[Code of Federal Regulations]

[Title 26, Volume 16]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 26CFR48.4073-3]



[Page 106-107]

 

                       TITLE 26--INTERNAL REVENUE

 

    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 

                               (CONTINUED)

 

PART 48_MANUFACTURERS AND RETAILERS EXCISE TAXES--Table of Contents

 

 Subpart H_Motor Vehicles, Tires, Tubes, Tread Rubber, and Taxable Fuel

 

Sec.  48.4073-3  Exemption of tread rubber used for recapping nonhighway 

tires.



    (a) Sold direct by manufacturer for nontaxable use. The tax does not 

apply to the sale of tread rubber by the manufacturer to any person for 

use by that person otherwise than in the recapping or retreading of 

tires of the type used on highway vehicles. In determining whether tread 

rubber is sold for a taxable or nontaxable use, the type of vehicle on 

which the recapped or retreaded tire is to be used, or the actual or 

intended use of the recapped or retreaded tire, is immaterial. The 

controlling factor is whether the tire resulting from the recapping or 

retreading is of a type that is used otherwise than on a highway 

vehicle. For definition of ``tires of the type used on highway 

vehicles'', see paragraph (c) of Sec.  48.4072-1.

    (b) Sales for resale for nontaxable use. No sale of tread rubber may 

be made tax free for resale even though it is known at the time of the 

sale that the tread rubber will be resold for use otherwise than in the 

recapping or retreading of tires of the type used on highway vehicles. 

However, where the tread rubber is resold for such use, the manufacturer 

who paid the tax on a sale of the tread rubber may secure a refund or 

credit in accordance with the provisions of section 6416(b)(2) and Sec.  

48.6416(b)-2.

    (c) Evidence required to establish exemption. (1) To establish the 

right to sell tread rubber tax free under section 4073(c), the 

manufacturer must obtain from the purchaser and retain in its possession 

a properly executed exemption certificate.

    (2) Where only occasional sales of tread rubber for exempt use are 

made to a purchaser, a separate exemption certificate should be 

furnished for each



[[Page 107]]



order. However, where sales are regularly and frequently made to a 

purchaser for exempt use, a certificate covering all purchases during 

the period not to exceed 12 calendar quarters is acceptable. The 

certificates and proper records of invoices, orders, etc., relative to 

tax-free sales must be kept for inspection by the district director as 

provided in section 6001 and the regulations in Subpart Q.

    (d) Acceptable form of exemption certificate. The following form of 

exemption certificate is acceptable for the purposes of this section and 

must be adhered to in substance:



                          Exemption Certificate



    (For use by persons who purchase tread rubber from the manufacturer, 

producer, or importer thereof for use otherwise than in recapping or 

retreading tires of the type used on highway vehicles (section 4073(c) 

of the Internal Revenue Code).)



(Date) ------------------------, 19----



    I, the undersigned, certify that I am the purchaser, or the (Title) 

------ of (Name of purchaser if other than the undersigned) ---------- 

who is the purchaser of: ---- The tread rubber specified in the 

accompanying order or contract, or ---- All tread rubber specified in 

contracts or orders entered into or placed with (Name of seller) ------ 

for the period commencing ------ and ending ------ (period not to exceed 

12 calendar quarters), and that such tread rubber will not be used in 

the recapping or retreading of tires of the type used on highway 

vehicles, but will be used for the following purposes:



________________________________________________________________________

________________________________________________________________________

________________________________________________________________________



    The undersigned understands that if the tread rubber is used for the 

recapping or retreading of tires of the type used on highway vehicles, 

or is sold or otherwise disposed of, such fact must be promptly reported 

to the manufacturer. The undersigned also understands that the 

fraudulent use of this certificate for the purpose of securing this 

exemption will subject the undersigned or any other party making such 

fraudulent use to a fine of not more than $10,000, or to imprisonment 

for not more than 5 years, or both, together with costs of prosecution. 

The purchaser also understands that the purchaser must be prepared to 

establish by satisfactory evidence the purpose for which the tread 

rubber was used.



(Signature)_____________________________________________________________

(Address)_______________________________________________________________



    (e) Exemption certificate not obtained prior to filing of 

manufacturer's excise tax return. If the sale is otherwise exempt but 

the exemption certificate is not obtained prior to the time the 

manufacturer files a return covering taxes due for the period during 

which the sale was made, the manufacturer must include the tax on the 

sale in its return for that period. However, if the certificate is later 

obtained, a claim for refund of the tax paid on the sale may be filed, 

or a credit for the amount may be taken upon a subsequent return, as 

provided by section 6416(b)(2) and Sec.  48.6416(b)-2.



(Secs. 4071(b), 4071(c), 4073(c), and 7805, Internal Revenue Code of 

1954. (80 Stat. 331, 26 U.S.C. 4071(b); 68A Stat. 482, 26 U.S.C. 

4071(c); 70 Stat. 389, 26 U.S.C. 4073(c); 68A Stat. 917, 26 U.S.C. 

7805))



[T.D. 7809, 47 FR 6007, Feb. 10, 1982]