An Act relating to the treatment of charges for local advertising for purposes of determining the manufacturing sale price
PL 86-781 (H.R.12536), enacted 09/14/1960

74 STAT.] 
PUBLIC LAW 86-781-SEPT. 14, 1960 
lOlT! 
Public Law 86-781 
AN ACT 
Kelating to the treatment of charges for local advertising for purposes of 
determining the manufacturers sale price. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled^ That section 4216 
of the Internal Revenue Code of 1954 (relating to definition of price 
for purposes of the manufacturers excise tax) is amended by adding 
at the end thereof the following new subsection: 
"(f) EXCLUSION OF I.KX!AL ADVERTISING CHARGE FROM SALE PRICE.— 
" (1) EXCLUSION.—In determining, for purposes of this chapter, 
the price for which an article is sold, there shall be excluded a 
charge for local advertising (as defined in paragraph (4)) to the 
extent that such charge— 
"(A) does not exceed 5 percent of the price for which the 
article is sold (as determined under this section by excluding 
any charge for local advertising), 
"(B) is a separate charge made when the article is sold, and 
"(C) is intended to be refunded to the purchaser or any 
subsequent vendee in reimbursement of costs incurred for 
local advertising. 
In the case of any such charge (or portion thereof) which is not 
so refunded before the first day of the fifth calendar month 
following the calendar year during which the article was sold, 
the exclusion provided by the preceding sentence shall cease to 
apply as of such first day. 
"(2) 
AGGREGATE AMOUNT W^HICH MAY BE EXCLUDED.—In the 
case of articles upon the sale of which tax w^as imposed under the 
same section of this chapter— 
"(A) The sum of (i) the aggregate of the charges for 
local advertising excluded under paragraph (1), plus (ii) 
the aggregate of the readjustments for local advertising un-
der section 6416(b)(1) (relating to credits or refunds for 
price readjustments), shall not exceed 
"(B) 5 percent of the aggregate of the prices (determined 
under this section by excluding all charges for local advertis-
ing) at which such articles were sold in sales on which tax 
was imposed by such section of this chapter. 
The preceding sentence shall be applied to each manufacturer, 
producer, and importer as of the close of each calendar quarter, 
taking into account the items specified in subparagraphs (A) and 
(B) for such calendar quarter and preceding calendar quarters in 
the same calendar year. 
" (3) No ADJUSTMENT FOR OTHER ADVERTISING CHARGES.—Except 
to the extent provided by paragraphs (1) and (2), no charge or 
expenditure for advertising shall serve, for purposes of this sec-
tion or section 6416 (b) (1), as the basis for an exclusion from, 
or as a readjustment of, the price of any article. 
" (4) LOCAL ADVERTISING DEFINED.—For purposes of this section 
and section 6416(b) (1), the term 'local advertising' means only 
advertising which— 
" (A) is initiated or obtained by the purchaser or any sub-
sequent vendee, 
"(B) names the article for which the price is determinable 
under this section and states the location at which Such 
article may be purchased at retail, and 
"(C) is broadcast over a radio station or television station 
or appears in a newspaper." 
September 14, 1960 
[H. R. 12536] 
M an uf ac turers 
excise taxes. 
A d V e r t i s i n g 
charges. 
26 u s e 4216. 
Post, p. 1018. 
1018 
PUBLIC LAW 86-781-SEPT. 14, 1960 
[74 STAT. 
SEC. 2. The first sentence of paragraph (1) of section 6416(b) of 
26 use 6416. 
^YiQ Internal Revenue Code of 1954 (relating to credits or refunds for 
price readjustments) is amended by inserting after "or allowance," 
the following: "including (in the case of a tax imposed by chapter 
32) a readjustment for local advertising (but only to the extent 
provided in section 4216 (f) (2) and (3)),". 
SEC. 3. The amendments made by this Act shall apply with respect 
to articles sold on or after the first day of the first calendar quarter 
beginning more than twenty days after the date of the enactment of 
this Act. 
^^mnerais and 
gj,^ 4 Subsectiou (c) of sectiou 302 of the Public Debt and Tax 
Percentage de- Rate Extcusion Act of 1960 (PubHc Law 86-564; 74 Stat. 293) is 
pietion. 
amended to read as follows: 
"(c) EFFECTIVE DATE.— 
"(1) I N GENERAL.—Except as provided in paragraph (2), the 
amendments made by subsections (a) and (b) shall be applicable 
only with respect to taxable years beginning after December 31, 
1960. 
"(2) CALCIUM CARBONATES, ETC.— 
"(A) ELECTION FOR PAST YEARS.—In the case of calcium 
carbonates or other minerals when used in making cement, 
if an election is made by the taxpayer under subparagraph 
"(i) the amendments made by subsection (b) shall 
apply to taxable years with respect to which such elec-
tion is effective, and 
"(ii) provisions having the same effect as the amend-
ments made by subsection (b) shall be deemed to be 
^^ ^
*
^
*
* '^' 
included in the Internal Revenue Code of 1939 and shall 
apply to taxable years with respect to which such election 
is effective in lieu of the corresponding provisions of 
such Code. 
"(B) 
YEARS TO WHICH APPLICABLE.—An election made 
under subparagraph (C) to have the provisions of this para-
graph apply shall be effective for all taxable years begin-
ning before January 1, 1961, in respect of which— 
"(i) the assessment of a deficiency, 
"(ii) the refund or credit of an overpayment, or 
"(iii) the commencement of a suit for recovery of a 
refund under section 7405 of the Internal Revenue Code 
26 use 7405. 
of 1954, 
is not prevented on the date of the enactment of this para-
graph oy the operation of any law or rule of law. Such 
election shall also be effective for any taxable year begin-
ning before January 1, 1961, in respect of which an assess-
ment of a deficiency has been made but not collected on or 
before the date of the enactment of this paragraph. 
"(C) TIME AND MANNER OF ELECTION.—An election to have 
the provisions of this paragraph apply shall be made by 
the taxpayer on or before the 60th day after the date of 
^p^ubiication in 
pubUcatiou iu the Federal Register of final regulations is-
sued under authority of subparagraph (F), and shall be 
made in such form and manner as the Secretary of the 
Treasury or his delegate shall prescribe by regulations. Such 
election, if made, may not be revoked. 
"(D) 
STATUTES OF LIMITATION.—Notwithstanding 
any 
other law, the period within which an assessment of a defi-
ciency attributable to the application of the amendments 
made by subsection (b) may be made with respect to any 
\ 
74 S T A T . ] 
PUBLIC LAW 86-781-SEPT. 14, 1960 
1019 
taxable year to which such amendments apply under an 
election made under subparagraph (C), and the period with-
in which a claim for refund or credit of an overpayment 
attributable to the application of such amendments may be 
made with respect to any such taxable year, shall not ex-
pire prior to one year after the last day for making an elec-
tion under subparagraph (C). 
An election hy a taxpayer 
under subparagraph (C) shall be considered as a consent 
to the application of the provisions of this subparagraph. 
"(E) TEEMS ; APPLICABILITY OF OTHER LAWS.—Except where 
otherwise distinctly expressed or manifestly intended, terms 
used in this paragraph shall have the same meaning as when 
used in the Internal Revenue Code of 1954 (or corresponding 
provisions of the Internal Revenue Code of 1939) and all 
provisions of law shall apply with respect to this paragraph 
as if this paragraph were a part of such Code (or correspond-
ing provisions of the Internal Revenue Code of 1939). 
"(F) REGULATIONS.—The Secretary of the Treasury or 
his delegate shall prescribe such regulations as may be neces-
sary to carry out the provisions of this paragraph." 
SEC. 5. (a) The Iron Workers, Mid-America Pension Fund, w^hich 
was established by an indenture executed on January 30, 1957, as a 
result of an agreement between various locals affiliated with the Inter-
national Association of Bridge, Structural, and Ornamental Iron 
Workers and three employer associations, and which has been held by 
the Internal Revenue Service to constitute a qualified trust under sec-
tion 401(a) of the Internal Revenue Code of 1954, and to be exempt 
from taxation under section 501 (a), of such Code, for years ending on 
or after December 17, 1958, shall be held and considered to have been 
a qualified trust under such section 401(a), and to have been exempt 
from taxation under such section 501(a), for the period beginning on 
January 30, 1957, and ending on December 16, 1958, but only if it is 
shown to the satisfaction of the Secretary of the Treasury or his dele-
gate that the trust has not in this period been operated in a manner 
which would jeopardize the interests of its beneficiaries. * 
(b) The Pattern Makers' Pension Trust Fund of Chicago, which 
was established by an agreement and declaration executed on April 28, 
1958, between the Pattern Makers' League of North America, Chicago 
Association, and the Pattern Manufacturers' Association of Chicago 
and Vicinity, and which has been held by the Internal Revenue Service 
to constitute a qualified trust under section 401(a) of the Internal 
Revenue Code of 1954, and to be exempt from taxation under section 
501(a) of such Code, for years ending on or after February 25, 1959, 
shall be held and considered to have been a qualified trust under such 
section 401(a), and to have been exempt from taxation under such 
section 501 (a), for the period beginning on April 28, 1958, and ending 
on February 24, 1959, but only if it is shown to the satisfaction of the 
Secretary of the Treasury or his delegate that the trust has not in this 
period been operated in a manner which would jeopardize the interests 
of its beneficiaries. 
(c) The Pipe and Refrigeration Fitters Local 537 Pension Fund of 
Boston, Massachusetts, which was created on September 1, 1955, as a 
result of an agreement between Local 537 of the United Association of 
Pipe Fitters and Refrigeration Fitters and the Heating, Piping, and 
Air Conditioning Contractors, Boston Association (now known as 
Mechanical Contractors Association of Boston), and which has been 
held by the Internal Revenue Service to constitute a qualified trust 
under section 401(a) of the Internal Revenue Code of 1954, and to be 
exempt from taxation under section 601(a) of such Code, for years 
RegulEitions. 
Consideration as 
qualified; trusts. 
Iron VI o r k er s 
Mid-America Pen-
sion Fund. 
26 u s e 401. 
26 u s e 501. 
Pattern Makers' 
P e n s i o n 
T r u s t 
Fund of Chicago. 
Pipe and Refrig-
eration 
F i t t e r s 
Local 53 7 Pension 
Fund. 
1020 
PUBLIC LAW 86-781-SEPT. 14, 1960 
[74 ST A T . 
Annuity Plan of 
Electrical Switch-
board and Panel-
board Manufactur-
ing Industry. 
Painters District 
Council No. 19 Wet 
fare and Pension 
Fund. 
L o c a l 
Unicxi 
Numbered 377 Pen-
sion Fund. 
26 u s e 461. 
ending on or after November 10, 1959, shall be held and considered 
to have been a qualified trust under such section 401(a), and to have 
been exempt from taxation under such section 501(a), for the period 
beginning on March 1, 1956, and ending on November 9, 1959, but 
only if it is shown to the satisfaction of the Secretary of the Treasury 
or his delegate that the trust has not in this period been operated in 
a manner which would jeopardize the interests of its beneficiaries. 
(d) The Annuity Plan of the Electrical Switchboard and Panel-
board Manufacturing Industry of New York City, w^hich was created 
May 16, 1956, as a result of an agreement between Local Union 
Numbered 3, International Brotherhood of Electrical Workers, 
American Federation of Labor and Congress of Industrial Organi-
zations, and the Electrical Manufacturers of New York, Incorporated, 
and which has been held by the Internal Kevenue Service to con-
stitute a qualified trust under section 401(a) of the Internal Revenue 
Code of 1954, and to be exempt from taxation under section 501(a) 
of such Code, shall be held and considered to have been a qualified 
trust under such section 401(a), and to have been exempt from taxa-
tion under such section 501(a), for the period beginning May 16, 
1956, and ending May 22, 1957, but only if it is shown to the satis-
faction of the Secretary of the Treasury or his delegate that the trust 
has not in this period been operated in a manner which would jeopard-
ize the interests of its beneficiaries. 
(e) The District Council No. 19 Welfare Fund, now known as 
Painters District Council No. 19 Welfare and Pension Fund, which 
was first created as of May 1, 1947, as a result of an agreement be-
tween Painters District Council No. 19, Brotherhood of Painters, 
Decorators and Paperhangers of America, of the State of New 
.Jersey and painting contractors signatory to the union agreement, 
and which has been held by the Internal Revenue Service to con-
stitute a qualified trust under section 401(a) of the Internal Revenue 
Code of 1954, and to be exempt from taxation under section 501(a) 
of such Code, shall be held and considered to have been a qualified 
trust under such section 401(a), and to have been exempt from 
taxation under such section 501(a) and under section 165(a) of the 
Internal Revenue Code of 1939, for the period beginning January 1, 
1954, and ending August 6, 1956, but only if it is Shown to the satis-
faction of the Secretary of the Treasury or his delegate that the trust 
has not in this period been operated in a manner which would jeopard-
ize the interests of its beneficiaries. 
(f) The Local Union Numbered 377 Pension Fund, which was 
created October 13, 1952, as a result of an agreement between Local 
Union Numbered 377, Brotherhood of Painters, Decorators and Pa-
perhangers of America, of the State of New Jersey and Painting 
and Decorating Contractors of America, Hudson County Employers 
Chapter, and which has been held by the Internal Revenue Service 
to constitute a qualified trust under section 401(a) of the Internal 
Revenue Code of 1954, and to be exempt from taxation under section 
501(a) of such Code, shall be held and considered to have been a 
?
ualified trust under such section 401(a), and to have been exempt 
rom taxation under such section 501(a) and under section 165(a) 
of the Internal Revenue Code of 1939, for the period beginning 
October 13, 1952, and ending April 1, 1958, but only if it is shown 
to the satisfaction of the Secretary of the Treasury or his delegate 
that the trust has not in this period been operated in a manner which 
would jeopardize the interests of its beneficiaries. 
SEC. 6. (a) Section 461 of the Internal Revenue Code of 1954 (re-
lating to general rule for taxable year of deduction) is amended by 
adding at the end thereof the f 
oUowmg new subsection: 
74 
S T A T . ] 
PUBLIC LAW 86-783-SEPT. 14, 1960 
1021 
"(d) 
LIMITATION ON ACCELERATION OF ACCRUAL OF TAXES.— 
"(1) GENERAL RULE.—In the case of a taxpayer whose taxable 
income is computed under an accrual method of accounting, to the 
extent that the time for accruing taxes is earlier than it would 
be but for any action of any taxing jurisdiction taken after De-
cember 31, 1960, then, under regulations prescribed by the Secre-
tary or his delegate, such taxes shall be treated as accruing at the 
time they would have accrued but for such action by such taxing 
jurisdiction. 
" (2) LIMITATION.—^Under regulations prescribed by the Secre-
tary or his delegate, paragraph (1) shall be inapplicable to any 
item of tax to the extent that its application would (but for this 
paragraph) prevent all persons (including successors in interest) 
from ever taking such item into account." 
(b) The amendment made by subsection (a) shall apply to taxable 
years ending after December 31,1960. 
Approved September 14, 1960. 
Public Law 86-782 
AN ACT 
To credit periods of internment during World War II to certain Federal em-
ployees of Japanese ancestry for purposes of the Civil Service Retirement 
Act and the Annual and "Sick Leave Act of 1951. 
September 14, 1960 
[H. R. 7810] 
Be it enoucted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That the first section 
of the Act entitled "An Act to provide benefits for certain Federal em-
ployees of Japanese ancestry who lost certain rights with respect 
to ^rade, time in grade, and rate of compensation by reason of any 
policy or program of the Federal Government with respect to persons 
of Japanese ancestry during World War II", approved July 15, 1952 
(66 Stat. 634; 5 U.S.C. 1076), is amended by adding at the end of such 
section the following: "Each period of internment, and each period 
during which any such loss of opportunity for or denial of appoint-
ment, or denial of reinstatement, or separation from the service, w^as 
in effect, by reason of such policy or program, shall be held and con-
sidered to be creditable service for the purposes of the Civil Service 
Retirement Act and the Annual and Sick Leave Act of 1951." 
SEC. 2. Notwithstanding any other provision of law, any civil serv-
ice retirement benefits resulting from the amendment made by this Act 
shall be paid from the civil service retirement and disability fund. 
Approved September 14, 1960. 
Federal employ-
ees of J a p a n e se 
ancestry. 
Credit iior World 
War il internment. 
70 Stat. 743; 65 
Stat. 679,, 
5 u s e 2251 note; 
5 u s e 2061 note. 
Public Law 86-783 
AN ACT 
To amend title V of the Agricultural Act of 1949, as amended, and for other 
puri)oses. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 509 of 
the Agricultural Act of 1949, as amended, is amended by striking 
"June 30,1961" and inserting "December 31,1961." 
Approved September 14, 1960. 
September 14. 1960 
[H. R. 12759] 
72 Stat. 934. 
7 u s e 1461 note.