by inserting after subsection (j) the following new subsection: 
"(k) OTHER MINGLING OR TREATMENT OF DISTILLED SPIRITS,—The 
tax imposed by section 5021 shall not apply to the mingling of dis-
tilled spirits of the same class and type, or to the treatment of distilled 
spirits in such a manner as not to change the class and type of the 
distilled spirits, on bottling premises of a distilled spirits plant under 
such regulations as the Secretary or his delegate may prescribe." 
(c) VOLUNTARY DESTRUCTION OF SPIRITS.—The second sentence of 
section 5215(a) (relating to the return of tax-determined distilled 
spirits to bonded premises) is amended to read as follows: "Such 
returned distilled spirits shall immediately be destroyed, redistilled, 
or denatured, or may, in lieu of destruction, redistillation, or denatu-
ration, be mingled on bonded premises as authorized in section 5234 
(a)(1)(A), (a)(1)(D), or (a)(1)(E)." 
. 
(d) REDISTILLATION OF SPIRITS, ARTICLES, AND RESIDUES.—Section 
5223 (relating to the redistillation of spirits) is amended by redesig-
nating subsections (c) and (d) as subsections (d) and (e), respec-
tively, and by inserting after subsection (b) the following new sub-
section : 
"(c) REDISTILLATION OF ARTICLES AND RESIDUES.—Articles, contain-
ing denatured distilled spirits, which were manufactured under the 
provisions of subchapter D, and the spirits residues of manufacturing 
processes related thereto, may be received, and the distilled spirits 
therein recovered by redistillation, on the bonded premises of a dis-
tilled spirits plant authorized to produce distilled spirits, under such 
regulations as the Secretary or his delegate may prescribe." 
(e) RELANDING OF EXPORTED DISTILLED SPIRITS.—Section 5608(b) 
(relating to the unlawful relanding of distilled spirits) is amended 
by striking out "intentionally" and inserting in lieu thereof ", with 
intent to defraud the United States,". 
(f) CONFORMING AND CLERICAL AMENDMENTS.— 
(1) Section 5004(c) is amended by striking out "section 
5223 (d)" and inserting in lieu thereof "section 5223 (e)". 
(2) Section 5025(e) (3) is amended by striking out "or in recti-
fication under subsection (f); or" and inserting in lieu thereof 
"or for blending under subsection (f), or for other mingling or 
treatment under subsection (k) ; or". 
(3) Section 5025(f)(1) is amended by inserting ", differing 
as to type," after "whiskies". 
(4) Section 5025(f)(2) is amended by inserting ", differing 
as to type," after "brandies". 
(5) Section 5025(f) (4) is amended by inserting ", differing as 
to type," after "rums". 
(6) Section 5062(c) (1) is amended by striking out "within six 
^» ^*^*- ''^^' 
months of their release therefrom". 
(7) Section 5083 is amended by striking out paragraph (14) 
and inserting in lieu thereof the following: 
"(14) Other mingling or treatment of distilled spirits, 
see section 5025(k). 
"(15) Authorized addition of tracer elements, see sec-
tion 50250)." 
(8) The heading of section 5223 is amended by striking out 
"SPIRITS" and inserting in lieu thereof "SPIRITS, AR-
TICLES, AND RESIDUES". 
(9) The table of sections for subpart B of part I I of subchapter 
G of chapter 51 is amended by striking out "spirits" in the item 
162 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
72 Stat. 1365. 
relating to section 5223 and inserting in lieu thereof ''spirits, 
articles, and residues". 
(10) Section 5223(d) (as redesignated by subsection (d) of 
this section) is amended— 
(A) by inserting ", ARTICLES, AND RESIDUES" after " D I S -
TILLED SPIRITS" in the heading of such section; and 
(B) by inserting ", or by the redistillation of the articles 
or residues described in subsection (c)," after "denatured dis-
tilled spirits" in the text of such section. 
(11) Section 5234(a) (1) (B) is amended by striking out "or 
rectification under section 5025(f);" and inserting in lieu thereof 
", or for blending under section 5025(f), or for other mingling 
A'? ^*^*-^328; 
or treatment under section 5025 (k):". 
An.e,p. 161. 
( g ) EFFECTIVE D A T E S . -
(1) The amendments made by subsections (a), (c), (e), and 
(f) (6) shall take effect on July 1,1965. 
(2) The amendments made by subsections (b), (d), and (f) 
(other than paragraph (6)), shall take effect on October 1, 1965. 
SEC. 806. WINE. 
(a) CARBON DIOXIDE IN STILL WINES.—Section 5041(a) (relating 
to the imposition of tax on wines) is amended by striking out in the 
last sentence "0.256" and inserting in lieu thereof "0.277". 
(b) DELETION OF W I N E RESERVE INVENTORY PROVISIONS; PROVI-
SIONS RELATING TO USE OF SUGAR.— 
72 Stat. 1384. 
(]^j Sectlou 5383 (relating to amelioration and sweetening 
limitations for natural grape wines) is amended to read as 
follows: 
"SEC. 5383. AMELIORATION AND SWEETENING LIMITATIONS FOR NAT-
URAL GRAPE WINES. 
"(a) SWEETENING OF GRAPE WINES.—Any natural grape wine may 
be sweetened after fermentation and before taxpayment with pure 
dry sugar or liquid sugar if the total solids content of the finished wine 
does not exceed 12 percent of the weight of the wine and the alcoholic 
content of the finished wine after sweetening is less than 14 percent 
by volume; except that the use under this subsection of liquid sugar 
shall be limited so that the resultant volume will not exceed the volume 
which could result from the maximum authorized use of pure dry 
sugar only. 
"(b) 
HIGH ACID WINES.— 
"(1) I N GENERAL.—Before, during, and after fermentation, 
ameliorating material consisting of pure dry sugar or liquid sugar, 
water, or combination of sugar and water, may be added to natu-
ral grape wines of the winemaker's own production when such 
wines are made from juice having a natural fixed acid content of 
more than five parts per thousand (calculated before fermentation 
and as tartaric acid). 
"(2) LIMITATIONS.— 
"(A) Ameliorating material shall not reduce the natural 
fixed acid content of the juice to less than five parts per 
thousand. 
"(B) The volume of authorized ameliorating material shall 
not exceed 35 percent of the volume of juice (calculated 
exclusive of pulp) and ameliorating material combined. 
"(C) Sweetening material, consisting of pure dry sugar 
or liquid sugar, may be added to ameliorated wine in an 
amount which shall not increase its volume by more than 
0.0675 gallon per gallon of juice and ameliorating material 
combined. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
163 
"(D) Wine spirits may be added only if the juice or wine 
contains less than 14 percent of alcohol by volume. 
"(E) The total solids content of the finished wine shall 
not exceed 17 percent by weight if the alcoholic content is 
14 percent or more by volume, nor more than 21 percent by 
weight if the alcoholic content is less than 14 percent by 
volume." 
(2) Section 5384 (relating to amelioration and sweetening 
^^ ^*°*' ^^^'^• 
limitations for natural fruit and berry wines) is amended— 
(A) by striking out subsection (a) and inserting in lieu 
thereof the following: 
"(a) I N GENERAL.—To natural wine made from berries or fruit 
other than grapes, pure dry sugar or liquid sugar may be added to the 
juice in the fermenter, or to the wine after fermentation; but only if 
such wine has less than 14 percent alcohol by volume after complete 
fermentation, or after complete fermentation and sweetening, and a 
total solids content not in excess of 21 percent by weight; and except 
that the use under this subsection of liquid sugar shall be limited so 
that the resultant volume will not exceed the volume which could 
result from the maximum authorized use of pure dry sugar only."; 
(B) by striking out paragraph (1) of subsection (b) and 
inserting in lieu thereof the allowing: 
"(1) Any natural fruit or berry wine (other than grape wine) 
of a winemaker's own production may, if not made under sub-
section (a) of this section, be ameliorated to correct high acid 
content. 
Ameliorating material calculations and accounting 
shall be separate for wines made from each different kind of 
fruit."; 
(C) by striking out the first sentence of subsection (b) (2) 
and inserting in lieu thereof the following: "Pure dry sugar 
or liquid su^ar may be used in the production of wines under 
this subsection for the purpose of correcting natural deficien-
cies, but not to such an extent as would reduce the natural 
fixed acid in the corrected juice or wine to five parts per 
thousand."; 
(D) by striking out subparagraph (B) of subsection 
(b)(2) and inserting in lieu thereof the following: 
"(B) Juice adjusted with pure dry sugar or liquid sugar 
as provided in this paragraph shall be treated in the same 
manner as original natural juice under the provisions of sec-
tion 5383(b); except that if liquid sugar is used, the volume 
of water contained therein must be deducted from the volume 
of ameliorating material authorized;"; and 
(E) by strncing out in subsection (b) (2) (C) "may be 
withdrawn from reserve inventory with" and inserting in 
lieu thereof "shall have". 
(3) Section 5392 (relating to definitions) is amended— 
(A) by striking out the first sentence of subsection (c) 
and inserting in lieu thereof the following: "For purposes 
of this subchapter the term 'pure sugar' means pure r ^ n e d 
sugar, suitable for human consumption, having a dextrose 
equivalent of not less than 95 percent on a dry basis, and 
produced from cane, beets, or fruit, or from grain or other 
sources of starch."; and 
(B) by adding at the end thereof the following new sub-
section : 
"(^) LIQUID SUGAR.—For purposes of this subchapter the term 
'liquid sugar' means a substantially colorless pure sugar and water 
An te, p. 162. 
72 Stat. 1334. 
164 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
solution containing not less than 60 percent pure sugar by weight (60 
degrees Brix)." 
(c) 
CONFORMING AMENDMENTS.— 
72 Stat. 1384, 
(!) Sectiou 5382(h)(2) is amended by striking out "made 
without added sugar or reserved as provided in sections 5383(b) 
and 5384(b)". 
(2) Section 5384(b) (2) is amended by striking out "reserved" 
in the fourth sentence. 
(3) The heading of section 5384(b) is amended by striking out 
"RESERVE" and inserting in lieu thereof "AMELIORATED". 
(4) Section 5385(a) is amended by striking out "sugar solids 
content in excess of 15" and inserting in lieu thereof "total solids 
content in excess of 17". 
(d) 
EFFECITVE DATES.— 
(1) The amendment made by subsection (a) shall take effect 
on July 1,1965. 
(2) The amendments made by subsections (b) and (c) shall 
take effect on January 1,1966. 
SEC. 807. EXPORTATION OF LIQUORS TO POSSESSIONS. 
72 Stat. 1315, 
(g,) EXPORTATION.—Scctiou 5002(a) 
(relating to definitions) is 
amended by adding at the end thereof the following new paragraph: 
"(12) EXPORT.—^The terms 'export', 'exported', and 'exporta-
tion' shall include shipments to a possession of the United States." 
(b) CoNTORMiNG AMENDMENT.—Section 5053(a) is amended by 
striking out *'to a foreign country". 
(c) EFFECTIVB DATE.—^The amendments made by subsections (a) 
and (b) shall take effect on July 1,1965. 
SEC. 808. TOBACCO. 
Ante, p. 151. 
^^^ -Qgjj Q^ RECONSTITUTED TOBACCO AS A WRAPPER.—Section 5702 
(relating to definitions for purposes of the tobacco taxes) is amended 
by striking out subsections (a) and (b) (as^ redesignated by section 
502) and inserting in lieu thereof the foUowjftig: 
"(a) CIGAR.—'Cigar' means any roll ojr tobacco wrapped in leaf 
tobacco or in any substance containing tobacco (other than any roll 
of tobacco which is a cigarette within the meaning of subsection 
(b)(2)). 
"(b) CIGARETTE.—'Cigarette' means— 
"(1) any roll of tobacco wrapped in paper or in any substance 
not containing tobacco, and 
" (2) an;^ roll of tobacco wrapped in any substance containing 
tobacco which, because of its appearance, the type of tobacco used 
in the filler, or its packaging and labeling, is likely to be offered 
to, or purchased by, consumers as a cigarette described in para-
graph (1)." 
(b) 
CREDIT AS W E I X AS REFUND OF TAX PERMITTED.— 
72 Stat. 1419. 
(1) Scctiou 5705(a) (relating to refund of tax) is amended 
by striking out "REFUND.—Refund of any tax imposed by this 
chapter shall be made" and inserting in lieu thereof "CREDIT OR 
REFUND.—Credit or refund of any tax imposed by this chapter 
or section 7652 shall be allowed or made". 
(2) Section 5705(c) 
(relating to limitation on claim for 
refund) is amended by inserting "credit or" before "refund". 
(3) Section 7652 (a) (3) (relating to deposit of internal revenue 
collections on articles of JPuerto Rican manufacture) is amended 
by inserting "(less the estimated amount necessary for payment 
of refunds and drawbacks)" after "transported to the United 
States". 
68A Stat. 907. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
165 
72 Stat. 1419. 
(c) CLERICAL AMENDMENTS.— 
(1) The heading of section 5705 is amended by striking out 
"REFUND OR" and inserting in lieu thereof **GREI)IT, 
REFUND, OR". 
(2) The table of sections for subchapter A of chapter 52 is 
amended by striking out "Refund or" m the item relating to 
section 5705 and inserting in lieu thereof "Credit, refund, or". 
(d) 
EFFECTIVE DATES.— 
(1) The amendments made by subsections (a) and (b)(3) 
shall take effect on July 1,1965. 
(2) The amendments made by subsections (b)(1), (b)(2), and 
(c) shall take effect on October 1,1965. 
SEC. 809. INCOME TAX CREDIT IN LIEU OF PAYMENTS WITH RESPECT 
TO CERTAIN USES OF GASOLINE AND LUBRICATING OIL. 
(a) 
GASOLINE USED ON FARMS.— 
(1) I N GENERAL.—Section 6420 (relating to gasoline used on 
^° ^
*
^
*
* ®
^
-
farms) is amended— 
(A) by striking out "If" in subsection (a) and inserting 
in lieu thereof "Except as provided in subsection (h), if'; 
and 
(B) by redesi^ating subsection (h) as (i), and by insert-
ing after subsection (g) the following new suDsection: 
"(h) 
INCOME TAX CREDIT I N L I E U OF PAYMENT.— 
"(1) PERSONS NOT SUBJECT TO INCOME TAX.—Payment shall be 
made under subsection (a) with respect to gasoline used after 
June 30,1965, only to— 
"(A) the United States or an agency or instrumentality 
thereof, a State, a political subdivision of a State, or an agency 
or instrumentality of one or more States or political sub-
divisions, or 
"(B) an organization exempt from tax under section 
501 (a) (other than an organization required to make a return 
^^^ ^*°** ^^^* 
of the tax imposed under subtitle A for its taxable year). 
"(2) 
ALLOWANCE OF CREDIT AGAINST INCOME TAX.— 
"For allowance of credit against the tax imposed by 
subtitle A for gasoline used after June 30, 1965, see sec-
tion 39." 
^°«'' P- 167. 
(2) 
T I M E FOR FILING CLAIMS; PERIOD COVERED.—Subsection (b) 
of section 6420 (relating to time for filing claims; period covered) 
is amended to read as follows: 
"(b) 
TIME FOR FILING CLAIM; PERIOD COVERED.— 
"(1) GASOLINE USED BEFORE JULY i, i965.—Except as provided 
in paragraph (2), not more than one claim may be filed under 
this section by any person with respect to gasoline used during 
the one-year period ending on June 30 of any year. No claim 
shall be allowed under this paragraph with respect to any one-
year period unless filed on or before September 30 of the year in 
which such one-year period ends. 
"(2) GASOLINE USED AFTER .TUNE SO, IOCS.—In the case of 
gasoline used after June 30,1965— 
"(A) not more than one claim may be filed under this 
section by any person with respect to gasoline used during 
his taxable year; and 
"(B) no claim shall be allowed under this section with 
respect to gasoline used during any taxable year unless filed 
by such person not later than the time prescribed by law 
for filing an income tax return for such taxable year. 
166 
PUBLIC LAW 89-44-JUNE 21, 1965 
[79 STAT. 
For purposes of this paragraph^ a person's taxable year shall be 
his taxable year for j)urposes of subtitle A, except that a person's 
first taxable year beginning after June 30, 1966, shall include the 
period after June 30,1965, and before the beginning of such first 
taxable year." 
70 Stat. 89. 
^3^ TECHNICAL AMENDMENT.—Subsection (d) of section 6420 
(relating to exempt sales, etc.) is amended by striking out "paid" 
in the first sentence and inserting in lieu thereof "payable", 
(b) 
GASOLINE USED FOR CERTAIN NONHIGHWAY PURPOSES OR BY 
LOCAL TRANSIT SYSTEMS.— 
70 Stat. 394. 
^^j^ j ^ GENERAL.—Section 6421 (relating to gasoline used for 
certain nonhighway purposes or by local transit systems) is 
amended— 
(A) by striking out "If" in subsections (a) and (b) and 
inserting in lieu thereof "Except as provided in subsection 
(i), if"; and 
(B) by redesi^ating subsection (i) as (j), and by insert-
ing after subsection (h) the following new subsection: 
"(i) 
INCOME TAX CREDIT IN L-IEU OF PAYMENT.— 
"(1) PERSONS NOT SUBJECT TO INCOME TAX.—Payment shall be 
made under subsections (a) and (b) with respect to gasoline used 
after June 30,1965, only to— 
"(A) the United States or an agency or instrumentality 
thereoi, a State, a political subdivision of a State, or an 
agency or instrumentality of one or more States or political 
subdivisions, or 
68A Stat. 163. 
"(B) all orgauizatiou exempt from tax under section 501 (a) 
(other than an organization required to make a return of the 
tax imposed under subtitle A for its taxable year). 
"(2^ EXCEPTION.—Paragraph (1) shall not apply to a payment 
of a claim filed under subsection (c)(3)(B). 
"(3) 
ALLOWANCE OF CREDIT AGAINST INCOME TAX.— 
Tor allowance of credit against the tax imposed by 
subtitle A for gasoline used after June 30, 1965, see sec-
Post, p. 167. 
tion 39." 
(2) TIME FOR PILING CLAIMS; PERIOD COVERED.—Subsection (c) of 
72 Stat. 1312. 
sectiou 6421 (relating to time for filing claim; period covered) is 
amended— 
(A) by striking out "GENERAL RUT^E.—Except as provided 
in paragraph (2)" in paragraph (1) and inserting in lieu 
thereof "GASOLINE USED BEFORE JULY i, i965.—Except as pro-
vided in paragraphs (2) and (3)"; 
(B) by striking out "If" in paragraph (2) and inserting 
in lieu thereof "Except as provided in paragraph (3), if"; and 
(C) by adding at the end thereof tne following new para-
graph : 
" ( 3 ) 
GASOLINE USED AFTER J U N E 30, 1 9 6 5 . — 
" (A) I N GENERAL.—In the case of gasoline used after June 
30, 1965— 
"(i) except as provided in subpara,graph (B), not 
more than one claim may be filed under subsection (a), 
and not more than one claim may be filed under sub-
section (b), by any person with respect to gasoline used 
during his taxable year; and 
"(ii) no claim shall be allowed under this subpara-
graph with respect to gasoline used during any taxable 
year unless filed by sudi person not later than the time 
prescribed by law for filing an income tax return for such 
taxable year. 
68A Stat. 12. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
167 
For purposes of this paragraph, a person's taxable year shall 
be his taxable year for purposes of subtitle A, except that a 
person's first taxable year beginning after June 30, 1965, 
shall include the period after June 30, 1965, and before the 
beginning of such first taxable year. 
" (B) EXCEPTION.—If $1,000 or more is payable under this 
section to any person with respect to gasoline used during 
any of the first three quarters of his taxable year, a claim 
may be filed under this section by such person with respect 
to gasoline used during such quarter. No claim filed under 
this subparagraph shall be allowed unless filed on or before 
the last day of the first quarter following the quarter for 
which the claim is filed." 
(3) TECHNICAL AMENDMENT.—Subsection (e)(1) of section 
6421 (relating to exempt sales, etc.) is amended by striking out 
^° ^
*
^
*
* ^^''• 
"paid" in the first sentence and inserting in lieu thereof "payable". 
(c) CREDIT AGAINST INCOME TAX.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to credits allowable) is amended by 
renumbering section 39 as 40, and by inserting after section 38 the 
following new section: 
"SEC. 39. CERTAIN USES OF GASOLINE AND LUBRICATING OIL. 
"(a) GENERAL RULE.—There shall be allowed as a credit against 
the tax imposed by this subtitle for the taxable year an amount equal 
to the sum of the amounts payable to the taxpayer— 
"(1) under section 6420 with respect to gasoline used during 
the taxable year on a farm for farming purposes (determined 
without regard to section 6420(h)), 
"(2) under section 6421 with respect to gasoline used during 
the taxable year (A) otherwise than as a fuel in a highway 
vehicle or (B) in vehicles while engaged in furnishing certain 
public passenger land transportation service (determined without 
regard to section 6421 (i)), and 
"(3) under section 6424 with respect to lubricating oil used 
during the taxable year otherwise than in a highway motor vehicle 
(determined without regard to section 6424(g)). 
"*"'*' P* ^^''• 
"(b) TRANSITIONAL RULES.—For purposes of paragraphs (1) and 
(2) of subsection (a), a taxpayer's first taxable year beginning after 
June 30,1965, shall include the period after June 30,1965, and oefore 
the beginning of such first taxable year. For purposes of paragraph 
(3) o f subsection (a), a taxpayer's first taxable year beginning after 
December 31, 1966, shall include the period after December 31, 1965, 
and before the beginning of such first taxable year. 
"(c) EXCEPTION.—Credit shall not be allowed under subsection (a) 
for any amount payable under section 6421 or 6424, if a claim for such 
amount is timely filed, and under section 6421 (i) or 6424(g) is pay-
able, under such section." 
(d) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) The table of sections for subpart A of part IV of sub-
chapter A of chapter 1 is amended by striking out the item relat-
ing to section 39 and inserting in lieu thereof the following: 
"Sec. 39. Certain uses of gasoline and lubricating oil. 
"Sec. 40. Overpayments of tax." 
(2) Section 72 (n) (3) (relating to determination of taxable 
76 stat. 825. 
income for certain purposes) is amended by striking out "section 
31" and inserting in lieu thereof "sections 31 and 39". 
(3) Section 874(a) (relating to allowance of deduction and 
esAstat. 28i. 
credits of nonresident aliens) is amended by inserting before the 
period at the end thereof "or the credit provided by section 39 for 
certain uses of gasoline and lubricating oil". 
Ante, p. 165. 
Ante, p. 166. 
168 
PUBLIC LAW 89-44~JUNE 21, 1965 
[79 STAT. 
68A Stat. 767, 
^^\ (j^) Sectioii 6201(a) (relating to assessment authority of 
the Secretary or his delegate) is amended by adding at the end 
thereof the following new paragraph: 
" (4:) ERRONEOUS CREDIT FOR USE OF GASOLINE.—If on any return 
or claim for refund of income taxes under subtitle A there is an 
overstatement of the credit allowable by section 39 (relating to 
certain uses of gasoline and lubricating oil), the amount so over-
stated which is allowed against the tax shown on the return or 
which is allowed as a credit or refund may be assessed by the 
Secretary or his delegate in the same manner as in the case of a 
mathematical error appearing upon the return." 
(B) Section 6213(e) is amended by adding at the end thereof 
the following new paragraph: 
"(3) For assessment as if a mathematical error on the 
return, in the case of erroneous claims for credits under 
section 39, see section 6201(a)(4)." 
(5) (A) Section 6211(b) (relating to rules for applying the 
definition of a deficiency) is amended by adding at the end thereof 
the following new paragraph: 
"(4) The tax imposed by subtitle A and the tax shown on the 
return shall both be determined without regard to the credit 
Ante, p. 167. 
uudcr sectiou 39, unless, without regard to such credit, the tax 
imposed by subtitle A exceeds the excess of the amount specified 
in subsection (a) (1) over the amount specified in subsection 
(a)(2)." 
6
8
A Stat. 340. 
^^) Sectlou 1314(a) (1)(A) 
(relating to ascertainment of 
amount of adjustment) and section 1481 (o) (2) (A) (i) (relating 
to credit against repayment on account of renegotiation or allow-
ance) are amended oy striking out "(b) (1) and (3)" and insert-
ing in lieu thereof "(b) (1), (3),and (4)". 
6
8
A Stat. 791. 
^Q^ Sectlou 6401 (relating to amounts treated as overpay-
ments) is amended by striking out subsection (b) and inserting 
in lieu thereof the following: 
" (b) EXCESSIVE CREDITS UNDER SECTIONS 31 AND 39.—If the amount 
allowable as credits under sections 31 (relating to tax withheld on 
wages) and 39 (relating to certain uses of gasoline and lubricating 
oil) exceeds the tax imposed by subtitle A (reduced by the credits 
allowable under subpart A of part IV of subchapter A of chapter 1, 
other than the credits allowable under sections 31 and 39), the amount 
of such excess shall be considered an overpayment." 
(e) TRANSFERS FROM HIGHWAY TRUST FUND.—Section 209(f) of 
23 usc*i2o note 
^^^ Highway Revenue Act of 1956 (relating to expenditures from the 
Highway Trust Fund) is amended by adding at the end thereof the 
following new paragraph: 
"(6) 
TRANSFERS FROM THE TOUST FUND FOR INCOME TAX CREDITS 
ALLOWED FOR CERTAIN USES OF GASOLINE AND LUBRICATING OIL.—The 
Secretary of the Treasury shall pay from time to time from the 
Trust Fund into the general fund of the Treasury amoimts equiva-
lent to the credits allowed under section 39 of the Internal Rev-
enue Code of 1954 (relating to credit for certain uses of gaso-
line and lubricating oil) with respect to gasoline and lubricating 
oil used before October 1, 1972. Such amounts shall be trans-
ferred on the basis of estimates by the Secretary of the Treasury, 
and proper adjustments shall be made in amounts subsequently 
transferred to the extent prior estimate were in excess or less 
than the credits allowed." 
(f) EFFECTH^E DATES.—^The amendments made by subsections (a) 
and (b) shall apply with respect to gasoline used on or after July 1, 
1965. The amendments made by subsections (c) and (d) shall apply 
to taxable years beginning on or after July 1,1965. 
79 STAT. ] 
PUBLIC LAW 89-44-JUNE 21, 1965 
169 
SEC. 810. STATUTE OF LIMITATIONS ON ASSESSMENT AND COLLEC-
TION OF EXCISE TAXES. 
(a) BETURisr DEEMED FiiiED.—Subsection (b) of section 6501 (re- 
^^^ ^*^'' ®°^-
lating to time return deemed filed) is amended by adding at the end 
thereof the following new paragraph: 
"(4) BETDKN or EXCISE TAXES.—For purposes of this section, 
the filing of a return for a specified period on which an entry 
has been made with respect to a tax imposed under a provision of 
subtitle D (including a return on which an entry has been made 
showing no liability for such tax for such period) shall constitute 
the filing of a return of all amounts of such tax which, if properly 
paid, would be required to be reported on such return for such 
period." 
(b) SUBSTANTIAL OMISSIOK OF TAX ON KETUKN.— 
(1) I N GENERAL.—Subsection (e) of section 6501 (relating to 
limitations on assessment and collection where there is an omission 
from gross income) is amended by adding at the end thereof 
the following new paragraph: 
"(3) EXCISE TAXES^-rrln the case of a return of a tax imposed 
under a provision of subtitle D, if the return omits an amount of 
such tax properly includible thereon which exceeds 25 percent 
of the amount of such tax reported thereon, the tax may be 
assessed, or a proceeding in court for the collection of such tax 
may be begun without assessment, at any time within 6 years 
after the return is filed." 
(2) CLERICAL AMENDMENT.—The heading for subsection (e) 
of section 6501 is amended by striking out "OMISSION FROM GROSS 
INCOME" and inserting in lieu thereof "SUBSTANTIAL OMISSION OP 
ITEMS". 
(c) EFFECTIVE DATE.—The amendments made by subsections (a) 
and (b) shall apply with respect to returns filed on or after July 1, 
1965. 
SEC. 811. EXCHANGES FOR SALE OF POULTRY. 
(a) EXEMPTION FROM TAX.—^A corporation, association, or orga-
nization organized and operated exclusively for the purpose of pro-
viding an exchange for the sale of poultry for the poultry growers of 
a particular locality shall be treated for purposes of the Internal Rev-
enue Code of 1954 as an organization described in section 501(c) 7/stlt^*534^^^' 
(relating to list of exempt organizations) of such Code, if— 
(1) such corporation, association, or organization has no capi-
tal stock and is not organized for profit, 
(2) no member of the governing body of such corporation, 
association, or organization receives any compensation from such 
corporation, association, or organization, 
(3) the net earnings of such corporation, association, or orga-
nization (except 
for reasonable additions to reserves for the 
operation of such exchange) are devoted exclusively to dissemi-
nating information as to the best methods of poultry culture and 
to other agricultural purposes, and 
(4) at all times on and after June 10, 1965, and before the 
close of its last taxable year beginning before January 1, 1966, 
all of the net assets of such corporation, association, or organiza-
tion must, on liquidation for any reason, be transferred to an edu-
cational organization which is exempt from tax under section 
501(a) of such Code or which is an agency or instrumentality of, 
or is owned or operated by, a State. 
(b) APPLICATION OF SUBSECTION (a).—Subsection (a) shall apply 
to taxable years beginning after December 31,1953, and ending after 
August 16, 1954, which begin before January 1,1966. 
49-850 0-66—14 
170 
PUBLIC LAW 89-45-JUNE 22, 1965 
[79 STAT. 
68A Stat. 784; 
72 Stat. 1047. 
68A Stat. 525. 
SEC. 812. PROHIBITION UPON LEVIES ON MAIL. 
(a) I N GENERAL.—^^Section 6334(a) (relating to property exempt 
from levy) is amended by adding at the end thereof the following new 
paragrsaph: 
"(5) UNDELIVERED MAIL.—Mail, addressed to any 
person, 
which has not been delivered to the addressee." 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act. 
SEC. 813. STATE-CONDUCTED SWEEPSTAKES. 
(a) Section 4402 (relating to exemptions from the tax on wagers) 
is amended by striking out "and" at the end of paragraph (1), by 
striking out the period at the end of paragraph (2) and inserting ", or , 
and by adding at the end thereof the following new paragraph: 
"(3) STATE-CONDUCTED SWEEPSTAKES.—On any wager placed 
in a sweepstakes, watering pool, or lottery— 
"(A) which is conducted by an agency of a State acting 
under authority of State law, and 
"(B) the ultimate winners in which are determined by the 
results of a horse race, 
but only if such wdger is placed with the State agency conducting 
such sweepstakes, wagering pool, or lottery, or with its authorized 
employees or agents." 
(b) The amendment made by subsection (a) shall apply with respect 
to wagers placed after March 10, 1964. 
Approved June 21, 1965, 4:25 p.m. 
June 22, 1965 
[H. R. 1782] 
Public Law 89-45 
AN ACT 
To amend the Retired Federal Elmployees Health Benefits Act with resi)ect to 
Government contribution for expenses incurred in the administration of such 
Act. 
Retired Federal 
Employees Health 
Benefits Act, 
amendment. 
5 u s e 3052. 
Be it enacted hy the Senate and House of Representdtwes 
of the 
United States of America in Congress assembled^ That sections 4(b) 
and 6(c) of the Eetired Federal Employees Health Benefits Act (74 
Stat. 850 and 851; 5 U.S.C. 3053 (b) and 3055 (c)) are hereby repealed. 
SEC. 2. Section 8(a) of such Act (74 Stat. 851; 5 U.S.C. 3057(a)) 
is amended by adding at the end thereof the following sentence: "In 
addition, the Government shall contribute annually and there shall be 
deposited in the Fund amounts for payment of expenses incurred by 
the Commission in administering this Act." 
SEC. 3. Section 8(b) of such Act (74 Stat. 851; 6 U.S.C. 3057(b)) is 
amended to read as follows: 
"(b) The Fund shall be available without fiscal year limitation for 
all payments on account of the health benefits plan negotiated under 
section 3 of this Act, for payment of the Government's contribution 
provided for by section 6(a) of this Act to agencies of the Government 
which administer a retirement system for civilian employees of the 
Government, and for payment of expenses, within such limitations 
as maj^ b© specified annually in appropriation acts, incurred by the 
Commission in administering this Act." 
Approved June 22, 1965.