26 USC 6416 - Certain taxes on sales and services

U.S Code last checked for updates: Nov 22, 2024

§ 6416.

Certain taxes on sales and services

(a)

Condition to allowance

(1)

General rule

No credit or refund of any overpayment of tax imposed by chapter 31 (relating to retail excise taxes), or chapter 32 (manufacturers taxes), shall be allowed or made unless the person who paid the tax establishes, under regulations prescribed by the Secretary, that he—

(A)

has not included the tax in the price of the article with respect to which it was imposed and has not collected the amount of the tax from the person who purchased such article;

(B)

has repaid the amount of the tax to the ultimate purchaser of the article;

(C)

in the case of an overpayment under subsection (b)(2) of this section—

(i)

has repaid or agreed to repay the amount of the tax to the ultimate vendor of the article, or

(ii)

has obtained the written consent of such ultimate vendor to the allowance of the credit or the making of the refund; or

(D)

has filed with the Secretary the written consent of the person referred to in subparagraph (B) to the allowance of the credit or the making of the refund.

(2)

Exceptions

This subsection shall not apply to—

(A)

the tax imposed by section 4041 (relating to tax on special fuels) on the use of any liquid, and

(B)

an overpayment of tax under paragraph (1), (3)(A), (4), (5), or (6) of subsection (b) of this section.

(3)

Special rule

(4)

Registered ultimate vendor or credit card issuer to administer credits and refunds of gasoline tax

(A)

In general

(B)

Credit card issuer

For purposes of this subsection, if the purchase of gasoline described in subparagraph (A) (determined without regard to the registration status of the ultimate vendor) is made by means of a credit card issued to the ultimate purchaser, paragraph (1) shall not apply and the person extending the credit to the ultimate purchaser shall be treated as the person (and the only person) who paid the tax, but only if such person—

(i)

is registered under section 4101,

(ii)

has established, under regulations prescribed by the Secretary, that such person—

(I)

has not collected the amount of the tax from the person who purchased such article, or

(II)

has obtained the written consent from the ultimate purchaser to the allowance of the credit or refund, and

(iii)

has so established that such person—

(I)

has repaid or agreed to repay the amount of the tax to the ultimate vendor,

(II)

has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or

(III)

has otherwise made arrangements which directly or indirectly provides the ultimate vendor with reimbursement of such tax.

If clause (i), (ii), or (iii) is not met by such person extending the credit to the ultimate purchaser, then such person shall collect an amount equal to the tax from the ultimate purchaser and only such ultimate purchaser may claim such credit or payment.

(C)

Timing of claims

(b)

Special cases in which tax payments considered overpayments

Under regulations prescribed by the Secretary, credit or refund (without interest) shall be allowed or made in respect of the overpayments determined under the following paragraphs:

(1)

Price readjustments

(A)

In general

(B)

Further manufacture

(C)

Adjustment of tire price

(2)

Specified uses and resales

The tax paid under chapter 32 (or under subsection (a) or (d) of section 4041 in respect of sales or under section 4051) in respect of any article shall be deemed to be an overpayment if such article was, by any person—

(A)

exported;

(B)

used or sold for use as supplies for vessels or aircraft;

(C)

sold to a State or local government for the exclusive use of a State or local government;

(D)

sold to a nonprofit educational organization for its exclusive use;

(E)

sold to a qualified blood collector organization (as defined in section 7701(a)(49)) for such organization’s exclusive use in the collection, storage, or transportation of blood;

(F)

in the case of any tire taxable under section 4071(a), sold to any person for use as described in section 4221(e)(3); or

(G)

in the case of gasoline, used or sold for use in the production of special fuels referred to in section 4041.

Subparagraphs (C), (D), and (E) shall not apply in the case of any tax paid under section 4064. In the case of the tax imposed by section 4131, subparagraphs (B), (C), (D), and (E) shall not apply and subparagraph (A) shall apply only if the use of the exported vaccine meets such requirements as the Secretary may by regulations prescribe. This paragraph shall not apply in the case of any tax imposed under section 4041(a)(1) or 4081 on diesel fuel or kerosene and any tax paid under section 4121. Subparagraphs (C) and (D) shall not apply in the case of any tax imposed on gasoline under section 4081 if the requirements of subsection (a)(4) are not met. In the case of taxes imposed by subchapter C or D of chapter 32, subparagraph (E) shall not apply.

(3)

Tax-paid articles used for further manufacture, etc.

If the tax imposed by chapter 32 has been paid with respect to the sale of any article (other than coal taxable under section 4121) by the manufacturer, producer, or importer thereof and such article is sold to a subsequent manufacturer or producer before being used, such tax shall be deemed to be an overpayment by such subsequent manufacturer or producer if—

(A)

in the case of any article other than any fuel taxable under section 4081, such article is used by the subsequent manufacturer or producer as material in the manufacture or production of, or as a component part of—

(i)

another article taxable under chapter 32, or

(ii)

an automobile bus chassis or an automobile bus body,

manufactured or produced by him; or

(B)

in the case of any fuel taxable under section 4081, such fuel is used by the subsequent manufacturer or producer, for nonfuel purposes, as a material in the manufacture or production of any other article manufactured or produced by him.

(4)

Tires

If—

(A)

the tax imposed by section 4071 has been paid with respect to the sale of any tire by the manufacturer, producer, or importer thereof, and

(B)

such tire is sold by any person on or in connection with, or with the sale of, any other article, such tax shall be deemed to be an overpayment by such person if such other article is—

(i)

an automobile bus chassis or an automobile bus body,

(ii)

by such person exported, sold to a State or local government for the exclusive use of a State or local government, sold to a nonprofit educational organization for its exclusive use, or used or sold for use as supplies for vessels or aircraft, or

(iii)

sold to a qualified blood collector organization for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood.

(5)

Return of certain installment accounts

If—

(A)

tax was paid under section 4216(d)(1) in respect of any installment account,

(B)

such account is, under the agreement under which the account was sold, returned to the person who sold such account, and

(C)

the consideration is readjusted as provided in such agreement,

the part of the tax paid under section 4216(d)(1) allocable to the part of the consideration repaid or credited to the purchaser of such account shall be deemed to be an overpayment.

(6)

Truck chassis, bodies, and semitrailers used for further manufacture

If—

(A)

the tax imposed by section 4051 has been paid with respect to the sale of any article, and

(B)

before any other use, such article is by any person used as a component part of another article taxable under section 4051 manufactured or produced by him,

such tax shall be deemed to be an overpayment by such person. For purposes of the preceding sentence, an article shall be treated as having been used as a component part of another article if, had it not been broken or rendered useless in the manufacture or production of such other article, it would have been so used.

This subsection shall apply in respect of an article only if the exportation or use referred to in the applicable provision of this subsection occurs before any other use, or, in the case of a sale or resale, the use referred to in the applicable provision of this subsection is to occur before any other use.

(c)

Refund to exporter or shipper

(d)

Credit on returns

(e)

Accounting procedures for like articles

Under regulations prescribed by the Secretary, if any person uses or resells like articles, then for purposes of this section the manufacturer, producer, or importer of any such article may be identified, and the amount of tax paid under chapter 32 in respect of such article may be determined—

(1)

on a first-in-first-out basis,

(2)

on a last-in-first-out basis, or

(3)

in accordance with any other consistent method approved by the Secretary.

(f)

Meaning of terms

(Aug. 16, 1954, ch. 736, 68A Stat. 798; Aug. 11, 1955, ch. 793, § 2, 69 Stat. 676; Aug. 11, 1955, ch. 805, §§ 1(h), (i), 2(b), 69 Stat. 690; Apr. 2, 1956, ch. 160, § 2(b)(1), 70 Stat. 90; June 29, 1956, ch. 462, title II, § 208(b), 70 Stat. 393; Pub. L. 85–475, § 4(b)(5), (6), June 30, 1958, 72 Stat. 260; Pub. L. 85–859, title I, § 163(a), (c), Sept. 2, 1958, 72 Stat. 1306, 1311; Pub. L. 86–342, title II, § 201(d)(1), Sept. 21, 1959, 73 Stat. 614; Pub. L. 86–418, § 3, Apr. 8, 1960, 74 Stat. 38; Pub. L. 86–781, § 2, Sept. 14, 1960, 74 Stat. 1018; Pub. L. 87–61, title II, § 205(c), (d), June 29, 1961, 75 Stat. 126; Pub. L. 87–508, § 5(c)(3), June 28, 1962, 76 Stat. 119; Pub. L. 89–44, title II, § 207(c), title VI, § 601(c), title VIII, § 801(d)(2), June 21, 1965, 79 Stat. 140, 153, 158; Pub. L. 91–258, title II, §§ 205(b)(3), (4), 207(d)(4)–(7), May 21, 1970, 84 Stat. 242, 248, 249; Pub. L. 91–614, title III, § 302(a), (b), Dec. 31, 1970, 84 Stat. 1845; Pub. L. 92–178, title IV, § 401(a)(3)(C), (g)(6), Dec. 10, 1971, 85 Stat. 531, 534; Pub. L. 94–455, title XIX, §§ 1904(b)(1), (2), 1906(a)(24)(A), (B)(i), (b)(13)(A), title XXI, § 2108(a), Oct. 4, 1976, 90 Stat. 1815, 1827, 1834, 1904; Pub. L. 95–227, § 2(b)(4), Feb. 10, 1978, 92 Stat. 12; Pub. L. 95–618, title II, §§ 201(c)(3), 232(b), 233(c)(3), Nov. 9, 1978, 92 Stat. 3184, 3189, 3192; Pub. L. 96–222, title I, § 108(c)(2)(A), (B), (3), (4), Apr. 1, 1980, 94 Stat. 227; Pub. L. 96–596, § 4(c)(1), Dec. 24, 1980, 94 Stat. 3475; Pub. L. 96–598, § 1(a), (b), Dec. 24, 1980, 94 Stat. 3485, 3486; Pub. L. 97–424, title V, §§ 511(g)(2)(A), 512(b)(2)(C), (D), 515(b)(4), Jan. 6, 1983, 96 Stat. 2173, 2177, 2181; Pub. L. 98–369, div. A, title VII, §§ 734(b), (j), 735(c)(13), July 18, 1984, 98 Stat. 978, 980, 984; Pub. L. 99–499, title V, § 521(d)(5), Oct. 17, 1986, 100 Stat. 1780; Pub. L. 100–203, title IX, § 9201(b)(2), title X, § 10502(d)(6)–(8), Dec. 22, 1987, 101 Stat. 1330–330, 1330–444; Pub. L. 100–647, title II, § 2001(d)(1)(B), title VI, § 6102(a), Nov. 10, 1988, 102 Stat. 3594, 3710; Pub. L. 101–508, title XI, § 11212(d)(2), Nov. 5, 1990, 104 Stat. 1388–432; Pub. L. 103–66, title XIII, § 13242(d)(17)–(19), Aug. 10, 1993, 107 Stat. 524; Pub. L. 104–188, title I, § 1702(b)(3), Aug. 20, 1996, 110 Stat. 1868; Pub. L. 105–34, title IX, § 905(a), title X, § 1032(e)(6), title XIV, § 1436(b), Aug. 5, 1997, 111 Stat. 874, 935, 1053; Pub. L. 105–206, title VI, § 6023(23), July 22, 1998, 112 Stat. 826; Pub. L. 108–357, title VIII, §§ 853(d)(2)(G)–(I), 865(a), Oct. 22, 2004, 118 Stat. 1613, 1621; ; Pub. L. 109–59, title XI, § 11163(b), Aug. 10, 2005, 119 Stat. 1973; Pub. L. 109–280, title XII, § 1207(e), Aug. 17, 2006, 120 Stat. 1071; Pub. L. 110–172, § 11(d)(1), Dec. 29, 2007, 121 Stat. 2489; Pub. L. 111–152, title I, § 1405(b)(2), Mar. 30, 2010, 124 Stat. 1065; Pub. L. 116–94, div. N, title I, § 501(b)(2), Dec. 20, 2019, 133 Stat. 3118.)

cite as: 26 USC 6416