		I
		112th CONGRESS
		1st Session
		H. R. 25
		IN THE HOUSE OF REPRESENTATIVES

			January 5, 2011
			Mr. Woodall (for
			 himself, Mr. Price of Georgia,
			 Mr. Boren,
			 Mr. King of Iowa,
			 Mr. Akin, Mr. Bilbray, Mr.
			 Carter, Mr. Conaway,
			 Mr. Duncan of Tennessee,
			 Ms. Foxx, Mr. McCaul, Mr.
			 Olson, Mr. Thornberry,
			 Mr. Sullivan,
			 Mr. Gingrey of Georgia,
			 Mr. Bartlett,
			 Mr. Young of Alaska,
			 Mr. Crenshaw,
			 Mr. Westmoreland,
			 Mr. Bilirakis,
			 Mr. Poe of Texas,
			 Mr. Graves of Georgia,
			 Mr. Neugebauer,
			 Mr. Miller of Florida,
			 Mr. Wittman,
			 Mr. Kingston,
			 Mr. Stutzman,
			 Mr. Flake,
			 Mr. Long, Mr. Stearns, Mr.
			 Walberg, Mr. Ross of
			 Florida, Mr. Issa,
			 Mr. Brooks,
			 Mr. Nugent,
			 Mr. Scott of South Carolina,
			 Mr. Farenthold,
			 Mr. Duncan of South Carolina,
			 Mr. Bishop of Utah,
			 Mr. Pence,
			 Mrs. Adams,
			 Mr. Mica, Mrs. Myrick, Mr.
			 Burton of Indiana, Mr.
			 Culberson, Mr. Lankford,
			 Mr. Pompeo, and
			 Mr. Gary G. Miller of California)
			 introduced the following bill; which was referred to the
			 Committee on Ways and
			 Means

		A BILL
		To promote freedom, fairness, and economic opportunity by
		  repealing the income tax and other taxes, abolishing the Internal Revenue
		  Service, and enacting a national sales tax to be administered primarily by the
		  States.

		1.Short title; table of
			 contents
			(a)Short
			 TitleThis Act may be cited as the Fair Tax Act of 2011.
			(b)Table of
			 ContentsThe table of contents for this Act is as follows:

					Sec. 1. Short title; table of contents.
					Sec. 2. Congressional findings.
					Title I—Repeal of the Income Tax, Payroll Taxes, and Estate and
				Gift Taxes
					Sec. 101. Income taxes repealed.
					Sec. 102. Payroll taxes repealed.
					Sec. 103. Estate and gift taxes repealed.
					Sec. 104. Conforming amendments; effective date.
					Title II—Sales Tax Enacted
					Sec. 201. Sales tax.
					Sec. 202. Conforming and technical amendments.
					Title III—Other Matters
					Sec. 301. Phase-out of administration of repealed Federal
				taxes.
					Sec. 302. Administration of other Federal taxes.
					Sec. 303. Sales tax inclusive Social Security benefits
				indexation.
					Title IV—Sunset of Sales Tax if Sixteenth Amendment not
				Repealed
					Sec. 401. Elimination of sales tax if Sixteenth Amendment not
				repealed.

			2.Congressional
			 findings
			(a)Findings
			 Relating to Federal Income TaxCongress finds the Federal income
			 tax—
				(1)retards economic
			 growth and has reduced the standard of living of the American public;
				(2)impedes the
			 international competitiveness of United States industry;
				(3)reduces savings
			 and investment in the United States by taxing income multiple times;
				(4)slows the capital
			 formation necessary for real wages to steadily increase;
				(5)lowers
			 productivity;
				(6)imposes
			 unacceptable and unnecessary administrative and compliance costs on individual
			 and business taxpayers;
				(7)is unfair and
			 inequitable;
				(8)unnecessarily
			 intrudes upon the privacy and civil rights of United States citizens;
				(9)hides the true
			 cost of government by embedding taxes in the costs of everything Americans
			 buy;
				(10)is not being
			 complied with at satisfactory levels and therefore raises the tax burden on law
			 abiding citizens; and
				(11)impedes upward
			 social mobility.
				(b)Findings
			 Relating to Federal Payroll TaxesCongress finds further that the
			 Social Security and Medicare payroll taxes and self-employment taxes—
				(1)raise the cost of
			 employment;
				(2)destroy jobs and
			 cause unemployment; and
				(3)have a
			 disproportionately adverse impact on lower income Americans.
				(c)Findings
			 Relating to Federal Estate and Gift TaxesCongress finds further
			 that the Federal estate and gift taxes—
				(1)force family
			 businesses and farms to be sold by the family to pay such taxes;
				(2)discourage capital
			 formation and entrepreneurship;
				(3)foster the
			 continued dominance of large enterprises over small family-owned companies and
			 farms; and
				(4)impose
			 unacceptably high tax planning costs on small businesses and farms.
				(d)Findings
			 Relating to National Sales TaxCongress finds further that a
			 broad-based national sales tax on goods and services purchased for final
			 consumption—
				(1)is similar in many
			 respects to the sales and use taxes in place in 45 of the 50 States;
				(2)will promote
			 savings and investment;
				(3)will promote
			 fairness;
				(4)will promote
			 economic growth;
				(5)will raise the
			 standard of living;
				(6)will increase
			 investment;
				(7)will enhance
			 productivity and international competitiveness;
				(8)will reduce
			 administrative burdens on the American taxpayer;
				(9)will improve
			 upward social mobility; and
				(10)will respect the
			 privacy interests and civil rights of taxpayers.
				(e)Findings
			 Relating to Administration of National Sales TaxCongress further
			 finds that—
				(1)most of the
			 practical experience administering sales taxes is found at the State
			 governmental level;
				(2)it is desirable to
			 harmonize Federal and State collection and enforcement efforts to the maximum
			 extent possible;
				(3)it is sound tax
			 administration policy to foster administration and collection of the Federal
			 sales tax at the State level in return for a reasonable administration fee to
			 the States; and
				(4)businesses that
			 must collect and remit taxes should receive reasonable compensation for the
			 cost of doing so.
				(f)Findings
			 Relating to Repeal of Present Federal Tax SystemCongress further
			 finds that the 16th amendment to the United States Constitution should be
			 repealed.
			IRepeal of the
			 Income Tax, Payroll Taxes, and Estate and Gift Taxes
			101.Income taxes
			 repealedSubtitle A of the
			 Internal Revenue Code of 1986 (relating to income taxes and self-employment
			 taxes) is repealed.
			102.Payroll taxes
			 repealed
				(a)In
			 GeneralSubtitle C of the Internal Revenue Code of 1986 (relating
			 to payroll taxes and withholding of income taxes) is repealed.
				(b)Funding of
			 Social SecurityFor funding of the Social Security Trust Funds
			 from general revenue, see section 201 of the Social Security Act (42 U.S.C. 401).
				103.Estate and gift
			 taxes repealedSubtitle B of
			 the Internal Revenue Code of 1986 (relating to estate and gift taxes) is
			 repealed.
			104.Conforming
			 amendments; effective date
				(a)Conforming
			 AmendmentsThe Internal Revenue Code of 1986 is amended—
					(1)by striking
			 subtitle H (relating to financing of Presidential election campaigns),
			 and
					(2)by
			 redesignating—
						(A)subtitle D
			 (relating to miscellaneous excise taxes) as subtitle B,
						(B)subtitle E
			 (relating to alcohol, tobacco, and certain other excise taxes) as subtitle
			 C,
						(C)subtitle F
			 (relating to procedure and administration) as subtitle D,
						(D)subtitle G
			 (relating to the Joint Committee on Taxation) as subtitle E,
						(E)subtitle I
			 (relating to the Trust Fund Code) as subtitle F,
						(F)subtitle J
			 (relating to coal industry health benefits) as subtitle G, and
						(G)subtitle K
			 (relating to group health plan portability, access, and renewability
			 requirements) as subtitle H.
						(b)Redesignation of
			 1986 Code
					(1)In
			 generalThe Internal Revenue Code of 1986 enacted on October 22,
			 1986, as heretofore, hereby, or hereafter amended, may be cited as the Internal
			 Revenue Code of 2011.
					(2)References in
			 laws, etcExcept when inappropriate, any reference in any law,
			 Executive order, or other document—
						(A)to the Internal
			 Revenue Code of 1986 shall include a reference to the Internal Revenue Code of
			 2011, and
						(B)to the Internal
			 Revenue Code of 2011 shall include a reference to the provisions of law
			 formerly known as the Internal Revenue Code of 1986.
						(c)Additional
			 AmendmentsFor additional conforming amendments, see section 202
			 of this Act.
				(d)Effective
			 DateExcept as otherwise provided in this Act, the amendments
			 made by this Act shall take effect on January 1, 2013.
				IISales Tax
			 Enacted
			201.Sales
			 tax
				(a)In
			 GeneralThe Internal Revenue Code of 2011 is amended by inserting
			 before subtitle B (as redesignated by section 104(a)(2)(A)) the following new
			 subtitle:

						ASales Tax

								Sec. 1. Principles of interpretation.
								Sec. 2. Definitions.
								Chapter 1. Interpretation; definitions; imposition of tax;
				  etc.
								Chapter 2. Credits; refunds
								Chapter 3. Family consumption allowance
								Chapter 4. Federal and state cooperative tax
				  administration
								Chapter 5. Other administrative provisions
								Chapter 6. Collections; appeals; taxpayer rights
								Chapter 7. Special rules
								Chapter 8. Financial intermediation services
								Chapter 9. Additional matters

							1.Principles of
				interpretation
								(a)In
				GeneralAny court, the Secretary, and any sales tax administering
				authority shall consider the purposes of this subtitle (as set forth in
				subsection (b)) as the primary aid in statutory construction.
								(b)PurposesThe
				purposes of this subtitle are as follows:
									(1)To raise revenue
				needed by the Federal Government in a manner consistent with the other purposes
				of this subtitle.
									(2)To tax all
				consumption of goods and services in the United States once, without exception,
				but only once.
									(3)To prevent double,
				multiple, or cascading taxation.
									(4)To simplify the
				tax law and reduce the administration costs of, and the costs of compliance
				with, the tax law.
									(5)To provide for the
				administration of the tax law in a manner that respects privacy, due process,
				individual rights when interacting with the government, the presumption of
				innocence in criminal proceedings, and the presumption of lawful behavior in
				civil proceedings.
									(6)To increase the
				role of State governments in Federal tax administration because of State
				government expertise in sales tax administration.
									(7)To enhance
				generally cooperation and coordination among State tax administrators; and to
				enhance cooperation and coordination among Federal and State tax
				administrators, consistent with the principle of intergovernmental tax
				immunity.
									(c)Secondary Aids
				to Statutory ConstructionAs a secondary aid in statutory
				construction, any court, the Secretary, and any sales tax administering
				authority shall consider—
									(1)the common law
				canons of statutory construction;
									(2)the meaning and
				construction of concepts and terms used in the Internal Revenue Code of 1986 as
				in effect before the effective date of this subtitle; and
									(3)construe any
				ambiguities in this Act in favor of reserving powers to the States
				respectively, or to the people.
									2.Definitions
								(a)In
				GeneralFor purposes of this subtitle—
									(1)Affiliated
				firmsA firm is affiliated with another if 1 firm owns 50 percent
				or more of—
										(A)the voting shares
				in a corporation, or
										(B)the capital
				interests of a business firm that is not a corporation.
										(2)Conforming state
				sales taxThe term conforming State sales tax means
				a sales tax imposed by a State that adopts the same definition of taxable
				property and services as adopted by this subtitle.
									(3)Designated
				commercial private courier serviceThe term designated
				commercial private courier service means a firm designated as such by
				the Secretary or any sales tax administering authority, upon application of the
				firm, if the firm—
										(A)provides its
				services to the general public,
										(B)records
				electronically to its data base kept in the regular course of its business the
				date on which an item was given to such firm for delivery, and
										(C)has been operating
				for at least 1 year.
										(4)Education and
				trainingThe term education and training means
				tuition for primary, secondary, or postsecondary level education, and
				job-related training courses. Such term does not include room, board, sports
				activities, recreational activities, hobbies, games, arts or crafts or cultural
				activities.
									(5)Gross
				paymentsThe term gross payments means payments for
				taxable property or services, including Federal taxes imposed by this
				title.
									(6)Intangible
				property
										(A)In
				generalThe term intangible property includes
				copyrights, trademarks, patents, goodwill, financial instruments, securities,
				commercial paper, debts, notes and bonds, and other property deemed intangible
				at common law. The Secretary shall, by regulation resolve differences among the
				provisions of common law of the several States.
										(B)Certain types of
				propertySuch term does not include tangible personal property
				(or rents or leaseholds of any term thereon), real property (or rents or
				leaseholds of any term thereon) and computer software.
										(7)PersonThe
				term person means any natural person, and unless the context
				clearly does not allow it, any corporation, partnership, limited liability
				company, trust, estate, government, agency, administration, organization,
				association, or other legal entity (foreign or domestic.)
									(8)Produce,
				provide, render, or sell taxable property or services
										(A)In
				generalA taxable property or service is used to produce,
				provide, render, or sell a taxable property or service if such property or
				service is purchased by a person engaged in a trade or business for the purpose
				of employing or using such taxable property or service in the production,
				provision, rendering, or sale of other taxable property or services in the
				ordinary course of that trade or business.
										(B)Research,
				experimentation, testing, and developmentTaxable property or
				services used in a trade or business for the purpose of research,
				experimentation, testing, and development shall be treated as used to produce,
				provide, render, or sell taxable property or services.
										(C)Insurance
				paymentsTaxable property or services purchased by an insurer on
				behalf of an insured shall be treated as used to produce, provide, render, or
				sell taxable property or services if the premium for the insurance contract
				giving rise to the insurer’s obligation was subject to tax pursuant to section
				801 (relating to financial intermediation services).
										(D)Education and
				trainingEducation and training shall be treated as services used
				to produce, provide, render, or sell taxable property or services.
										(9)Registered
				sellerThe term registered seller means a person
				registered pursuant to section 502.
									(10)Sales tax
				administering authorityThe term sales tax administering
				authority means—
										(A)the State agency
				designated to collect and administer the sales tax imposed by this subtitle, in
				an administering State, or
										(B)the Secretary, in
				a State that is neither—
											(i)an
				administering State, nor
											(ii)a
				State that has elected to have its sales tax administered by an administering
				State.
											(11)SecretaryThe
				term Secretary means the Secretary of the Treasury.
									(12)Taxable
				employer
										(A)In
				generalThe term taxable employer includes—
											(i)any household
				employing domestic servants, and
											(ii)any government
				except for government enterprises (as defined in section 704).
											(B)ExceptionsThe
				term taxable employer does not include any employer which
				is—
											(i)engaged in a trade
				or business,
											(ii)a
				not-for-profit organization (as defined in section 706), or
											(iii)a government
				enterprise (as defined in section 704).
											(C)Cross
				referenceFor rules relating to collection and remittance of tax
				on wages by taxable employers, see section 103(b)(2).
										(13)Tax inclusive
				fair market valueThe term tax inclusive fair market
				value means the fair market value of taxable property or services plus
				the tax imposed by this subtitle.
									(14)Taxable
				property or service
										(A)General
				ruleThe term taxable property or service
				means—
											(i)any property
				(including leaseholds of any term or rents with respect to such property) but
				excluding—
												(I)intangible
				property, and
												(II)used property,
				and
												(ii)any service
				(including any financial intermediation services as determined by section
				801).
											(B)ServiceFor
				purposes of subparagraph (A), the term service—
											(i)shall include any
				service performed by an employee for which the employee is paid wages or a
				salary by a taxable employer, and
											(ii)shall not include
				any service performed by an employee for which the employee is paid wages or a
				salary—
												(I)by an employer in
				the regular course of the employer’s trade or business,
												(II)by an employer
				that is a not-for-profit organization (as defined in section 706),
												(III)by an employer
				that is a government enterprise (as defined in section 704), and
												(IV)by taxable
				employers to employees directly providing education and training.
												(15)United
				statesThe term United States, when used in the
				geographical sense, means each of the 50 states, the District of Columbia, and
				any commonwealth, territory, or possession of the United States.
									(16)Used
				propertyThe term used property means—
										(A)property on which
				the tax imposed by section 101 has been collected and for which no credit has
				been allowed under section 202, 203, or 205, or
										(B)property that was
				held other than for a business purpose (as defined in section 102(b)) on
				December 31, 2012.
										(17)Wages and
				salaryThe terms wage and salary mean
				all compensation paid for employment service including cash compensation,
				employee benefits, disability insurance, or wage replacement insurance
				payments, unemployment compensation insurance, workers’ compensation insurance,
				and the fair market value of any other consideration paid by an employer to an
				employee in consideration for employment services rendered.
									(b)Cross
				References
									(1)For the definition
				of business purposes, see section 102(b).
									(2)For the definition
				of insurance contract, see section 206(e).
									(3)For the definition
				of qualified family, see section 302.
									(4)For the definition
				of monthly poverty level, see section 303.
									(5)For the definition
				of large seller, see section 501(e)(3).
									(6)For the definition
				of hobby activities, see section 701.
									(7)For the definition
				of gaming sponsor, see section 701(a).
									(8)For the definition
				of a chance, see section 701(b).
									(9)For the definition
				of government enterprise, see section 704(b).
									(10)For the
				definition of mixed use property, see section 705.
									(11)For the
				definition of qualified not-for-profit organization, see section 706.
									(12)For the
				definition of financial intermediation services, see section 801.
									1Interpretation;
				definitions; imposition of tax; etc.

									Sec. 101. Imposition of sales
				  tax.
									Sec. 102. Intermediate and export
				  sales.
									Sec. 103. Rules relating to collection
				  and remittance of tax.

								101.Imposition of
				sales tax
									(a)In
				GeneralThere is hereby imposed a tax on the use or consumption
				in the United States of taxable property or services.
									(b)Rate
										(1)For
				2013In the calendar year 2013, the rate of tax is 23 percent of
				the gross payments for the taxable property or service.
										(2)For years after
				2013For years after the calendar year 2013, the rate of tax is
				the combined Federal tax rate percentage (as defined in paragraph (3)) of the
				gross payments for the taxable property or service.
										(3)Combined federal
				tax rate percentageThe combined Federal tax rate percentage is
				the sum of—
											(A)the general
				revenue rate (as defined in paragraph (4)),
											(B)the old-age,
				survivors and disability insurance rate, and
											(C)the hospital
				insurance rate.
											(4)General revenue
				rateThe general revenue rate shall be 14.91 percent.
										(c)Coordination
				With Import DutiesThe tax imposed by this section is in addition
				to any import duties imposed by chapter 4 of title 19, United States Code. The
				Secretary shall provide by regulation that, to the maximum extent practicable,
				the tax imposed by this section on imported taxable property and services is
				collected and administered in conjunction with any applicable import duties
				imposed by the United States.
									(d)Liability for
				Tax
										(1)In
				generalThe person using or consuming taxable property or
				services in the United States is liable for the tax imposed by this section,
				except as provided in paragraph (2) of this subsection.
										(2)Exception where
				tax paid to sellerA person using or consuming a taxable property
				or service in the United States is not liable for the tax imposed by this
				section if the person pays the tax to a person selling the taxable property or
				service and receives from such person a purchaser’s receipt within the meaning
				of section 509.
										102.Intermediate
				and export sales
									(a)In
				GeneralFor purposes of this subtitle—
										(1)Business and
				export purposesNo tax shall be imposed under section 101 on any
				taxable property or service purchased for a business purpose in a trade or
				business.
										(2)Investment
				purposeNo tax shall be imposed under section 101 on any taxable
				property or service purchased for an investment purpose and held exclusively
				for an investment purpose.
										(3)State government
				functionsNo tax shall be imposed under section 101 on State
				government functions that do not constitute the final consumption of property
				or services.
										(b)Business
				PurposesFor purposes of this section, the term purchased
				for a business purpose in a trade or business means purchased by a
				person engaged in a trade or business and used in that trade or
				business—
										(1)for resale,
										(2)to produce,
				provide, render, or sell taxable property or services, or
										(3)in furtherance of
				other bona fide business purposes.
										(c)Investment
				PurposesFor purposes of this section, the term purchased
				for an investment purpose means property purchased exclusively for
				purposes of appreciation or the production of income but not entailing more
				than minor personal efforts.
									103.Rules relating
				to collection and remittance of tax
									(a)Liability for
				Collection and Remittance of the TaxExcept as provided otherwise
				by this section, any tax imposed by this subtitle shall be collected and
				remitted by the seller of taxable property or services (including financial
				intermediation services).
									(b)Tax To Be
				Remitted by Purchaser in Certain Circumstances
										(1)In
				generalIn the case of taxable property or services purchased
				outside of the United States and imported into the United States for use or
				consumption in the United States, the purchaser shall remit the tax imposed by
				section 101.
										(2)Certain wages or
				salaryIn the case of wages or salary paid by a taxable employer
				which are taxable services, the employer shall remit the tax imposed by section
				101.
										(c)Conversion of
				Business or Export Property or ServicesProperty or services
				purchased for a business purpose in a trade or business or for export (sold
				untaxed pursuant to section 102(a)) that is subsequently converted to personal
				use shall be deemed purchased at the time of conversion and shall be subject to
				the tax imposed by section 101 at the fair market value of the converted
				property as of the date of conversion. The tax shall be due as if the property
				had been sold at the fair market value during the month of conversion. The
				person using or consuming the converted property is liable for and shall remit
				the tax.
									(d)Barter
				TransactionsIf gross payment for taxable property or services is
				made in other than money, then the person responsible for collecting and
				remitting the tax shall remit the tax to the sales tax administering authority
				in money as if gross payment had been made in money at the tax inclusive fair
				market value of the taxable property or services purchased.
									2CREDITS;
				REFUNDS

									Sec. 201. Credits and
				  refunds.
									Sec. 202. Business use conversion
				  credit.
									Sec. 203. Intermediate and export sales
				  credit.
									Sec. 204. Administration
				  credit.
									Sec. 205. Bad debt credit.
									Sec. 206. Insurance proceeds
				  credit.
									Sec. 207. Refunds.

								201.Credits and
				refunds
									(a)In
				GeneralEach person shall be allowed a credit with respect to the
				taxes imposed by section 101 for each month in an amount equal to the sum
				of—
										(1)such person’s
				business use conversion credit pursuant to section 202 for such month,
										(2)such person’s
				intermediate and export sales credit pursuant to section 203 for such
				month,
										(3)the administration
				credit pursuant to section 204 for such month,
										(4)the bad debt
				credit pursuant to section 205 for such month,
										(5)the insurance
				proceeds credit pursuant to section 206 for such month,
										(6)the transitional
				inventory credit pursuant to section 902, and
										(7)any amount paid in
				excess of the amount due.
										(b)Credits Not
				AdditiveOnly one credit allowed by chapter 2 may be taken with
				respect to any particular gross payment.
									202.Business use
				conversion credit
									(a)In
				GeneralFor purposes of section 201, a person’s business use
				conversion credit for any month is the aggregate of the amounts determined
				under subsection (b) with respect to taxable property and services—
										(1)on which tax was
				imposed by section 101 (and actually paid), and
										(2)which commenced to
				be 95 percent or more used during such month for business purposes (within the
				meaning of section 102(b)).
										(b)Amount of
				CreditThe amount determined under this paragraph with respect to
				any taxable property or service is the lesser of—
										(1)the product
				of—
											(A)the rate imposed
				by section 101, and
											(B)the quotient that
				is—
												(i)the fair market
				value of the property or service when its use is converted, divided by
												(ii)the quantity that
				is 1 minus the tax rate imposed by section 101, or
												(2)the amount of tax
				paid with respect to such taxable property or service, including the amount, if
				any, determined in accordance with section 705 (relating to mixed use
				property).
										203.Intermediate
				and export sales creditFor
				purposes of section 201, a person’s intermediate and export sales credit is the
				amount of sales tax paid on the purchase of any taxable property or service
				purchased for—
									(1)a business purpose
				in a trade or business (as defined in section 102(b)), or
									(2)export from the
				United States for use or consumption outside the United States.
									204.Administration
				credit
									(a)In
				GeneralEvery person filing a timely monthly report (with regard
				to extensions) in compliance with section 501 shall be entitled to a taxpayer
				administrative credit equal to the greater of—
										(1)$200, or
										(2)one-quarter of 1
				percent of the tax remitted.
										(b)LimitationThe
				credit allowed under this section shall not exceed 20 percent of the tax due to
				be remitted prior to the application of any credit or credits permitted by
				section 201.
									205.Bad debt
				credit
									(a)Financial
				Intermediation ServicesAny person who has experienced a bad debt
				(other than unpaid invoices within the meaning of subsection (b)) shall be
				entitled to a credit equal to the product of—
										(1)the rate imposed
				by section 101, and
										(2)the quotient that
				is—
											(A)the amount of the
				bad debt (as defined in section 802), divided by
											(B)the quantity that
				is 1 minus the rate imposed by section 101.
											(b)Unpaid
				InvoicesAny person electing the accrual method pursuant to
				section 503 that has with respect to a transaction—
										(1)invoiced the tax
				imposed by section 101,
										(2)remitted the
				invoiced tax,
										(3)actually delivered
				the taxable property or performed the taxable services invoiced, and
										(4)not been paid 180
				days after date the invoice was due to be paid,
										shall be
				entitled to a credit equal to the amount of tax remitted and unpaid by the
				purchaser.(c)Subsequent
				PaymentAny payment made with respect to a transaction subsequent
				to a section 205 credit being taken with respect to that transaction shall be
				subject to tax in the month the payment was received as if a tax inclusive sale
				of taxable property and services in the amount of the payment had been
				made.
									(d)Partial
				PaymentsPartial payments shall be treated as pro rata payments
				of the underlying obligation and shall be allocated proportionately—
										(1)for fully taxable
				payments, between payment for the taxable property and service and tax,
				and
										(2)for partially
				taxable payments, among payment for the taxable property and service, tax and
				other payment.
										(e)Related
				PartiesThe credit provided by this section shall not be
				available with respect to sales made to related parties. For purposes of this
				section, related party means affiliated firms and family members (as defined in
				section 302(b)).
									206.Insurance
				proceeds credit
									(a)In
				GeneralA person receiving a payment from an insurer by virtue of
				an insurance contract shall be entitled to a credit in an amount determined by
				subsection (b), less any amount paid to the insured by the insurer pursuant to
				subsection (c), if the entire premium (except that portion allocable to the
				investment account of the underlying policy) for the insurance contract giving
				rise to the insurer’s obligation to make a payment to the insured was subject
				to the tax imposed by section 101 and said tax was paid.
									(b)Credit
				AmountThe amount of the credit shall be the product of—
										(1)the rate imposed
				by section 101, and
										(2)the quotient that
				is—
											(A)the amount of the
				payment made by the insurer to the insured, divided by
											(B)the quantity that
				is 1 minus the rate imposed by section 101.
											(c)Administrative
				OptionThe credit determined in accordance with subsection (b)
				shall be paid by the insurer to the insured and the insurer shall be entitled
				to the credit in lieu of the insured, except that the insurer may elect, in a
				form prescribed by the Secretary, to not pay the credit and require the insured
				to make application for the credit. In the event of such election, the insurer
				shall provide to the Secretary and the insured the name and tax identification
				number of the insurer and of the insured and indicate the proper amount of the
				credit.
									(d)Coordination
				With Respect to ExemptionIf taxable property or services
				purchased by an insurer on behalf of an insured are purchased free of tax by
				virtue of section 2(a)(8)(C), then the credit provided by this section shall
				not be available with respect to that purchase.
									(e)Insurance
				ContractFor purposes of subsection (a), the term insurance
				contract’ shall include a life insurance contract, a health insurance contract,
				a property and casualty loss insurance contract, a general liability insurance
				contract, a marine insurance contract, a fire insurance contract, an accident
				insurance contract, a disability insurance contract, a long-term care insurance
				contract, and an insurance contract that provides a combination of these types
				of insurance.
									207.Refunds
									(a)Registered
				SellersIf a registered seller files a monthly tax report with an
				overpayment, then, upon application by the registered seller in a form
				prescribed by the sales tax administering authority, the overpayment shown on
				the report shall be refunded to the registered seller within 60 days of receipt
				of said application. In the absence of such application, the overpayment may be
				carried forward, without interest, by the person entitled to the credit.
									(b)Other
				PersonsIf a person other than a registered seller has an
				overpayment for any month, then, upon application by the person in a form
				prescribed by the sales tax administering authority, the credit balance due
				shall be refunded to the person within 60 days of receipt of said
				application.
									(c)InterestNo
				interest shall be paid on any balance due from the sales tax administering
				authority under this subsection for any month if such balance due is paid
				within 60 days after the application for refund is received. Balances due not
				paid within 60 days after the application for refund is received shall bear
				interest from the date of application. Interest shall be paid at the Federal
				short-term rate (as defined in section 511).
									(d)Suspension of
				Period To Pay Refund Only if Federal or State Court RulingThe
				60-day periods under subsections (a) and (b) shall be suspended with respect to
				a purported overpayment (or portion thereof) only during any period that there
				is in effect a preliminary, temporary, or final ruling from a Federal or State
				court that there is reasonable cause to believe that such overpayment may not
				actually be due.
									3Family consumption
				allowance

									Sec. 301. Family consumption
				  allowance.
									Sec. 302. Qualified family.
									Sec. 303. Monthly poverty
				  level.
									Sec. 304. Rebate mechanism.
									Sec. 305. Change in family
				  circumstances.

								301.Family
				consumption allowanceEach
				qualified family shall be eligible to receive a sales tax rebate each month.
				The sales tax rebate shall be in an amount equal to the product of—
									(1)the rate of tax
				imposed by section 101, and
									(2)the monthly
				poverty level.
									302.Qualified
				family
									(a)General
				RuleFor purposes of this chapter, the term qualified
				family shall mean 1 or more family members sharing a common residence.
				All family members sharing a common residence shall be considered as part of 1
				qualified family.
									(b)Family Size
				Determination
										(1)In
				generalTo determine the size of a qualified family for purposes
				of this chapter, family members shall mean—
											(A)an
				individual,
											(B)the individual’s
				spouse,
											(C)all lineal
				ancestors and descendants of said individual (and such individual’s
				spouse),
											(D)all legally
				adopted children of such individual (and such individual’s spouse), and
											(E)all children under
				legal guardianship of such individual (or such individual’s spouse).
											(2)Identification
				requirementsIn order for a person to be counted as a member of
				the family for purposes of determining the size of the qualified family, such
				person must—
											(A)have a bona fide
				Social Security number; and
											(B)be a lawful
				resident of the United States.
											(c)Children Living
				Away From Home
										(1)Students living
				away from homeAny person who was a registered student during not
				fewer than 5 months in a calendar year while living away from the common
				residence of a qualified family but who receives over 50 percent of such
				person’s support during a calendar year from members of the qualified family
				shall be included as part of the family unit whose members provided said
				support for purposes of this chapter.
										(2)Children of
				divorced or separated parentsIf a child’s parents are divorced
				or legally separated, a child for purposes of this chapter shall be treated as
				part of the qualified family of the custodial parent. In cases of joint
				custody, the custodial parent for purposes of this chapter shall be the parent
				that has custody of the child for more than one-half of the time during a given
				calendar year. A parent entitled to be treated as the custodial parent pursuant
				to this paragraph may release this claim to the other parent if said release is
				in writing.
										(d)Annual
				RegistrationIn order to receive the family consumption allowance
				provided by section 301, a qualified family must register with the sales tax
				administering authority in a form prescribed by the Secretary. The annual
				registration form shall provide—
										(1)the name of each
				family member who shared the qualified family’s residence on the family
				determination date,
										(2)the Social
				Security number of each family member on the family determination date who
				shared the qualified family’s residence on the family determination
				date,
										(3)the family member
				or family members to whom the family consumption allowance should be
				paid,
										(4)a certification
				that all listed family members are lawful residents of the United
				States,
										(5)a certification
				that all family members sharing the common residence are listed,
										(6)a certification
				that no family members were incarcerated on the family determination date
				(within the meaning of subsection (l)), and
										(7)the address of the
				qualified family.
										Said
				registration shall be signed by all members of the qualified family that have
				attained the age of 21 years as of the date of filing.(e)Registration Not
				MandatoryRegistration is not mandatory for any qualified
				family.
									(f)Effect of
				Failure To Provide Annual RegistrationAny qualified family that
				fails to register in accordance with this section within 30 days of the family
				determination date, shall cease receiving the monthly family consumption
				allowance in the month beginning 90 days after the family determination
				date.
									(g)Effect of Curing
				Failure To Provide Annual RegistrationAny qualified family that
				failed to timely make its annual registration in accordance with this section
				but subsequently cures its failure to register, shall be entitled to up to 6
				months of lapsed sales tax rebate payments. No interest on lapsed payment
				amount shall be paid.
									(h)Effective Date
				of Annual RegistrationsAnnual registrations shall take effect
				for the month beginning 90 days after the family registration date.
									(i)Effective Date
				of Revised RegistrationsA revised registration made pursuant to
				section 305 shall take effect for the first month beginning 60 days after the
				revised registration was filed. The existing registration shall remain in
				effect until the effective date of the revised registration.
									(j)Determination of
				Registration Filing DateAn annual or revised registration shall
				be deemed filed when—
										(1)deposited in the
				United States mail, postage prepaid, to the address of the sales tax
				administering authority;
										(2)delivered and
				accepted at the offices of the sales tax administering authority; or
										(3)provided to a
				designated commercial private courier service for delivery within 2 days to the
				sales tax administering authority at the address of the sales tax administering
				authority.
										(k)Proposed
				Registration To Be ProvidedThirty or more days before the family
				registration date, the sales tax administering authority shall mail to the
				address shown on the most recent rebate registration or change of address
				notice filed pursuant to section 305(d) a proposed registration that may be
				simply signed by the appropriate family members if family circumstances have
				not changed.
									(l)Incarcerated
				IndividualsAn individual shall not be eligible under this
				chapter to be included as a member of any qualified family if that
				individual—
										(1)is incarcerated in
				a local, State, or Federal jail, prison, mental hospital, or other institution
				on the family determination date, and
										(2)is scheduled to be
				incarcerated for 6 months or more in the 12-month period following the
				effective date of the annual registration or the revised registration of said
				qualified family.
										(m)Family
				Determination DateThe family determination date is a date
				assigned to each family by the Secretary for purposes of determining qualified
				family size and other information necessary for the administration of this
				chapter. The Secretary shall promulgate regulations regarding the issuance of
				family determination dates. In the absence of any regulations, the family
				determination date for all families shall be October 1. The Secretary may
				assign family determination dates for administrative convenience. Permissible
				means of assigning family determination dates include a method based on the
				birthdates of family members.
									(n)Cross
				ReferenceFor penalty for filing false rebate claim, see section
				504(i).
									303.Monthly poverty
				level
									(a)In
				GeneralThe monthly poverty level for any particular month shall
				be one-twelfth of the annual poverty level. For purposes of this
				section the annual poverty level shall be the sum of—
										(1)the annual level
				determined by the Department of Health and Human Services poverty guidelines
				required by sections 652 and 673(2) of the Omnibus Reconciliation Act of 1981
				for a particular family size, and
										(2)in case of
				families that include a married couple, the annual marriage penalty
				elimination amount.
										(b)Annual Marriage
				Penalty Elimination AmountThe annual marriage penalty
				elimination amount shall be the amount that is—
										(1)the amount that is
				two times the annual level determined by the Department of Health and Human
				Services poverty guidelines required by sections 652 and 673(2) of the Omnibus
				Reconciliation Act of 1981 for a family of one, less
										(2)the annual level
				determined by the Department of Health and Human Services poverty guidelines
				required by sections 652 and 673(2) of the Omnibus Reconciliation Act of 1981
				for a family of two.
										304.Rebate
				mechanism
									(a)General
				RuleThe Social Security Administration shall provide a monthly
				sales tax rebate to duly registered qualified families in an amount determined
				in accordance with section 301.
									(b)Persons
				Receiving RebateThe payments shall be made to the persons
				designated by the qualifying family in the annual or revised registration for
				each qualified family in effect with respect to the month for which payment is
				being made. Payments may only be made to persons 18 years or older. If more
				than 1 person is designated in a registration to receive the rebate, then the
				rebate payment shall be divided evenly between or among those persons
				designated.
									(c)When Rebates
				MailedRebates shall be mailed on or before the first business
				day of the month for which the rebate is being provided.
									(d)Smartcards and
				Direct Electronic Deposit PermissibleThe Social Security
				Administration may provide rebates in the form of smartcards that carry cash
				balances in their memory for use in making purchases at retail establishments
				or by direct electronic deposit.
									305.Change in
				family circumstances
									(a)General
				RuleIn the absence of the filing of a revised registration in
				accordance with this chapter, the common residence of the qualified family,
				marital status and number of persons in a qualified family on the family
				registration date shall govern determinations required to be made under this
				chapter for purposes of the following calendar year.
									(b)No Double
				CountingIn no event shall any person be considered part of more
				than 1 qualified family.
									(c)Revised
				Registration PermissibleA qualified family may file a revised
				registration for purposes of section 302(d) to reflect a change in family
				circumstances. A revised registration form shall provide—
										(1)the name of each
				family member who shared the qualified family’s residence on the filing date of
				the revised registration,
										(2)the Social
				Security number of each family member who shared the qualified family’s
				residence on the filing date of the revised registration,
										(3)the family member
				or family members to whom the family consumption allowance should be
				paid,
										(4)a certification
				that all listed family members are lawful residents of the United
				States,
										(5)a certification
				that all family members sharing the commoner residence are listed,
										(6)a certification
				that no family members were incarcerated on the family determination date
				(within the meaning of section 302(1)), and
										(7)the address of the
				qualified family.
										Said
				revised registration shall be signed by all members of the qualified family
				that have attained the age of 21 years as of the filing date of the revised
				registration.(d)Change of
				AddressA change of address for a qualified family may be filed
				with the sales tax administering authority at any time and shall not constitute
				a revised registration.
									(e)Revised
				Registration Not MandatoryRevised registrations reflecting
				changes in family status are not mandatory.
									4Federal and State
				cooperative tax administration

									Sec. 401. Authority for States to
				  collect tax.
									Sec. 402. Federal administrative support
				  for States.
									Sec. 403. Federal-State tax
				  conferences.
									Sec. 404. Federal administration in
				  certain States.
									Sec. 405. Interstate allocation and
				  destination determination.
									Sec. 406. General administrative
				  matters.
									Sec. 407. Jurisdiction.

								401Authority for
				States to collect tax
									(a)In
				GeneralThe tax imposed by section 101 on gross payments for the
				use or consumption of taxable property or services within a State shall be
				administered, collected, and remitted to the United States Treasury by such
				State if the State is an administering State.
									(b)Administering
				StateFor purposes of this section, the term administering
				State means any State—
										(1)which maintains a
				sales tax, and
										(2)which enters into
				a cooperative agreement with the Secretary containing reasonable provisions
				governing the administration by such State of the taxes imposed by the subtitle
				and the remittance to the United States in a timely manner of taxes collected
				under this chapter.
										(c)Cooperative
				AgreementsThe agreement under subsection (b)(2) shall include
				provisions for the expeditious transfer of funds, contact officers, dispute
				resolution, information exchange, confidentiality, taxpayer rights, and other
				matters of importance. The agreement shall not contain extraneous
				matters.
									(d)Timely
				Remittance of Tax
										(1)In
				generalAdministering States shall remit and pay over taxes
				collected under this subtitle on behalf of the United States (less the
				administration fee allowable under paragraph (2)) not later than 5 days after
				receipt. Interest at 150 percent of the Federal short-term rate shall be paid
				with respect to amounts remitted after the due date.
										(2)Administration
				feeAn administering State may retain an administration fee equal
				to one-quarter of 1 percent of the amounts otherwise required to be remitted to
				the United States under this chapter by the administering State.
										(e)Limitation on
				Administration of Tax by United StatesThe Secretary may
				administer the tax imposed by this subtitle in an administering State only
				if—
										(1)(A)such State has failed on
				a regular basis to timely remit to the United States taxes collected under this
				chapter on behalf of the United States; or
											(B)such State has on a regular basis
				otherwise materially breached the agreement referred to in subsection
				(b)(2);
											(2)the State has
				failed to cure such alleged failures and breaches within a reasonable
				time;
										(3)the Secretary
				provides such State with written notice of such alleged failures and breaches;
				and
										(4)a District Court
				of the United States within such State, upon application of the Secretary, has
				rendered a decision—
											(A)making findings of
				fact that—
												(i)such State has
				failed on a regular basis to timely remit to the United States taxes collected
				under this chapter on behalf of the United States, or such State has on a
				regular basis otherwise materially breached the agreement referred to in
				subsection (b)(2);
												(ii)the Secretary has
				provided such State with written notice of such alleged failures and breaches;
				and
												(iii)the State has
				failed to cure such alleged failures and breaches within a reasonable time;
				and
												(B)making a
				determination that it is in the best interest of the citizens of the United
				States that the administering State’s authority to administer the tax imposed
				by this subtitle be revoked and said tax be administered directly by the
				Secretary.
											The order
				of the District Court revoking the authority of an Administering State shall
				contain provisions governing the orderly transfer of authority to the
				Secretary.(f)ReinstitutionA
				State that has had its authority revoked pursuant to subsection (e) shall not
				be an administering State for a period of not less than 5 years after the date
				of the order of revocation. For the first calendar year commencing 8 years
				after the date of the order of revocation, the State shall be regarded without
				prejudice as eligible to become an administering State.
									(g)Third State
				Administration PermissibleIt shall be permissible for a State to
				contract with an administering State to administer the State’s sales tax for an
				agreed fee. In this case, the agreement contemplated by subsection (c) shall
				have both the State and the Federal Government as parties.
									(h)Investigations
				and AuditsAdministering States shall not conduct investigations
				or audits at facilities in other administering States in connection with the
				tax imposed by section 101 or conforming State sales tax but shall instead
				cooperate with other administering States using the mechanisms established by
				section 402, by compact or by other agreement.
									402.Federal
				administrative support for States
									(a)In
				GeneralThe Secretary shall administer a program to facilitate
				information sharing among States.
									(b)State
				CompactsThe Secretary shall facilitate, and may be a party to a
				compact among States for purposes of facilitating the taxation of interstate
				purchases and for other purposes that may facilitate implementation of this
				subtitle.
									(c)Agreement With
				Conforming StatesThe Secretary is authorized to enter into and
				shall enter into an agreement among conforming States enabling conforming
				States to collect conforming State sales tax on sales made by sellers without a
				particular conforming State to a destination within that particular conforming
				State.
									(d)Secretary’s
				AuthorityThe Secretary shall have the authority to promulgate
				regulations, to provide guidelines, to assist States in administering the
				national sales tax, to provide for uniformity in the administration of the tax
				and to provide guidance to the public.
									403.Federal-State
				tax conferencesNot less than
				once annually, the Secretary shall host a conference with the sales tax
				administrators from the various administering States to evaluate the state of
				the national sales tax system, to address issues of mutual concern and to
				develop and consider legislative, regulatory, and administrative proposals to
				improve the tax system.
								404.Federal
				administration in certain StatesThe Secretary shall administer the tax
				imposed by this subtitle in any State or other United States jurisdiction
				that—
									(1)is not an
				administering State, or
									(2)elected to have
				another State administer its tax in accordance with section 401(g).
									405.Interstate
				allocation and destination determination
									(a)Destination
				GenerallyThe tax imposed by this subtitle is a destination
				principle tax. This section shall govern for purposes of determining—
										(1)whether the
				destination of taxable property and services is within or without the United
				States, and
										(2)which State or
				territory within the United States is the destination of taxable property and
				services.
										(b)Tangible
				Personal PropertyExcept as provided in subsection (g) (relating
				to certain leases), the destination of tangible personal property shall be the
				State or territory in which the property was first delivered to the purchaser
				(including agents and authorized representatives).
									(c)Real
				PropertyThe destination of real property, or rents or leaseholds
				on real property, shall be the State or territory in which the real property is
				located.
									(d)Other
				PropertyThe destination of any other taxable property shall be
				the residence of the purchaser.
									(e)Services
										(1)General
				ruleThe destination of services shall be the State or territory
				in which the use or consumption of the services occurred. Allocation of service
				invoices relating to more than 1 jurisdiction shall be on the basis of time or
				another method determined by regulation.
										(2)Telecommunications
				servicesThe destination of telecommunications services shall be
				the residence of the purchaser. Telecommunications services include telephone,
				telegraph, beeper, radio, cable television, satellite, and computer on-line or
				network services.
										(3)Domestic
				transportation servicesFor transportation services where all of
				the final destinations are within the United States, the destination of
				transportation services shall be the final destination of the trip (in the case
				of round or multiple trip fares, the services amount shall be equally allocated
				among each final destination).
										(4)International
				transportation servicesFor transportation services where the
				final destination or origin of the trip is without the United States, the
				service amount shall be deemed 50 percent attributable to the United States
				destination or origin.
										(5)Electrical
				serviceThe destination of electrical services shall be the
				residence of the purchaser.
										(f)Financial
				Intermediation ServicesThe destination of financial
				intermediation services shall be the residence of the purchaser.
									(g)Rents Paid for
				the Lease of Tangible Property
										(1)General
				ruleExcept as provided in paragraph (2), the destination of
				rents paid for the lease of tangible property and leaseholds on such property
				shall be where the property is located while in use.
										(2)Land vehicles;
				aircraft, water craftThe destination of rental and lease
				payments on land vehicles, aircraft and water craft shall be—
											(A)in the case of
				rentals and leases of a term of 1 month or less, the location where the land
				vehicle, aircraft, or water craft was originally delivered to the renter or
				lessee; and
											(B)in the case of
				rentals and leases of a term greater than 1 month, the residence of the renter
				or lessee.
											(h)Allocation
				RulesFor purposes of allocating revenue—
										(1)between or among
				administering States from taxes imposed by this subtitle or from State sales
				taxes administered by third-party administering States, or
										(2)between or among
				States imposing conforming State sales taxes,
										the
				revenue shall be allocated to those States that are the destination of the
				taxable property or service.(i)Federal Office
				of Revenue AllocationThe Secretary shall establish an Office of
				Revenue Allocation to arbitrate any claims or disputes among administering
				States as to the destination of taxable property and services for purposes of
				allocating revenue between or among the States from taxes imposed by this
				subtitle. The determination of the Administrator of the Office of Revenue
				Allocation shall be subject to judicial review in any Federal court with
				competent jurisdiction. The standard of review shall be abuse of
				discretion.
									406.General
				administrative matters
									(a)In
				GeneralThe Secretary and each sales tax administering authority
				may employ such persons as may be necessary for the administration of this
				subtitle and may delegate to employees the authority to conduct interviews,
				hearings, prescribe rules, promulgate regulations, and perform such other
				duties as are required by this subtitle.
									(b)Resolution of
				Any Inconsistent Rules and RegulationsIn the event that the
				Secretary and any sales tax administering authority have issued inconsistent
				rules or regulations, any lawful rule or regulation issued by the Secretary
				shall govern.
									(c)Adequate Notice
				To Be ProvidedExcept in the case of an emergency declared by the
				Secretary (and not his designee), no rule or regulation issued by the Secretary
				with respect to any internal revenue law shall take effect before 90 days have
				elapsed after its publication in the Federal Register. Upon issuance, the
				Secretary shall provide copies of all rules or regulations issued under this
				title to each sales tax administering authority.
									(d)No Rules,
				Rulings, or Regulations With Retroactive EffectNo rule, ruling,
				or regulation issued or promulgated by the Secretary relating to any internal
				revenue law or by a sales tax administering authority shall apply to a period
				prior to its publication in the Federal Register (or State equivalent) except
				that a regulation may take retroactive effect to prevent abuse.
									(e)Review of Impact
				of Regulations, Rules, and Rulings on Small Business
										(1)Submission to
				small business administrationAfter publication of any proposed
				or temporary regulation by the Secretary relating to internal revenue laws, the
				Secretary shall submit such regulation to the Chief Counsel for Advocacy of the
				Small Business Administration for comment on the impact of such regulation on
				small businesses. Not later than the date 30 days after the date of such
				submission, the Chief Counsel for Advocacy of the Small Business Administration
				shall submit comments on such regulation to the Secretary.
										(2)Consideration of
				commentsIn prescribing any final regulation which supersedes a
				proposed or temporary regulation which had been submitted under this subsection
				to the Chief Counsel for Advocacy of the Small Business Administration, the
				Secretary shall—
											(A)consider the
				comments of the Chief Counsel for Advocacy of the Small Business Administration
				on such proposed or temporary regulation, and
											(B)in promulgating
				such final regulation, include a narrative that describes the response to such
				comments.
											(3)Submission of
				certain final regulationIn the case of promulgation by the
				Secretary of any final regulations (other than a temporary regulation) which do
				not supersede a proposed regulation, the requirements of paragraphs (1) and (2)
				shall apply, except that the submission under paragraph (1) shall be made at
				least 30 days before the date of such promulgation, and the consideration and
				discussion required under paragraph (2) shall be made in connection with the
				promulgation of such final regulation.
										(f)Small Business
				Regulatory SafeguardsThe Small Business Regulatory Enforcement
				Fairness Act (Public Law 104–121; 110 Stat. 857 (SBREFA)) and
				the Regulatory Flexibility Act (5 U.S.C. 601–612 (RFA)) shall
				apply to regulations promulgated under this subtitle.
									407.Jurisdiction
									(a)State
				JurisdictionA sales tax administering authority shall have
				jurisdiction over any gross payments made which have a destination (as
				determined in accordance with section 405) within the State of said sales tax
				administering authority. This grant of jurisdiction is not exclusive of any
				other jurisdiction that such sales tax administering authority may have.
									(b)Federal
				JurisdictionThe grant of jurisdiction in subsection (a) shall
				not be in derogation of Federal jurisdiction over the same matter. The Federal
				Government shall have the right to exercise preemptive jurisdiction over
				matters relating to the taxes imposed by this subtitle.
									5OTHER
				ADMINISTRATIVE PROVISIONS

									Sec. 501. Monthly reports and
				  payments.
									Sec. 502. Registration.
									Sec. 503. Accounting.
									Sec. 504. Penalties.
									Sec. 505. Burden of persuasion and
				  burden of production.
									Sec. 506. Attorneys’ and accountancy
				  fees.
									Sec. 507. Summons, examinations, audits,
				  etc.
									Sec. 508. Records.
									Sec. 509. Tax to be separately stated
				  and charged.
									Sec. 510. Coordination with title
				  11.
									Sec. 511. Applicable interest
				  rate.

								501.Monthly reports
				and payments
									(a)Tax Reports and
				Filing Dates
										(1)In
				generalOn or before the 15th day of each month, each person who
				is—
											(A)liable to collect
				and remit the tax imposed by this subtitle by reason of section 103(a),
				or
											(B)liable to pay tax
				imposed by this subtitle which is not collected pursuant to section
				103(a),
											shall
				submit to the appropriate sales tax administering authority (in a form
				prescribed by the Secretary) a report relating to the previous calendar
				month.(2)Contents of
				reportThe report required under paragraph (1) shall set
				forth—
											(A)the gross payments
				referred to in section 101,
											(B)the tax collected
				under chapter 4 in connection with such payments,
											(C)the amount and
				type of any credit claimed, and
											(D)other information
				reasonably required by the Secretary or the sales tax administering authority
				for the administration, collection, and remittance of the tax imposed by this
				subtitle.
											(b)Tax Payments
				Date
										(1)General
				ruleThe tax imposed by this subtitle during any calendar month
				is due and shall be paid to the appropriate sales tax administering authority
				on or before the 15th day of the succeeding month. Both Federal tax imposed by
				this subtitle and confirming State sales tax (if any) shall be paid in 1
				aggregate payment.
										(2)Cross
				referenceSee subsection (e) relating to remitting of separate
				segregated funds for sellers that are not small sellers.
										(c)Extensions for
				Filing Reports
										(1)Automatic
				extensions for not more than 30 daysOn application, an extension
				of not more than 30 days to file reports under subsection (a) shall be
				automatically granted.
										(2)Other
				extensionsOn application, extensions of 30 to 60 days to file
				such reports shall be liberally granted by the sales tax administering
				authority for reasonable cause. Extensions greater than 60 days may be granted
				by the sales tax administering authority to avoid hardship.
										(3)No extension for
				payment of taxesNotwithstanding paragraphs (1) and (2), no
				extension shall be granted with respect to the time for paying or remitting the
				taxes under this subtitle.
										(d)Telephone
				Reporting of ViolationsThe Secretary shall establish a system
				under which a violation of this subtitle can be brought to the attention of the
				sales tax administering authority for investigation through the use of a
				toll-free telephone number and otherwise.
									(e)Separate
				Segregated Accounts
										(1)In
				generalAny registered seller that is not a small seller shall
				deposit all sales taxes collected pursuant to section 103 in a particular week
				in a separate segregated account maintained at a bank or other financial
				institution within 3 business days of the end of such week. Said registered
				seller shall also maintain in that account sufficient funds to meet the bank or
				financial institution minimum balance requirements, if any, and to pay account
				fees and costs.
										(2)Small
				sellerFor purposes of this subsection, a small seller is any
				person that has not collected $20,000 or more of the taxes imposed by this
				subtitle in any of the previous 12 months.
										(3)Large
				sellersAny seller that has collected $100,000 or more of the
				taxes imposed by this subtitle in any of the previous 12 months is a large
				seller. A large seller shall remit to the sales tax administering authority the
				entire balance of deposited taxes in its separate segregated account on the
				first business day following the end of the calendar week. The Secretary may by
				regulation require the electronic transfer of funds due from large
				sellers.
										(4)WeekFor
				purposes of this subsection, the term week shall mean the 7-day
				period ending on a Friday.
										(f)Determination of
				Report Filing DateA report filed pursuant to subsection (a)
				shall be deemed filed when—
										(1)deposited in the
				United States mail, postage prepaid, addressed to the sales tax administering
				authority,
										(2)delivered and
				accepted at the offices of the sales tax administering authority,
										(3)provided to a
				designated commercial private courier service for delivery within 2 days to the
				sales tax administering authority at the address of the sales tax administering
				authority, or
										(4)by other means
				permitted by the Secretary.
										(g)Security
				RequirementsA large seller (within the meaning of subsection
				(e)(3)) shall be required to provide security in an amount equal to the greater
				of $100,000 or one and one-half times the seller’s average monthly tax
				liability during the previous 6 calendar months. Security may be a cash bond, a
				bond from a surety company approved by the Secretary, a certificate of deposit,
				or a State or United States Treasury bond. A bond qualifying under this
				subsection must be a continuing instrument for each calendar year (or portion
				thereof) that the bond is in effect. The bond must remain in effect until the
				surety or sureties are released and discharged. Failure to provide security in
				accordance with this section shall result in revocation of the seller’s section
				502 registration. If a person who has provided security pursuant to this
				subsection—
										(1)fails to pay an
				amount indicated in a final notice of amount due under this subtitle (within
				the meaning of section 605(d)),
										(2)no Taxpayer
				Assistance Order is in effect relating to the amount due,
										(3)either the time
				for filing an appeal pursuant to section 604 has passed or the appeal was
				denied, and
										(4)the amount due is
				not being litigated in any judicial forum,
										then the
				security or part of the security, as the case may be, may be forfeited in favor
				of the Secretary to the extent of such tax due (plus interest if any).(h)Rewards
				ProgramThe Secretary is authorized to maintain a program of
				awards wherein individuals that assist the Secretary or sales tax administering
				authorities in discovering or prosecuting tax fraud may be remunerated.
									(i)Cross
				ReferenceFor interest due on taxes remitted late, see section
				6601.
									502.Registration
									(a)In
				GeneralAny person liable to collect and remit taxes pursuant to
				section 103(a) who is engaged in a trade or business shall register as a seller
				with the sales tax administering authority administering the taxes imposed by
				this subtitle.
									(b)Affiliated
				FirmsAffiliated firms shall be treated as 1 person for purposes
				of this section. Affiliated firms may elect, upon giving notice to the
				Secretary in a form prescribed by the Secretary, to treat separate firms as
				separate persons for purposes of this subtitle.
									(c)Designation of
				Tax Matters PersonEvery person registered pursuant to subsection
				(a) shall designate a tax matters person who shall be an individual whom the
				sales tax administering authority may contact regarding tax matters. Each
				person registered must provide notice of a change in the identity of the tax
				matters person within 30 days of said change.
									(d)Effect of
				Failure To RegisterAny person that is required to register and
				who fails to do so is prohibited from selling taxable property or services. The
				Secretary or a sales tax administering authority may bring an action seeking a
				temporary restraining order, an injunction, or such other order as may be
				appropriate to enforce this section.
									503.Accounting
									(a)Cash Method To
				Be Used GenerallyRegistered sellers and other persons shall
				report transactions using the cash method of accounting unless an election to
				use the accrual method of accounting is made pursuant to subsection (b).
									(b)Election To Use
				Accrual MethodA person may elect with respect to a calender year
				to remit taxes and report transactions with respect to the month where a sale
				was invoiced and accrued.
									(c)Cross
				ReferenceSee section 205 for rules relating to bad debts for
				sellers electing the accrual method.
									504.Penalties
									(a)Failure To
				RegisterEach person who is required to register pursuant to
				section 502 but fails to do so prior to notification by the sales tax
				administering authority shall be liable for a penalty of $500.
									(b)Reckless or
				Willful Failure To Collect Tax
										(1)Civil penalty;
				fraudEach person who is required to and recklessly or willfully
				fails to collect taxes imposed by this subtitle shall be liable for a penalty
				equal to the greater of $500 or 20 percent of tax not collected.
										(2)Criminal
				penaltyEach person who is required to and willfully fails as
				part of a trade or business to collect taxes imposed by this subtitle may be
				fined an amount up to the amount determined in accordance with paragraph (1) or
				imprisoned for a period of not more than 1 year or both.
										(c)Reckless or
				Willful Assertion of Invalid Exemption
										(1)Civil penalty;
				fraudEach person who recklessly or willfully asserts an invalid
				intermediate or export sales exemption from the taxes imposed by this subtitle
				shall be liable for a penalty equal to the greater of $500 or 20 percent of the
				tax not collected or remitted.
										(2)Criminal
				penaltyEach person who willfully asserts an invalid intermediate
				or export sales exemption from the taxes imposed by this subtitle may be fined
				an amount up to the amount determined in accordance with paragraph (1) or
				imprisoned for a period of not more than 1 year or both.
										(d)Reckless or
				Willful Failure To Remit Tax Collected
										(1)Civil penalty;
				fraudEach person who is required to and recklessly or willfully
				fails to remit taxes imposed by this subtitle and collected from purchasers
				shall be liable for a penalty equal to the greater of $1,000 or 50 percent of
				the tax not remitted.
										(2)Criminal
				penaltyEach person who willfully fails to remit taxes imposed by
				this subtitle and collected from purchasers may be fined an amount up to the
				amount determined in accordance with paragraph (1) or imprisoned for a period
				of not more than 2 years or both.
										(e)Reckless or
				Willful Failure To Pay TaxEach person who is required to and
				recklessly or willfully fails to pay taxes imposed by this subtitle shall be
				liable for a penalty equal to the greater of $500 or 20 percent of the tax not
				paid.
									(f)Penalty for Late
				Filing
										(1)In
				generalIn the case of a failure by any person who is required to
				and fails to file a report required by section 501 on or before the due date
				(determined with regard to any extension) for such report, such person shall
				pay a penalty for each month or fraction thereof that said report is late equal
				to the greater of—
											(A)$50, or
											(B)0.5 percent of the
				gross payments required to be shown on the report.
											(2)Increased
				penalty on returns filed after written inquiryThe amount of the
				penalty under paragraph (1) shall be doubled with respect to any report filed
				after a written inquiry with respect to such report is received by the taxpayer
				from the sales tax administering authority.
										(3)LimitationThe
				penalty imposed under this subsection shall not exceed 12 percent.
										(4)Exceptions
											(A)Reasonable
				causeNo penalty shall be imposed under this subsection with
				respect to any failure if it is shown that such failure is due to reasonable
				cause.
											(B)Other waiver
				authorityIn addition to penalties not imposed by reason of
				subparagraph (A), the sales tax administering authority, on application, shall
				waive the penalty imposed by paragraph (1) once per registered person per
				24-month period. The preceding sentence shall not apply to a penalty determined
				under paragraph (2).
											(g)Penalty for
				Willfully or Recklessly Accepting a False Intermediate or Export Sales
				CertificateA person who willingly or recklessly accepts a false
				intermediate or export sales certificate shall pay a penalty equal to 20
				percent of the tax not collected by reason of said acceptance.
									(h)Penalty for Late
				Remittance of Taxes
										(1)In
				generalA person who is required to timely remit taxes imposed by
				this subtitle and remits taxes more than 1 month after such taxes are due shall
				pay a penalty equal to 1 percent per month (or fraction thereof) from the due
				date.
										(2)LimitationThe
				penalty imposed under this subsection shall not exceed 24 percent.
										(3)Exceptions for
				reasonable causeNo penalty shall be imposed under paragraph (1)
				with respect to any late remittance if it is shown that such late remittance is
				due to reasonable cause.
										(i)Penalty for
				Filing False Rebate Claim
										(1)Civil penalty;
				fraudA person who willingly or recklessly files a false claim
				for a family consumption allowance rebate (within the meaning of chapter 3)
				shall—
											(A)pay a penalty
				equal to the greater of $500 or 50 percent of the claimed annual rebate amount
				not actually due, and
											(B)repay any rebates
				received as a result of the false rebate claim (together with interest).
											(2)Criminal
				penaltyA person who willingly files a false claim for a family
				consumption allowance rebate (within the meaning of chapter 3) may be fined an
				amount up to the amount determined in accordance with paragraph (1) or
				imprisoned for a period not more than 1 year or both.
										(j)Penalty for Bad
				CheckIf any check or money order in payment of any amount
				receivable under this subtitle is not duly paid, in addition to other penalties
				provided by law, the person who tendered such check shall pay a penalty equal
				to the greater of—
										(1)$25, or
										(2)two percent of the
				amount of such check.
										(k)Penalty for
				Failure To Maintain a Separate Segregated AccountAny person
				required to maintain a separate segregated account pursuant to section 501(e)
				that fails to maintain such a separate segregated account shall pay a penalty
				of $1,000.
									(l)Penalty for
				Failure To Deposit Collected Taxes in a Separate Segregated
				AccountAny person required to deposit collected taxes into a
				separate segregated account maintained pursuant to section 501(e) that fails to
				timely deposit said taxes into the separate segregated account shall pay a
				penalty equal to 1 percent of the amount required to be deposited. The penalty
				imposed by the previous sentence shall be tripled unless said taxes have been
				deposited in the separate segregated account or remitted to the sales tax
				administering authority within 16 days of the date said deposit was due.
									(m)Joint and
				Several Liability for Tax Matters Person and Responsible
				OfficersThe tax matters person (designated pursuant to section
				502(c)) and responsible officers or partners of a firm shall be jointly and
				severally liable for the tax imposed by this subtitle and penalties imposed by
				this subtitle.
									(n)Right of
				ContributionIf more than 1 person is liable with respect to any
				tax or penalty imposed by this subtitle, each person who paid such tax or
				penalty shall be entitled to recover from other persons who are liable for such
				tax or penalty an amount equal to the excess of the amount paid by such person
				over such person’s proportionate share of the tax or penalty.
									(o)Civil Penalties
				and Criminal Fines Not Exclusive
										(1)Civil
				penaltyThe fact that a civil penalty has been imposed shall not
				prevent the imposition of a criminal fine.
										(2)Criminal
				fineThe fact that a criminal fine has been imposed shall not
				prevent the imposition of a civil penalty.
										(p)ConfidentialityAny
				person who violates the requirements relating to confidentiality of tax
				information (as provided in section 605(e)) may be fined up to $10,000 or
				imprisoned for a period of not more than 1 year, or both.
									(q)Cross
				ReferenceFor interest due on late payments, see section
				6601.
									505.Burden of
				persuasion and burden of productionIn all disputes concerning taxes imposed by
				this subtitle, the person engaged in a dispute with the sales tax administering
				authority or the Secretary, as the case may be, shall have the burden of
				production of documents and records but the sales tax administering authority
				or the Secretary shall have the burden of persuasion. In all disputes
				concerning an exemption claimed by a purchaser, if the seller has on file an
				intermediate sale or export sale certificate from the purchaser and did not
				have reasonable cause to believe that the certificate was improperly provided
				by the purchaser with respect to such purchase (within the meaning of section
				103), then the burden of production of documents and records relating to that
				exemption shall rest with the purchaser and not with the seller.
								506.Attorneys’ and
				accountancy feesIn all
				disputes concerning taxes imposed by this subtitle, the person engaged in a
				dispute with the sales tax administering authority or the Secretary, as the
				case may be, shall be entitled to reasonable attorneys’ fees, accountancy fees,
				and other reasonable professional fees incurred in direct relation to the
				dispute unless the sales tax administering authority or the Secretary
				establishes that its position was substantially justified.
								507.Summons,
				examinations, audits, etc
									(a)SummonsPersons
				are subject to administrative summons by the sales tax administering authority
				for records, documents, and testimony required by the sales tax administering
				authority to accurately determine liability for tax under this subtitle. A
				summons shall be served by the sales tax administering authority by an attested
				copy delivered in hand to the person to whom it is directed or left at his last
				known address. The summons shall describe with reasonable certainty what is
				sought.
									(b)Examinations and
				AuditsThe sales tax administering authority has the authority to
				conduct at a reasonable time and place examinations and audits of persons who
				are or may be liable to collect and remit tax imposed by this subtitle and to
				examine the books, papers, records, or other data of such persons which may be
				relevant or material to the determination of tax due.
									(c)Limitation on
				Authority in Case of ReferralNo administrative summons may be
				issued by the sales tax administering authority and no action be commenced to
				enforce an administrative summons with respect to any person if a Justice
				Department referral or referral to a State Attorney General’s Office is in
				effect with respect to such person relating to a tax imposed by this subtitle.
				Such referral is in effect with respect to any person if the sales tax
				administering authority or the Secretary has recommended to the Justice
				Department or a State Attorney General’s Office a grand jury investigation of
				such person or a criminal prosecution of such person that contemplates criminal
				sanctions under this title. A referral shall be terminated when—
										(1)the Justice
				Department or a State Attorney General’s Office notifies the sales tax
				administering authority or the Secretary that he will not—
											(A)prosecute such
				person for any offense connected with the internal revenue laws,
											(B)authorize a grand
				jury investigation of such person with respect to such offense, or
											(C)continue such a
				grand jury investigation, or
											(2)a final
				disposition has been made of any criminal proceeding connected with the
				internal revenue laws, or conforming State sales tax, against such
				person.
										508.RecordsAny person liable to remit taxes pursuant to
				this subtitle shall keep records (including a record of all section 509
				receipts provided, complete records of intermediate and export sales, including
				purchaser’s intermediate and export sales certificates and tax number and the
				net of tax amount of purchase) sufficient to determine the amounts reported,
				collected, and remitted for a period of 6 years after the latter of the filing
				of the report for which the records formed the basis or when the report was due
				to be filed. Any purchaser who purchased taxable property or services but did
				not pay tax by reason of asserting an intermediate and export sales exemption
				shall keep records sufficient to determine whether said exemption was valid for
				a period of 7 years after the purchase of taxable property or services.
								509.Tax to be
				separately stated and charged
									(a)In
				GeneralFor each purchase of taxable property or services for
				which a tax is imposed by section 101, the seller shall charge the tax imposed
				by section 101 separately from the purchase. For purchase of taxable property
				or services for which a tax is imposed by section 101, the seller shall provide
				to the purchaser a receipt for each transaction that includes—
										(1)the property or
				services price exclusive of tax;
										(2)the amount of tax
				paid;
										(3)the property or
				service price inclusive of tax;
										(4)the tax rate (the
				amount of tax paid (per paragraph (2)) divided by the property or service price
				inclusive of tax (per paragraph (3));
										(5)the date that the
				good or service was sold;
										(6)the name of the
				vendor; and
										(7)the vendor
				registration number.
										(b)Vending Machine
				ExceptionThe requirements of subsection (a) shall be
				inapplicable in the case of sales by vending machines. Vending machines for
				purposes of this subsection are machines—
										(1)that dispense
				taxable property in exchange for coins or currency; and
										(2)that sell no
				single item exceeding $10 per unit in price.
										(c)Financial
				Intermediation Services ExceptionThe requirements of subsection
				(a) shall be inapplicable in the case of sales financial intermediation
				service. Receipts shall be issued when the tax is imposed (in accordance with
				section 803 (relating to timing of tax on financial intermediation
				services)).
									510.Coordination
				with title 11No addition to tax shall be made under
				section 504 with respect to a period during which a case is pending under title
				11, United States Code—
									(1)if such tax was
				incurred by the estate and the failure occurred pursuant to an order of the
				court finding probable insufficiency of funds of the estate to pay
				administrative expenses; or
									(2)if—
										(A)such tax was
				incurred by the debtor before the earlier of the order for relief or (in the
				involuntary case) the appointment of a trustee; and
										(B)the petition was
				filed before the due date prescribed by law (including extensions) for filing a
				return of such tax, or the date for making the addition to tax occurs on or
				after the date the petition was filed.
										511.Applicable
				interest rate
									(a)In
				General
										(1)Federal
				short-term rateIn the case of a debt instrument, investment,
				financing lease, or account with a term of not over 3 years, the applicable
				interest rate is the Federal short-term rate.
										(2)Federal mid-term
				rateIn the case of a debt instrument, investment, financing
				lease, or account with a term of over 3 years but not over 9 years, the
				applicable interest rate is the Federal mid-term rate.
										(3)Federal
				long-term rateIn the case of a debt instrument, investment,
				financing lease, or account with a term of over 9 years, the applicable
				interest rate is the Federal long-term rate.
										(b)Federal
				Short-Term RateThe Federal short-term rate shall be the rate
				determined by the Secretary based on the average market yield (selected by the
				Secretary and ending in the calendar month in which the determination is made
				during any one month) on outstanding marketable obligations of the United
				States with remaining periods to maturity of 3 years or fewer.
									(c)Federal Mid-Term
				RateThe Federal mid-term rate shall be the rate determined by
				the Secretary based on the average market yield (selected by the Secretary and
				ending in the calendar month in which the determination is made during any 1
				month) on outstanding marketable obligations of the United States with
				remaining periods to maturity of more than 3 years and not over 9 years.
									(d)Federal
				Long-Term RateThe Federal long-term rate shall be the rate
				determined by the Secretary based on the average market yield (selected by the
				Secretary and ending in the calendar month in which the determination is made
				during any 1 month) on outstanding marketable obligations of the United States
				with remaining periods to maturity of over 9 years.
									(e)Determination of
				RatesDuring each calendar month, the Secretary shall determine
				the Federal short-term rate, the Federal mid-term rate and the Federal
				long-term rate which shall apply during the following calendar month.
									6COLLECTIONS;
				APPEALS; TAXPAYER RIGHTS

									Sec. 601. Collections.
									Sec. 602. Power to levy,
				  etc.
									Sec. 603. Problem resolution
				  offices.
									Sec. 604. Appeals.
									Sec. 605. Taxpayer rights.
									Sec. 606. Installment agreements
				  compromises.

								601.CollectionsThe sales tax administering authority shall
				collect the taxes imposed by this subtitle, except as provided in section 404
				(relating to Federal administration in certain States).
								602.Power to levy,
				etc
									(a)In
				GeneralThe sales tax administering authority may levy and seize
				property, garnish wages or salary and file liens to collect amounts due under
				this subtitle, pursuant to enforcement of—
										(1)a judgment duly
				rendered by a court of law;
										(2)an amount due if
				the taxpayer has failed to exercise his appeals rights under section 604;
				or
										(3)an amount due if
				the appeals process determined that an amount remained due and the taxpayer has
				failed to timely petition the Tax Court for relief.
										(b)Exemption From
				Levy, Seizure, and GarnishmentsThere shall be exempt from levy,
				seizure, and garnishment or penalty in connection with any tax imposed by this
				subtitle—
										(1)wearing apparel,
				school books, fuel, provisions, furniture, personal effects, tools of a trade
				or profession, livestock in a household up to an aggregate value of $15,000;
				and
										(2)monthly money
				income equal to 150 percent of the monthly poverty level (as defined in section
				303).
										(c)Liens To Be
				Timely ReleasedSubject to such reasonable regulations as the
				Secretary may provide, any lien imposed with respect to a tax imposed by this
				title shall be released not later than 30 days after—
										(1)the liability was
				satisfied or became unenforceable; or
										(2)a bond was
				accepted as security.
										603.Problem
				Resolution Offices
									(a)Problem
				Resolution Office To Be EstablishedEach sales tax administering
				authority shall establish an independent Problem Resolution Office and appoint
				an adequate number of problem resolution officers. The head of the problem
				resolution office must be appointed by, and serve at the pleasure of either the
				State Governor (in the case of an administering State) or the President of the
				United States.
									(b)Authority of
				Problem Resolution OfficersProblem resolution officers shall
				have the authority to investigate complaints and issue a Taxpayer Assistance
				Order to administratively enjoin any collection activity if, in the opinion of
				the problem resolution officer, said collection activity is reasonably likely
				to not be in compliance with law or to prevent hardship (other than by reason
				of having to pay taxes lawfully due). Problem resolution officers shall also
				have the authority to issue Taxpayer Assistance Orders releasing or returning
				property that has been levied upon or seized, ordering that a lien be released
				and that garnished wages be returned. A Taxpayer Assistance Order may only be
				rescinded or modified by the problem resolution officer that issued it, by the
				highest official in the relevant sales tax administering authority or by its
				general counsel upon a finding that the collection activity is justified by
				clear and convincing evidence. The authority to reverse this Taxpayer
				Assistance Order may not be delegated.
									(c)Form of Request
				for Taxpayer Assistance OrderThe Secretary shall establish a
				form and procedure to aid persons requesting the assistance of the Problem
				Resolution Office and to aid the Problem Resolution Office in understanding the
				needs of the person seeking assistance. The use of this form, however, shall
				not be a prerequisite to a problem resolution officer taking action, including
				issuing a Taxpayer Assistance Order.
									(d)Content of
				Taxpayer Assistance OrderA Taxpayer Assistance Order shall
				contain the name of the problem resolution officer, any provision relating to
				the running of any applicable period of limitation, the name of the person that
				the Taxpayer Assistance Order assists, the government office (or employee or
				officer of said government office) to whom it is directed and the action or
				cessation of action that the Taxpayer Assistance Order requires of said
				government officer (or employee or officer of said government office). The
				Taxpayer Assistance Order need not contain findings of fact or its legal basis;
				however, the problem resolution officer must provide findings of fact and the
				legal basis for the issuance of the Taxpayer Assistance Order to the sales tax
				administering authority upon the request of an officer of said authority within
				2 weeks of the receipt of such request.
									(e)Independence
				ProtectedProblem resolution officers shall not be disciplined or
				adversely affected for the issuance of administrative injunctions unless a
				pattern of issuing injunctions that are manifestly unreasonable is proven in an
				administrative hearing by a preponderance of the evidence.
									(f)Other Rights Not
				LimitedNothing in this section shall limit the authority of the
				sales tax administering authority, the registered person or other person from
				pursuing any legal remedy in any court with jurisdiction over the dispute at
				issue.
									(g)LimitationsThe
				running of any applicable period of limitation shall be suspended for a period
				of 8 weeks following the issuance of a Taxpayer Assistance Order or, if
				specified, for a longer period set forth in the Taxpayer Assistance Order
				provided the suspension does not exceed 6 months.
									604.Appeals
									(a)Administrative
				AppealsThe sales tax administering authority shall establish an
				administrative appeals process wherein the registered person or other person in
				disagreement with a decision of the sales tax administering authority asserting
				liability for tax is provided a full and fair hearing in connection with any
				disputes said person has with the sales tax administering authority.
									(b)Timing of
				Administrative AppealsSaid administrative appeal must be made
				within 60 days of receiving a final notice of amount due pursuant to section
				605(d) unless leave for an extension is granted by the appeals officer in a
				form prescribed by the Secretary. Leave shall be granted to avoid
				hardship.
									605.Taxpayer
				rights
									(a)Rights To Be
				DisclosedThe sales tax administering authority shall provide to
				any person against whom it has—
										(1)commenced an audit
				or investigation;
										(2)issued a final
				notice of amount due;
										(3)filed an
				administrative lien, levy, or garnishment;
										(4)commenced other
				collection action;
										(5)commenced an
				action for civil penalties; or
										(6)any other legal
				action,
										a
				document setting forth in plain English the rights of the person. The document
				shall explain the administrative appeals process, the authority of the Problem
				Resolution Office (established pursuant to section 603) and how to contact that
				Office, the burden of production and persuasion that the person and the sales
				tax administering authority bear (pursuant to section 505), the right of the
				person to professional fees (pursuant to section 506), the right to record
				interviews and such other rights as the person may possess under this subtitle.
				Said document will also set forth the procedures for entering into an
				installment agreement.(b)Right to
				Professional AssistanceIn all dealings with the sales tax
				administering authority, a person shall have the right to assistance, at their
				own expense, of 1 or more professional advisors.
									(c)Right To Record
				InterviewsAny person who is interviewed by an agent of the sales
				tax administering authority shall have the right to video or audio tape the
				interview at the person’s own expense.
									(d)Right to Final
				Notice of Amount DueNo collection or enforcement action will be
				commenced against a person until 30 days after they have been provided with a
				final notice of amount due under this subtitle by the sales tax administering
				authority. The final notice of amount due shall set forth the amount of tax due
				(along with any interest and penalties due) and the factual and legal basis for
				such amounts being due with sufficient specificity that such basis can be
				understood by a reasonable person who is not a tax professional reading the
				notice. The final notice shall be sent by certified mail, return receipt
				requested, to—
										(1)the address last
				provided by a registered seller; or
										(2)the best available
				address to a person who is not a registered seller.
										(e)Confidentiality
				of Tax Information
										(1)In
				generalAll reports and report information (related to any
				internal revenue law) shall be confidential and except as authorized by this
				title—
											(A)no officer or
				employee (including former officers and employees) of the United States;
											(B)no officer or
				employee (including former officers and employees) of any State or local agency
				who has had access to returns or return information; and
											(C)no other person
				who has had access to returns or return information;
											shall
				disclose any report or report information obtained by him in any manner in
				connection with his service as such officer or employee or otherwise.(2)DesigneesThe
				sales tax administering authority may, subject to such requirements as the
				Secretary may impose, disclose the report and report information of a person to
				that person or persons as that person may designate to receive said information
				or return.
										(3)Other sales tax
				administering authoritiesA sales tax administering authority may
				impose, disclose the report and report information to another sales tax
				administering authority.
										(4)IncompetencyA
				sales tax administering authority may, subject to such requirements as the
				Secretary may impose, disclose the report and report information to the
				committee, trustee, or guardian of a person who is incompetent.
										(5)Deceased
				personsA sales tax administering authority may, subject to such
				requirements as the Secretary may impose, disclose the report and report
				information to the decedent’s—
											(A)administrator,
				executor, estate trustee, or
											(B)heir at law, next
				of kin, or beneficiary under a will who has a material interest that will be
				affected by the information.
											(6)BankruptcyA
				sales tax administering authority may, subject to such requirements as the
				Secretary may impose, disclose the report and report information to a person’s
				trustee in bankruptcy.
										(7)CongressUpon
				written request from the Chairman of the Committee on Ways and Means, the
				Chairman of the Committee on Finance of the Senate, or the Chairman or Chief of
				Staff of the Joint Committee on Taxation, a sales tax administering authority
				shall disclose the report and report information, except that any report or
				report information that can be associated with or otherwise identify a
				particular person shall be furnished to such committee only when sitting in
				closed executive session unless such person otherwise consents in writing to
				such disclosure.
										(8)Waiver of
				privacy rightsA person may waive confidentiality rights provided
				by this section. Such waiver must be in writing.
										(9)Internal
				useDisclosure of the report or report information by officers or
				employees of a sales tax administering authority to other officers or employees
				of a sales tax administering authority in the ordinary course of tax
				administration activities shall not constitute unlawful disclosure of the
				report or report information.
										(10)Statistical
				useUpon request in writing by the Secretary of Commerce, the
				Secretary shall furnish such reports and report information to officers and
				employees of the Department of Commerce as the Secretary may prescribe by
				regulation for the purposes of, and only to the extent necessary in, the
				structuring of censuses and national economic accounts and conducting related
				statistical activities authorized by law.
										(11)Department of
				the treasuryReturns and return information shall be open for
				inspection by officers and employees of the Department of the Treasury whose
				official duties require such inspection or disclosure for the purpose of, and
				only to the extent necessary for, preparing economic or financial forecasts,
				projections, analyses, or estimates. Such inspection or disclosure shall be
				permitted only upon written request that sets forth the reasons why such
				inspection or disclosure is necessary and is signed by the head of the bureau
				or office of the Department of the Treasury requesting the inspection or
				disclosure.
										606.Installment
				agreements; compromisesThe
				sales tax administering authority is authorized to enter into written
				agreements with any person under which the person is allowed to satisfy
				liability for payment of any tax under this subtitle (and penalties and
				interest relating thereto) in installment payments if the sales tax
				administering authority determines that such agreement will facilitate the
				collection of such liability. The agreement shall remain in effect for the term
				of the agreement unless the information that the person provided to the sales
				tax administering authority was materially inaccurate or incomplete. The sales
				tax administering authority may compromise any amounts alleged to be
				due.
								7Special
				rules

									Sec. 701. Hobby activities.
									Sec. 702. Gaming activities.
									Sec. 703. Government
				  purchases.
									Sec. 704. Government
				  enterprises.
									Sec. 705. Mixed use
				  property.
									Sec. 706. Not-for-profit
				  organizations.

								701.Hobby
				activities
									(a)Hobby
				ActivitiesNeither the exemption afforded by section 102 for
				intermediate sales nor the credits available pursuant to section 202 or 203
				shall be available for any taxable property or service purchased for use in an
				activity if that activity is not engaged in for-profit.
									(b)Status
				DeemedIf the activity has received gross payments for the sale
				of taxable property or services that exceed the sum of—
										(1)taxable property
				and services purchased;
										(2)wages and salary
				paid; and
										(3)taxes (of any
				type) paid,
										in 2 or
				more of the most recent 3 calendar years during which it operated when the
				business activity shall be conclusively deemed to be engaged in for
				profit.702.Gaming
				activities
									(a)RegistrationAny
				person selling 1 or more chances is a gaming sponsor and shall register, in a
				form prescribed by the Secretary, with the sales tax administering authority as
				a gaming sponsor.
									(b)Chance
				DefinedFor purposes of this section, the term
				chance means a lottery ticket, a raffle ticket, chips, other
				tokens, a bet or bets placed, a wager or wagers placed, or any similar device
				where the purchase of the right gives rise to an obligation by the gaming
				sponsor to pay upon the occurrence of—
										(1)a random or
				unpredictable event; or
										(2)an event over
				which neither the gaming sponsor nor the person purchasing the chance has
				control over the outcome.
										(c)Chances Not
				Taxable Property or ServiceNotwithstanding any other provision
				in this subtitle, a chance is not taxable property or services for purposes of
				section 101.
									(d)Tax on Gaming
				Services ImposedA 23-percent tax is hereby imposed on the
				taxable gaming services of a gaming sponsor. This tax shall be paid and
				remitted by the gaming sponsor. The tax shall be remitted by the 15th day of
				each month with respect to taxable gaming services during the previous calendar
				month.
									(e)Taxable Gaming
				Services DefinedFor purposes of this section, the term
				taxable gaming services means—
										(1)gross receipts of
				the gaming sponsor from the sale of chances, minus
										(2)the sum of—
											(A)total gaming
				payoffs to chance purchasers (or their designees); and
											(B)gaming specific
				taxes (other than the tax imposed by this section) imposed by the Federal,
				State, or local government.
											703.Government
				purchases
									(a)Government
				Purchases
										(1)Purchases by the
				federal governmentPurchases by the Federal Government of taxable
				property and services shall be subject to the tax imposed by section
				101.
										(2)Purchase by
				state governments and their political subdivisionsPurchases by
				State governments and their political subdivisions of taxable property and
				services shall be subject to the tax imposed by section 101.
										(b)Cross
				ReferencesFor purchases by government enterprises see section
				704.
									704.Government
				enterprises
									(a)Government
				Enterprises To Collect and Remit Taxes on SalesNothing in this
				subtitle shall be construed to exempt any Federal, State, or local governmental
				unit or political subdivision (whether or not the State is an administering
				State) operating a government enterprise from collecting and remitting tax
				imposed by this subtitle on any sale of taxable property or services.,
				Government enterprises shall comply with all duties imposed by this subtitle
				and shall be liable for penalties and subject to enforcement action in the same
				manner as private persons that are not government enterprises.
									(b)Government
				EnterpriseAny entity owned or operated by a Federal, State, or
				local governmental unit or political subdivision that receives gross payments
				from private persons is a government enterprise, except that a government-owned
				entity shall not become a government enterprise for purposes of this section
				unless in any quarter it has revenues from selling taxable property or services
				that exceed $2,500.
									(c)Government
				Enterprises Intermediate Sales
										(1)In
				generalGovernment enterprises shall not be subject to tax on
				purchases that would not be subject to tax pursuant to section 102(b) if the
				government enterprise were a private enterprise.
										(2)ExceptionGovernment
				enterprises may not use the exemption afforded by section 102(b) to serve as a
				conduit for tax-free purchases by government units that would otherwise be
				subject to taxation on purchases pursuant to section 703. Transfers of taxable
				property or services purchased exempt from tax from a government enterprise to
				such government unit shall be taxable.
										(d)Separate Books
				of AccountAny government enterprise must maintain books of
				account, separate from the nonenterprise government accounts, maintained in
				accordance with generally accepted accounting principles.
									(e)Trade or
				BusinessA government enterprise shall be treated as a trade or
				business for purposes of this subtitle.
									(f)Enterprise
				Subsidies Constitute Taxable PurchaseA transfer of funds to a
				government enterprise by a government entity without full consideration shall
				constitute a taxable government purchase with the meaning of section 703 to the
				extent that the transfer of funds exceeds the fair market value of the
				consideration.
									705.Mixed use
				property
									(a)Mixed Use
				Property or Service
										(1)Mixed use
				property or service definedFor purposes of this section, the
				term mixed use property or service is a taxable property or
				taxable service used for both taxable use or consumption and for a purpose that
				would not be subject to tax pursuant to section 102(a)(1).
										(2)Taxable
				thresholdMixed use property or service shall be subject to tax
				notwithstanding section 102(a)(1) unless such property or service is used more
				than 95 percent for purposes that would give rise to an exemption pursuant to
				section 102(a)(1) during each calendar year (or portions thereof) it is
				owned.
										(3)Mixed use
				property or services creditA person registered pursuant to
				section 502 is entitled to a business use conversion credit (pursuant to
				section 202) equal to the product of—
											(A)the mixed use
				property amount; and
											(B)the business use
				ratio; and
											(C)the rate of tax
				imposed by section 101.
											(4)Mixed use
				property amountThe mixed use property amount for each month (or
				fraction thereof) in which the property was owned shall be—
											(A)one-three-hundred-sixtieth
				of the gross payments for real property for 360 months or until the property is
				sold;
											(B)one-eighty-fourth
				of the gross payments for tangible personal property for 84 months or until the
				property is sold;
											(C)one-sixtieth of
				the gross payments for vehicles for 60 months or until the property is sold;
				or
											(D)for other types of
				taxable property or services, a reasonable amount or in accordance with
				regulations prescribed by the Secretary.
											(5)Business use
				ratioFor purposes of this section, the term business use
				ratio means the ratio of business use to total use for a particular
				calendar month (or portion thereof if the property was owned for only part of
				said calendar month). For vehicles, the business use ratio will be the ratio of
				business purpose miles to total miles in a particular calendar month. For real
				property, the business use ratio is the ratio of floor space used primarily for
				business purposes to total floor space in a particular calendar month. For
				tangible personal property (except for vehicles), the business use ratio is the
				ratio of total time used for business purposes to total time used in a
				particular calendar year. For other property or services, the business ratio
				shall be calculated using a reasonable method. Reasonable records must be
				maintained to support a person’s business use of the mixed use property or
				service.
										(b)Timing of
				Business Use Conversion Credit Arising Out of Ownership of Mixed Use
				PropertyA person entitled to a credit pursuant to subsection
				(a)(3) arising out of the ownership of mixed use property must account for the
				mixed use on a calendar year basis, and may file for the credit with respect to
				mixed use property in any month following the calendar year giving rise to the
				credit.
									(c)Cross
				ReferenceFor business use conversion credit, see section
				202.
									706.Not-for-Profit
				organizations
									(a)Not-for-Profit
				OrganizationsDues, contributions, and similar payments to
				qualified not-for-profit organizations shall not be considered gross payments
				for taxable property or services for purposes of this subtitle.
									(b)DefinitionFor
				purposes of this section, the term qualified not-for-profit
				organization means a not-for-profit organization organized and operated
				exclusively—
										(1)for religious,
				charitable, scientific, testing for public safety, literary, or educational
				purposes;
										(2)as civic leagues
				or social welfare organizations;
										(3)as labor,
				agricultural, or horticultural organizations;
										(4)as chambers of
				commerce, business leagues, or trade associations; or
										(5)as fraternal
				beneficiary societies, orders, or associations;
										no part
				of the net earnings of which inures to the benefit of any private shareholder
				or individual.(c)Qualification
				CertificatesUpon application in a form prescribed by the
				Secretary, the sales tax administering authority shall provide qualification
				certificates to qualified not-for-profit organizations.
									(d)Taxable
				TransactionsIf a qualified not-for-profit organization provides
				taxable property or services in connection with contributions, dues, or similar
				payments to the organization, then it shall be required to treat the provision
				of said taxable property or services as a purchase taxable pursuant to this
				subtitle at the fair market value of said taxable property or services.
									(e)ExemptionsTaxable
				property and services purchased by a qualified not-for-profit organization
				shall be eligible for the exemptions provided in section 102.
									8Financial
				Intermediation Services

									Sec. 801. Determination of financial
				  intermediation services amount.
									Sec. 802. Bad debts.
									Sec. 803. Timing of tax on financial
				  intermediation services.
									Sec. 804. Financing leases.
									Sec. 805. Basic interest
				  rate.
									Sec. 806. Foreign financial
				  intermediation services.

								801.Determination
				of financial intermediation services amount
									(a)Financial
				Intermediation ServicesFor purposes of this subtitle—
										(1)In
				generalThe term financial intermediation services
				means the sum of—
											(A)explicitly charged
				fees for financial intermediation services, and
											(B)implicitly charged
				fees for financial intermediation services.
											(2)Explicitly
				charged fees for financial intermediation servicesThe term
				explicitly charged fees for financial intermediation services
				includes—
											(A)brokerage
				fees;
											(B)explicitly stated
				banking, loan origination, processing, documentation, credit check fees, or
				other similar fees;
											(C)safe-deposit box
				fees;
											(D)insurance
				premiums, to the extent such premiums are not allocable to the investment
				account of the underlying insurance policy;
											(E)trustees’ fees;
				and
											(F)other financial
				services fees (including mutual fund management, sales, and exit fees).
											(3)Implicitly
				charged fees for financial intermediation services
											(A)In
				generalThe term implicitly charged fees for financial
				intermediation services includes the gross imputed amount in relation to
				any underlying interest-bearing investment, account, or debt.
											(B)Gross imputed
				amountFor purposes of subparagraph (A), the term gross
				imputed amount means—
												(i)with respect to
				any underlying interest-bearing investment or account, the product of—
													(I)the excess (if
				any) of the basic interest rate (as defined in section 805) over the rate paid
				on such investment; and
													(II)the amount of the
				investment or account; and
													(ii)with respect to
				any underlying interest-bearing debt, the product of—
													(I)the excess (if
				any) of the rate paid on such debt over the basic interest rate (as defined in
				section 805); and
													(II)the amount of the
				debt.
													(b)Seller of
				Financial Intermediation ServicesFor purposes of section 103(a),
				the seller of financial intermediation services shall be—
										(1)in the case of
				explicitly charged fees for financial intermediation services, the seller shall
				be the person who receives the gross payments for the charged financial
				intermediation services;
										(2)in the case of
				implicitly charged fees for financial intermediation services with respect to
				any underlying interest-bearing investment or account, the person making the
				interest payments on the interest-bearing investment or account; and
										(3)in the case of
				implicitly charged fees for financial intermediation services with respect to
				any interest-bearing debt, the person receiving the interest payments on the
				interest-bearing debt.
										802.Bad
				debts
									(a)In
				GeneralFor purposes of section 205(a), a bad debt shall be a
				business debt that becomes wholly or partially worthless to the payee.
									(b)Business
				LoanFor purposes of subsection (a), a business loan or debt is a
				bona fide loan or debt made for a business purpose that both parties intended
				be repaid.
									(c)Determination of
				Worthlessness
										(1)In
				generalNo loan or debt shall be considered wholly or partially
				worthless unless it has been in arrears for 180 days or more, except that if a
				debt is discharged wholly or partially in bankruptcy before 180 days has
				elapsed, then it shall be deemed wholly or partially worthless on the date of
				discharge.
										(2)Determination by
				holderA loan or debt that has been in arrears for 180 days or
				more may be deemed wholly or partially worthless by the holder unless a payment
				schedule has been entered into between the debtor and the lender.
										(d)Cross
				ReferenceSee section 205(c) for tax on subsequent
				payments.
									803.Timing of tax
				on financial intermediation servicesThe tax on financial intermediation services
				provided by section 801 with respect to an underlying investment account or
				debt shall be imposed and collected with the same frequency that statements are
				rendered by the financial institution in connection with the investment account
				or debt but not less frequently than quarterly.
								804.Financing
				leases
									(a)DefinitionFor
				purposes of this section, the term financing lease means any lease
				under which the lessee has the right to acquire the property for 50 percent or
				less of its fair market value at the end of the lease term.
									(b)General
				RuleFinancing leases shall be taxed in the method set forth in
				this section.
									(c)Determination of
				Principal and Interest Components of Financing LeaseThe
				Secretary shall promulgate rules for disaggregating the principal and interest
				components of a financing lease. The principal amount shall be determined to
				the extent possible by examination of the contemporaneous sales price or prices
				of property the same or similar as the leased property.
									(d)Alternative
				MethodIn the event that contemporaneous sales prices or property
				the same or similar as the leased property are not available, the principal and
				interest components of a financing lease shall be disaggregated using the
				applicable interest rate (as defined in section 511) plus 4 percent.
									(e)Principal
				ComponentThe principal component of the financing lease shall be
				subject to tax as if a purchase in the amount of the principal component had
				been made on the day on which said lease was executed.
									(f)Interest
				ComponentThe financial intermediation services amount with
				respect to the interest component of the financing lease shall be subject to
				tax under this subtitle.
									(g)CoordinationIf
				the principal component and financial intermediation services amount with
				respect to the interest component of a lease have been taxed pursuant to this
				section, then the gross lease or rental payments shall not be subject to
				additional tax.
									805.Basic interest
				rateFor purposes of this
				chapter, the basic interest rate with respect to a debt instrument, investment,
				financing lease, or account shall be the applicable interest rate (as
				determined in section 511). For debt instruments, investments, or accounts of
				contractually fixed interest, the applicable interest rate of the month of
				issuance shall apply. For debt instruments, investments, or accounts of
				variable interest rates and which have no reference interest rate, the
				applicable interest shall be the Federal short-term interest rate for each
				month. For debt instruments, investments, or accounts of variable interest
				rates and which have a reference interest rate, the applicable interest shall
				be the applicable interest rate for the reference interest rate for each
				month.
								806.Foreign
				financial intermediation services
									(a)Special Rules
				Relating to International Financial Intermediation
				ServicesFinancial intermediation services shall be deemed as
				used or consumed within the United States if the person (or any related party
				as defined in section 205(e)) purchasing the services is a resident of the
				United States.
									(b)Designation of
				Tax RepresentativeAny person that provides financial
				intermediation services to United States residents must, as a condition of
				lawfully providing such services, designate, in a form prescribed by the
				Secretary, a tax representative for purposes of this subtitle. The tax
				representative shall be responsible for ensuring that the taxes imposed by this
				subtitle are collected and remitted and shall be jointly and severally liable
				for collecting and remitting these taxes. The Secretary may require reasonable
				bond of the tax representative. The Secretary or a sales tax administering
				authority may bring an action seeking a temporary restraining order, an
				injunction, or such other order as may be appropriate to enforce this
				section.
									(c)Cross
				ReferencesFor definition of person, see section 901.
									9Additional
				matters

									Sec. 901. Additional
				  matters.
									Sec. 902. Transition
				  matters.
									Sec. 903. Wages to be reported to Social
				  Security Administration.
									Sec. 904. Trust Fund
				  revenue.
									Sec. 905. Withholding of tax on
				  nonresident aliens and foreign corporations.

								901.Additional
				matters
									(a)Intangible
				Property Antiavoidance RuleNotwithstanding section
				2(a)(14)(a)(i), the sale of a copyright or trademark shall be treated as the
				sale of taxable services (within the meaning of section 101(a)) if the
				substance of the sales of copyright or trademark constituted the sale of the
				services that produced the copyrighted material or the trademark.
									(b)De Minimis
				PaymentsUp to $400 of gross payments per calendar year shall be
				exempt from the tax imposed by section 101 if—
										(1)made by a person
				not in connection with a trade or business at any time during such calendar
				year prior to making said gross payments, and
										(2)made to purchase
				any taxable property or service which is imported into the United States by
				such person for use or consumption by such person in the United States.
										(c)De Minimis
				SalesUp to $1,200 per calendar year of gross payments shall be
				exempt from the tax imposed by section 101 if received—
										(1)by a person not in
				connection with a trade or business during such calendar year prior to the
				receipt of said gross payments; and
										(2)in connection with
				a casual or isolated sale.
										(d)De Minimis Sale
				of Financial Intermediation ServicesUp to $10,000 per calendar
				year of gross payments received by a person from the sale of financial
				intermediation services (as determined in accordance with section 801) shall be
				exempt from the tax imposed by section 101. The exemption provided by this
				subsection is in addition to other exemptions afforded by this chapter. The
				exemption provided by this subsection shall not be available to large sellers
				(as defined in section 501(e)(3)).
									(e)Proxy Buying
				TaxableIf a registered person provides taxable property or
				services to a person either as a gift, prize, reward, or as remuneration for
				employment, and such taxable property or services were not previously subject
				to tax pursuant to section 101, then the provision of such taxable property or
				services by the registered person shall be deemed the conversion of such
				taxable property or services to personal use subject to tax pursuant to section
				103(c) at the tax inclusive fair market value of such taxable property or
				services.
									(f)Substance Over
				FormThe substance of a transaction will prevail over its form if
				the transaction has no bona fide economic purpose and is designed to evade tax
				imposed by this subtitle.
									(g)Certain Employee
				Discounts Taxable
										(1)Employee
				discountFor purposes of this subsection, the term employee
				discount means an employer’s offer of taxable property or services for
				sale to its employees or their families (within the meaning of section 302(b))
				for less than the offer of such taxable property or services to the general
				public.
										(2)Employee
				discount amountFor purposes of this subsection, the employee
				discount amount is the amount by which taxable property or services are sold
				pursuant to an employee discount below the amount for which such taxable
				property or services would have been sold to the general public.
										(3)Taxable
				amountIf the employee discount amount exceeds 20 percent of the
				price that the taxable property or services would have been sold to the general
				public, then the sale of such taxable property or services by the employer
				shall be deemed the conversion of such taxable property or services to personal
				use and tax shall be imposed on the taxable employee discount amount. The
				taxable employee discount amount shall be—
											(A)the employee
				discount amount, minus
											(B)20 percent of the
				amount for which said taxable property or services would have been sold to the
				general public.
											(h)Saturday,
				Sunday, or Legal HolidayWhen the last day prescribed for
				performing any act required by this subtitle falls on a Saturday, Sunday, or
				legal holiday (in the jurisdiction where the return is to be filed), the
				performance of such act shall be considered timely if it is performed on the
				next day which is not a Saturday, Sunday, or legal holiday (in the jurisdiction
				where the return is to be filed).
									902.Transition
				matters
									(a)Inventory
										(1)Qualified
				inventoryInventory held by a trade or business on the close of
				business on December 31, 2012, shall be qualified inventory if it is
				sold—
											(A)before December
				31, 2013;
											(B)by a registered
				person; and
											(C)subject to the tax
				imposed by section 101.
											(2)CostsFor
				purposes of this section, qualified inventory shall have the cost that it had
				for Federal income tax purposes for the trade or business as of December 31,
				2012 (including any amounts capitalized by reason of section 263A of the
				Internal Revenue Code of 1986 as in effect on December 31, 2012).
										(3)Transitional
				inventory creditThe trade or business which held the qualified
				inventory on the close of business on December 31, 2012, shall be entitled to a
				transitional inventory credit equal to the cost of the qualified inventory
				(determined in accordance with paragraph (2)) times the rate of tax imposed by
				section 101.
										(4)Timing of
				creditThe credit provided under paragraph (3) shall be allowed
				with respect to the month when the inventory is sold subject to the tax imposed
				by this subtitle. Said credit shall be reported as an intermediate and export
				sales credit and the person claiming said credit shall attach supporting
				schedules in the form that the Secretary may prescribe.
										(b)Work-in-ProcessFor
				purposes of this section, inventory shall include work-in-process.
									(c)Qualified
				Inventory Held by Businesses Not Selling Said Qualified Inventory at
				Retail
										(1)In
				generalQualified inventory held by businesses that sells said
				qualified inventory not subject to tax pursuant to section 102(a) shall be
				eligible for the transitional inventory credit only if that business (or a
				business that has successor rights pursuant to paragraph (2)) receives
				certification in a form satisfactory to the Secretary that the qualified
				inventory was subsequently sold subject to the tax imposed by this
				subtitle.
										(2)Transitional
				inventory credit right may be soldThe business entitled to the
				transitional inventory credit may sell the right to receive said transitional
				inventory credit to the purchaser of the qualified inventory that gave rise to
				the credit entitlement. Any purchaser of such qualified inventory (or property
				or services into which the qualified inventory has been incorporated) may sell
				the right to said transitional inventory credit to a subsequent purchaser of
				said qualified inventory (or property or services into which the qualified
				inventory has been incorporated).
										903.Wages to be
				reported to Social Security Administration
									(a)In
				GeneralEmployers shall submit such information to the Social
				Security Administration as is required by the Social Security Administration to
				calculate Social Security benefits under title II of the
				Social Security Act, including wages
				paid, in a form prescribed by the Secretary. A copy of the employer submission
				to the Social Security Administration relating to each employee shall be
				provided to each employee by the employer.
									(b)WagesFor
				purposes of this section, the term wages means all cash
				remuneration for employment (including tips to an employee by third parties
				provided that the employer or employee maintains records documenting such tips)
				including self-employment income; except that such term shall not
				include—
										(1)any insurance
				benefits received (including death benefits);
										(2)pension or annuity
				benefits received;
										(3)tips received by
				an employee over $5,000 per year; and
										(4)benefits received
				under a government entitlement program (including Social Security benefits and
				unemployment compensation benefits).
										(c)Self-Employment
				IncomeFor purposes of subsection (b), the term
				self-employment income means gross payments received for taxable
				property or services minus the sum of—
										(1)gross payments
				made for taxable property or services (without regard to whether tax was paid
				pursuant to section 101 on such taxable property or services), and
										(2)wages paid by the
				self-employed person to employees of the self-employed person.
										904.Trust Fund
				revenue
									(a)Secretary To
				Make Allocation of Sales Tax RevenueThe Secretary shall allocate
				the revenue received by virtue of the tax imposed by section 101 in accordance
				with this section. The revenue shall be allocated among—
										(1)the general
				revenue,
										(2)the old-age and
				survivors insurance trust fund,
										(3)the disability
				insurance trust fund,
										(4)the hospital
				insurance trust fund, and
										(5)the Federal
				supplementary medical insurance trust fund.
										(b)General
				Rule
										(1)General
				revenueThe proportion of total revenue allocated to the general
				revenue shall be the same proportion as the rate in section 101(b)(4) bears to
				the combined Federal tax rate percentage (as defined in section
				101(b)(3)).
										(2)The amount of
				revenue allocated to the old-age and survivors insurance and disability
				insurance trust funds shall be the same proportion as the old-age, survivors
				and disability insurance rate (as defined in subsection (d)) bears to the
				combined Federal tax rate percentage (as defined in section 101(b)(3)).
										(3)The amount of
				revenue allocated to the hospital insurance and Federal supplementary medical
				insurance trust funds shall be the same proportion as the hospital insurance
				rate (as defined in subsection (e)) bears to the combined Federal tax rate
				percentage (as defined in section 101(b)(3)).
										(c)Calendar Year
				2013Notwithstanding subsection (b), the revenue allocation
				pursuant to subsection (a) for calendar year 2013 shall be as follows:
										(1)64.83 percent of
				total revenue to general revenue,
										(2)27.43 percent of
				total revenue to the old-age and survivors insurance and disability insurance
				trust funds, and
										(3)7.74 percent of
				total revenue to the hospital insurance and Federal supplementary medical
				insurance trust funds.
										(d)Old-Age,
				Survivors and Disability Insurance RateThe old-age, survivors
				and disability insurance rate shall be determined by the Social Security
				Administration. The old-age, survivors and disability insurance rate shall be
				that sales tax rate which is necessary to raise the same amount of revenue that
				would have been raised by imposing a 12.4 percent tax on the Social Security
				wage base (including self-employment income) as determined in accordance with
				chapter 21 of the Internal Revenue Code most recently in effect prior to the
				enactment of this Act. The rate shall be determined using actuarially sound
				methodology and announced at least 6 months prior to the beginning of the
				Calendar year for which it applies.
									(e)Hospital
				Insurance RateThe hospital insurance rate shall be determined by
				the Social Security Administration. The hospital insurance rate shall be that
				sales tax rate which is necessary to raise the same amount of revenue that
				would have been raised by imposing a 2.9 percent tax on the Medicare wage base
				(including self-employment income) as determined in accordance with chapter 21
				of the Internal Revenue Code most recently in effect prior to the enactment of
				this Act. The rate shall be determined using actuarially sound methodology and
				announced at least 6 months prior to the beginning of the calendar year for
				which it applies.
									(f)AssistanceThe
				Secretary shall provide such technical assistance as the Social Security
				Administration shall require to determine the old-age, survivors and disability
				insurance rate and the hospital insurance rate.
									(g)Further
				Allocations
										(1)Old-age,
				survivors and disability insuranceThe Secretary shall allocate
				revenue received because of the old-age, survivors and disability insurance
				rate to the old-age and survivors insurance trust fund and the disability
				insurance trust fund in accordance with law or, in the absence of other
				statutory provision, in the same proportion that the old-age and survivors
				insurance trust fund receipts bore to the sum of the old-age and survivors
				insurance trust fund receipts and the disability insurance trust fund receipts
				in calendar year 2012 (taking into account only receipts pursuant to chapter 21
				of the Internal Revenue Code).
										(2)Hospital
				insuranceThe Secretary shall allocate revenue received because
				of the hospital insurance rate to the hospital insurance trust fund and the
				Federal supplementary medical insurance trust fund in accordance with law or,
				in the absence of other statutory provision, in the same proportion that
				hospital insurance trust fund receipts bore to the sum of the hospital
				insurance trust fund receipts and Federal supplementary medical insurance trust
				fund receipts in calendar year 2012 (taking into account only receipts pursuant
				to chapter 21 of the Internal Revenue Code).
										905.Withholding of
				tax on nonresident aliens and foreign corporations
									(a)In
				GeneralAll persons, in whatever capacity acting (including
				lessees or mortgagors or real or personal property, fiduciaries, employers, and
				all officers and employees of the United States) having control, receipt,
				custody, disposal, or payment of any income to the extent such income
				constitutes gross income from sources within the United States of any
				nonresident alien individual, foreign partnership, or foreign corporation shall
				deduct and withhold from that income a tax equal to 23 percent thereof.
									(b)ExceptionNo
				tax shall be required to be deducted from interest on portfolio debt
				investments.
									(c)Treaty
				CountriesIn the case of payments to nonresident alien
				individuals, foreign partnerships, or foreign corporations that have a
				residence in (or the nationality of a country) that has entered into a tax
				treaty with the United States, then the rate of withholding tax prescribed by
				the treaty shall
				govern.
									.
				202.Conforming and
			 technical amendments
				(a)RepealsThe
			 following provisions of the Internal Revenue Code of 1986 are repealed:
					(1)Subchapter A of
			 chapter 61 of subtitle D (as redesignated by section 104) (relating to
			 information and returns).
					(2)Sections 6103
			 through 6116 of subchapter B of chapter 61 of subtitle D (as so
			 redesignated).
					(3)Section 6157
			 (relating to unemployment taxes).
					(4)Section 6163
			 (relating to estate taxes).
					(5)Section 6164
			 (relating to corporate taxes).
					(6)Section 6166
			 (relating to estate taxes).
					(7)Section 6167
			 (relating to foreign expropriation losses).
					(8)Sections 6201,
			 6205, and 6207 (relating to assessments).
					(9)Subchapter C of
			 chapter 63 of subtitle D (as so redesignated) (relating to tax treatment of
			 partnership items).
					(10)Section 6305
			 (relating to collections of certain liabilities).
					(11)Sections 6314,
			 6315, 6316, and 6317 (relating to payments of repealed taxes).
					(12)Sections 6324,
			 6324A, and 6324B (relating to liens for estate and gift taxes).
					(13)Section 6344
			 (relating to cross references).
					(14)Section 6411
			 (relating to carrybacks).
					(15)Section 6413
			 (relating to employment taxes).
					(16)Section 6414
			 (relating to withheld income taxes).
					(17)Section 6422
			 (relating to cross references).
					(18)Section 6425
			 (relating to overpayment of corporate estimated taxes).
					(19)Section 6504
			 (relating to cross references).
					(20)Section 6652
			 (relating to failure to file certain information returns).
					(21)Sections 6654 and
			 6655 (relating to failure to payment estimated income tax).
					(22)Section 6662
			 (relating to penalties).
					(23)Sections 6677
			 through 6711 (relating to income tax related penalties).
					(24)Part II of
			 subchapter B of chapter 68 (relating to certain information returns).
					(25)Part I of
			 subchapter A of chapter 70 (relating to termination of taxable year).
					(26)Section 6864
			 (relating to certain carrybacks).
					(27)Section 7103
			 (relating to cross references).
					(28)Section 7204
			 (relating to withholding statements).
					(29)Section 7211
			 (relating certain statements).
					(30)Section 7231
			 (relating to failure to obtain certain licenses).
					(31)Section 7270
			 (relating to insurance policies).
					(32)Section 7404
			 (relating to estate taxes).
					(33)Section 7404
			 (relating to income tax preparers).
					(34)Section 7408
			 (relating to income tax shelters).
					(35)Section 7409
			 (relating to 501(c)(3) organizations).
					(36)Section 7427
			 (relating to income tax preparers).
					(37)Section 7428
			 (relating to 501(c)(3) organizations).
					(38)Section 7476
			 (relating to declaratory judgments relating to retirement plans).
					(39)Section 7478
			 (relating to declaratory judgments relating to certain tax-exempt
			 obligations).
					(40)Section 7508
			 (relating to postponing time for certain actions required by the income,
			 estate, and gift tax).
					(41)Section 7509
			 (relating to Postal Service payroll taxes).
					(42)Section 7512
			 (relating to payroll taxes).
					(43)Section 7517
			 (relating to estate and gift tax evaluation).
					(44)Section 7518
			 (relating to Merchant Marine tax incentives).
					(45)Section 7519
			 (relating to taxable years).
					(46)Section 7520
			 (relating to insurance and annuity valuation tables).
					(47)Section 7523
			 (relating to reporting Federal income and outlays on Form 1040s).
					(48)Section 7611
			 (relating to church income tax exemptions and church unrelated business income
			 tax inquiries).
					(49)Section 7654
			 (relating to possessions’ income taxes).
					(50)Section 7655
			 (relating to cross references).
					(51)Section
			 7701(a)(16).
					(52)Section
			 7701(a)(19).
					(53)Section
			 7701(a)(20).
					(54)Paragraphs (32)
			 through (38) of section 7701(a).
					(55)Paragraphs (41)
			 through (46) of section 7701(a).
					(56)Section
			 7701(b).
					(57)Subsections (e)
			 through (m) of section 7701.
					(58)Section 7702
			 (relating to life insurance contracts).
					(59)Section 7702A
			 (relating to modified endowment contracts).
					(60)Section 7702B
			 (relating to long-term care insurance).
					(61)Section 7703
			 (relating to the determination of marital status).
					(62)Section 7704
			 (relating to publicly traded partnerships).
					(63)Section
			 7805.
					(64)Section
			 7851.
					(65)Section
			 7872.
					(66)Section
			 7873.
					(b)Other Conforming
			 and Technical Amendments
					(1)Section 6151 is
			 amended by striking subsection (b) and by redesignating subsection (c) as
			 subsection (b).
					(2)Section 6161 is
			 amended to read as follows:

							6161.Extension of
				time for paying taxThe
				Secretary, except as otherwise provided in this title, may extend the time for
				payment of the amount of the tax shown or required to be shown on any return,
				report, or declaration required under authority of this title for a reasonable
				period not to exceed 6 months (12 months in the case of a taxpayer who is
				abroad).
							.
					(3)Section 6211(a) is
			 amended—
						(A)by striking
			 income, estate and gift taxes imposed by subtitles A and B
			 and,
						(B)by striking
			 subtitle A or B, or, and
						(C)by striking
			 , as defined in subsection (b)(2), in paragraph (2).
						(4)Section 6211(b) is
			 amended to read as follows:

							(b)Rebate
				DefinedFor purposes of subsection (a)(2), the term
				rebate means so much of an abatement, credit, refund, or other
				payment, as was made on the ground that the tax imposed by chapter 41, 42, 43,
				or 44 was less than the excess of the amount specified in subsection (a)(1)
				over the rebates previously
				made.
							.
					(5)Section 6212(b) is
			 amended to read as follows:

							(b)Address for
				Notice of DeficiencyIn the absence of notice to the Secretary
				under section 6903 of the existence of a fiduciary relationship, notice of a
				deficiency in respect of a tax imposed by chapter 42, 43, or 44 if mailed to
				the taxpayer at his last known address, shall be sufficient for purposes of
				such chapter and this chapter even if such taxpayer is deceased, or is under a
				legal disability, or, in the case of a corporation has terminated its
				existence.
							.
					(6)Section 6302(b) is
			 amended by striking 21,.
					(7)Section 6302 is
			 amended by striking subsections (g) and (i) and by redesignating subsection (h)
			 as subsection (g).
					(8)Section 6325 is
			 amended by striking subsection (c) and by redesignating subsections (d) through
			 (h) as subsections (c) through (g), respectively.
					(9)Section 6402(d) is
			 amended by striking paragraph (3).
					(10)Section 6402 is
			 amended by striking subsection (j) and by redesignating subsection (k) as
			 subsection (j).
					(11)Section 6501(b)
			 is amended—
						(A)by striking
			 except tax imposed by chapter 3, 21, or 24, in paragraph (1),
			 and
						(B)by striking
			 paragraph (2) and by redesignation paragraphs (3) and (4) as paragraphs (2) and
			 (3), respectively.
						(12)Section 6501(c)
			 is amended by striking paragraphs (5) through (9).
					(13)Section 6501(e)
			 is amended by striking subsection (c)— and all that follows
			 through subtitle D in paragraph (3) and inserting
			 subsection (c), in the case of a return of a tax imposed under a
			 provision of subtitle B.
					(14)Section 6501 is
			 amended by striking subsection (f) through (k) and subsections (m) and (n) and
			 by redesignating subsection (1) as subsection (f).
					(15)Section 6503(a)
			 is amended—
						(A)by striking
			 paragraph (2),
						(B)by striking
			 Deficiency.— and all that
			 follows through The running and inserting
			 Deficiency.—The running,
			 and
						(C)by striking
			 income, estate, gift and.
						(16)Section 6503 is
			 amended by striking subsections (e), (f), (i), and (k) and by redesignating
			 subsections (g), (h), and (j) as subsections (e), (f), and (g),
			 respectively.
					(17)Section 6511 is
			 amended by striking subsections (d) and (g) and by redesignating subsections
			 (f) and (h) as subsections (d) and (e), respectively.
					(18)Section
			 6512(b)(1) is amended by striking of income tax for the same taxable
			 year, of gift tax for the same calendar year or calendar quarter, of estate tax
			 in respect of the taxable estate of the same decedent or.
					(19)Section 6513 is
			 amended—
						(A)by striking
			 (a) Early Return or Advance Payment of
			 Tax.—,
						(B)by striking
			 subsections (b) and (e).
						(20)Chapter 67 is
			 amended by striking subchapters A through D and inserting the following:

							6601.Interest on
				overpayments and underpayment
								(a)UnderpaymentsIf
				any amount of tax imposed by this title is not paid on or before the last date
				prescribed for payment, interest on such amount at the Federal short-term rate
				(as defined in section 511(b)) shall be paid from such last date to the date
				paid.
								(b)OverpaymentsInterest
				shall be allowed and paid upon any overpayment in respect of any internal
				revenue tax at the Federal short-term rate (as defined in section 511(b)) from
				60 days after the date of the overpayment until the date the overpayment is
				refunded.
								.
					(21)Section
			 6651(a)(1) is amended by striking subchapter A of chapter 61 (other than
			 part III thereof,.
					(22)Section 6656 is
			 amended by striking subsection (c) and by redesignating subsection (d) as
			 subsection (c).
					(23)Section 6663 is
			 amended by striking subsection (c).
					(24)Section 6664(c)
			 is amended—
						(A)by striking
			 Exception.— and all that follows through No
			 penalty and inserting Exception.—No penalty, and
						(B)by striking
			 paragraphs (2) and (3).
						(25)Chapter 72 is
			 amended by striking all matter preceding section 7011.
					(26)Section 7422 is
			 amended by striking subsections (h) and (i) and by redesignating subsections
			 (j) and (k) as subsections (h) and (i), respectively.
					(27)Section 7451 is
			 amended to read as follows:

							7451.Fee for filing
				petitionThe Tax Court is
				authorized to impose a fee in an amount not in excess of $60 to be fixed by the
				Tax Court for the filing of any petition for the redetermination of a
				deficiency.
							.
					(28)Section 7454 is
			 amended by striking subsection (b) and by redesignating subsection (c) as
			 subsection (b).
					(29)Section 7463(a)
			 is amended—
						(A)by striking
			 paragraphs (2) and (3),
						(B)by redesignating
			 paragraph (4) as paragraph (2), and
						(C)by striking
			 D in paragraph (2) (as so redesignated) and inserting
			 B.
						(30)Section 7463(c)
			 is amended by striking sections 6214(a) and and inserting
			 section.
					(31)Section 7463(c)
			 is amended by striking , to the extent that the procedures described in
			 subchapter B of chapter 63 apply.
					(32)Section 7481 is
			 amended by striking subsection (d).
					(33)Section 7608 is
			 amended by striking subtitle E each place it appears and
			 inserting subtitle C.
					(34)Section 7651 is
			 amended by striking paragraph (5).
					(35)Section
			 7701(a)(29) is amended by striking 1986 and inserting
			 2011.
					(36)Section 7809(c)
			 is amended by striking paragraphs (1) and (4) and by redesignating paragraphs
			 (2) and (3) as paragraphs (1) and (2), respectively.
					(37)Section 7871(a)
			 is amended by striking paragraphs (1) and (3) through (6) and by redesignating
			 paragraphs (2) and (7) as paragraphs (1) and (2), respectively.
					(38)Section 7871 is
			 amended by striking subsection (c) and by redesignating subsections (d) and (e)
			 as subsections (c) and (d), respectively.
					(39)Section 8021 is
			 amended by striking subsection (a) and by redesignating subsections (b) through
			 (f) as subsections (a) through (e), respectively.
					(40)Section
			 8022(a)(2)(A) is amended by striking , particularly the income
			 tax.
					(41)Section 8023 is
			 amended by striking Internal Revenue Service each place it
			 appears and inserting Department of the Treasury.
					(42)Section
			 9501(b)(2) is amended by striking subparagraph (C).
					(43)Section 9702(a)
			 is amended by striking paragraph (4).
					(44)Section 9705(a)
			 is amended by striking paragraph (4) and by redesignating paragraph (5) as
			 paragraph (4).
					(45)Section
			 9706(d)(2)(A) is amended by striking 6103 and inserting
			 605(e).
					(46)Section 9707 is
			 amended by striking subsection (f).
					(47)Section 9712(d)
			 is amended by striking paragraph (5) and by redesignating paragraph (6) as
			 paragraph (5).
					(48)Section 9803(a)
			 is amended by striking (as defined in section 414(f)).
					IIIOther
			 Matters
			301.Phase-out of
			 administration of repealed Federal taxes
				(a)AppropriationsAppropriations
			 for any expenses of the Internal Revenue Service including processing tax
			 returns for years prior to the repeal of the taxes repealed by title I of this
			 Act, revenue accounting, management, transfer of payroll and wage data to the
			 Social Security Administration for years after fiscal year 2015 shall not be
			 authorized.
				(b)RecordsFederal
			 records related to the administration of taxes repealed by title I of this Act
			 shall be destroyed by the end of fiscal year 2015, except that any records
			 necessary to calculate Social Security benefits shall be retained by the Social
			 Security Administration and any records necessary to support ongoing litigation
			 with respect to taxes owed or refunds due shall be retained until final
			 disposition of such litigation.
				(c)Conforming
			 AmendmentsSection 7802 is amended—
					(1)by striking
			 subsections (a) and (b) and by redesignating subsections (c) and (d) as
			 subsections (a) and (b),
					(2)by striking
			 Internal Revenue Service each place it appears and inserting
			 Department of the Treasury, and
					(3)by striking
			 Commissioner or Commissioner of Internal Revenue
			 each place they appear and inserting Secretary.
					(d)Effective
			 DateThe amendments made by subsection (c) shall take effect on
			 January 1, 2015.
				302.Administration
			 of other Federal taxes
				(a)In
			 GeneralSection 7801 (relating to the authority of the Department
			 of the Treasury) is amended by adding at the end the following:

						(d)Excise Tax
				BureauThere shall be in the Department of the Treasury an Excise
				Tax Bureau to administer those excise taxes not administered by the Bureau of
				Alcohol, Tobacco and Firearms.
						(e)Sales Tax
				BureauThere shall be in the Department of the Treasury a Sales
				Tax Bureau to administer the national sales tax in those States where it is
				required pursuant to section 404, and to discharge other Federal duties and
				powers relating to the national sales tax (including those required by sections
				402, 403, and 405). The Office of Revenue Allocation shall be within the Sales
				Tax
				Bureau.
						.
				(b)Assistant
			 General CounselsSection 7801(b)(2) is amended to read as
			 follows:

						(2)Assistant
				general counselsThe Secretary of the Treasury may appoint,
				without regard to the provisions of the civil service laws, and fix the duties
				of not more than 5 assistant general
				counsels.
						.
				303.Sales tax
			 inclusive Social Security benefits indexationSubparagraph (D) of section 215(i)(1) of the
			 Social Security Act (42 U.S.C.
			 415(i)(1)) (relating to cost-of-living increases in Social Security benefits)
			 is amended to read as follows:

					(D)(i)the term CPI
				increase percentage, with respect to a base quarter or cost-of-living
				quarter in any calendar year, means the percentage (rounded to the nearest
				one-tenth of 1 percent) by which the Consumer Price Index for that quarter (as
				prepared by the Department of Labor) exceeds such index for the most recent
				prior calendar quarter which was a base quarter under subparagraph (A)(ii) or,
				if later, the most recent cost-of-living computation quarter under subparagraph
				(B);
						(ii)if the Consumer Price Index (as so
				prepared) does not include the national sales tax paid, then the term CPI
				increase percentage, with respect to a base quarter or cost-of-living
				quarter in any calendar year, means the percentage (rounded to the nearest
				one-tenth of 1 percent) by which the product of—
							(I)the Consumer Price Index for that
				quarter (as so prepared), and
							(II)the national sales tax
				factor,
							exceeds such index for the most recent prior calendar
				quarter which was a base quarter under subparagraph (A)(ii) or, if later, the
				most recent cost of living computation quarter under subparagraph (B);
				and(iii)the national sales tax factor is
				equal to 1 plus the quotient that is—
							(I)the sales tax rate imposed by
				section 101 of the Internal Revenue Code of 2011, divided by
							(II)the quantity that is 1 minus such
				sales tax
				rate.
							.
			IVSunset of Sales
			 Tax if Sixteenth Amendment not Repealed
			401.Elimination of
			 sales tax if Sixteenth Amendment not repealedIf the Sixteenth Amendment to the
			 Constitution of the United States is not repealed before the end of the 7-year
			 period beginning on the date of the enactment of this Act, then all provisions
			 of, and amendments made by, this Act shall not apply to any use or consumption
			 in any year beginning after December 31 of the calendar year in which or with
			 which such period ends, except that the Sales Tax Bureau of the Department of
			 the Treasury shall not be terminated until 6 months after such December
			 31.