[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR53.136]

[Page 1014-1015]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 53_MANUFACTURERS EXCISE TAXES_FIREARMS AND AMMUNITION--Table of 
Contents
 
                Subpart K_Exemptions, Registration, Etc.
 
Sec. 53.136  Tax-free sales of articles to nonprofit educational 
organizations.

    (a) In general. An article subject to tax under chapter 32 of the 
Code may be sold tax free by the manufacturer, pursuant to section 
4221(a)(5) of the Code and this section, to a nonprofit educational 
organization for its exclusive use. See paragraph (b) of this section 
for the meaning of the term ``nonprofit educational organization''. An 
article may be sold tax free by the manufacturer under this paragraph 
only in those cases where the sale of an article by the manufacturer is 
made directly to a nonprofit educational organization for its exclusive 
use. Accordingly, no sale may be made tax free to a dealer for resale to 
a nonprofit educational organization for its exclusive use even though 
it is known at the time of sale by the manufacturer that the article 
will be so resold. See section 6416(b)(2)(D) of the Code, and paragraph 
(e) of Sec. 53.178, for the circumstances under which credit or refund 
of tax is available where tax-paid articles are sold for the exclusive 
use of a nonprofit educational organization.
    (b) Nonprofit educational organization. The term ``nonprofit 
educational organization'' means an organization described in section 
170(b)(1)(A)(ii) of the Code that is exempt from income tax under 
section 501(a) of the Code. Section 170(b)(1)(A)(ii) describes an 
``educational organization'' as one that normally maintains a regular 
faculty and curriculum and normally has a regularly enrolled body of 
pupils or students in attendance at the place where its educational 
activities are regularly carried on. The term also includes a school 
operated as an activity of an organization described in section 
501(c)(3) of the Code which is exempt from income tax under section 
501(a) of the Code, provided the primary function of such school is the 
presentation of formal instruction and provided such school normally 
maintains a regular faculty and curriculum and normally has a regularly 
enrolled body of pupils or students in attendance at the place where its 
educational activities are regularly carried on.
    (c) Evidence required in support of tax-free sales to nonprofit 
educational organizations. Every nonprofit educational organization 
purchasing tax free under section 4221(a)(5) of the Code must furnish 
the following information to the seller:
    (1) The tax exempt purpose for which the article or articles are 
being purchased, and
    (2) Its registration number. Such information must be in writing and 
may

[[Page 1015]]

be noted on the purchase order or other document furnished by the 
purchaser to the seller in connection with each sale ``except that a 
single notification containing the information described in this 
paragraph may cover all sales by the seller to the purchaser made during 
a designated period not to exceed 12 successive calendar quarters.''. 
See paragraph (c) of Sec. 53.131 for the evidence required to establish 
exemption.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-447, 66 
FR 19088, Apr. 13, 2001]