736, 68A Stat. 483; Aug. 11, 1955, ch. 793, § 1(a), 69 Stat. 676; June 21, 1965, Pub. L. 89-44, title II, § 202 (a), 79 Stat. 137.)

(g) Certain trucks incorporating used components

For purposes of the tax imposed by section 4061 (a) (1) (relating to trucks, buses, etc.), in determining the price for which an article is sold, the value of any component of such article shall be excluded from the price, if

(1) such component is furnished by the first user of such article, and (2) such component has been used prior to such furnishing. (*** June 21, 1965, Pub. L. 89-44, sec. 801 (b), 79 Stat. 158.)

Sec. 4221. Certain tax-free sales.

(d) Definitions

For purposes of this section—

(6) Use in further manufacture.

An article shall be treated as sold for use in further manufacture if—

(A) such article (other than an article referred to in subparagraph (B)) is sold for use by the purchaser as material in the manufacture or production of, or as a component part of, another article taxable under this chapter to be manufactured or produced by him;

(B) in the case of a part or accessory taxable under section 4061 (b), such article is sold for use by the purchaser as material in the manufacture or production of, or as a component part of, another article to be manufactured or produced by him; or

(C) in the case of gasoline taxable under section 4081, such gasoline is sold for use by the purchaser, for nonfuel purposes, as a material in the manufacture or production of another article to be manufactured or produced by him.

For purposes of subparagraph (B), the rebuilding of a part or accessory which is exempt from tax under section 4063 (c) shall not constitute the manufacture or production of such part or accessory.

(e) Special rules

(2) TIRES AND TUBES.—

(A) Tax-free sales.-Under regulations prescribed by the Secretary or his delegate, no tax shall be imposed under section 4071 on the sale by the manufacturer of a tire or inner tube if—

(i) such tire or tube is sold for use by the purchaser for sale on or in connection with the sale of another article manufactured or produced by such purchaser; and

(ii) such other article is to be sold by such purchaser in a sale which either will satisfy the requirements of paragraph (2), (3), (4), or (5) of subsection (a) for a tax-free sale, or would satisfy such requirements but for the fact that such other article is not subject to tax under this chapter.

(B) Proof. Where a tire or tube has been sold free of tax under this paragraph, this paragraph shall cease to apply unless, within the 6-month period which begins on the date of the sale by him (or, if earlier, on the date of the shipment by him), the manufacturer of such tire or tube receives proof that the other article referred to in clause (ii) of subparagraph (A) has been sold in a manner which satisfies the requirements of such clause (ii) (including in the case of a sale for export, proof of export of such other article).

(C) Subsection (a) (1) does not apply.-Paragraph (1) of subsection (a) shall not apply with respect to the tax imposed under section 4071 on the sale of a tire, or inner tube.

(4) BICYCLE TIRES OR TUBES SOLD TO BICYCLE MANUFACTURER.(A) In general.—Under regulations prescribed by the Secretary or his delegate, no tax shall be imposed under section 4071 on the sale of a bicycle tire (or an inner tube for such a tire) by the manufacturer thereof if such tire or tube is sold for use by the purchaser as material in the manufacture or production of, or as a component part of, a bicycle (other than a rebuilt or reconditioned bicycle).

(B) Bicycle tire defined.-As used in this paragraph the term "bicycle tire" means a tire, composed of rubber in combination with fabric or other reinforcing element, which is not more than 28 inches in outer diameter and not more than 24 inches in cross section and which is primarily designed or adapted for use on bicycles.

(C) Proof. Where a bicycle tire or tube has been sold free of tax under this paragraph, this paragraph shall cease to apply unless, within the 6-month period which begins on the date of the sale by him (or, if earlier, on the date of shipment by him), the manufacturer of such bicycle tire or tube receives proof that the tire or tube has been used in the manner described in subparagraph (A).

(5) SCHOOL BUSES.-Under regulations prescribed by the Secretary or his delegate, the tax imposed by section 4061 (a) shall not apply to a bus sold to any person for use exclusively in transporting students and employees of schools operated by State or local governments or by nonprofit educational organizations. For purposes of this paragraph,

incidental use of a bus in providing transportation for a State or local government or a nonprofit organization described in section 501(c) which is exempt from tax under section 501 (a) shall be disregarded. (Added Pub. L. 85–859, Title I, § 119(a), Sept. 2, 1958, 72 Stat. 1282, and amended Pub. L. 86-70, § 22(a), June 25, 1959, 73 Stat. 146; Pub. L. 86344, § 2(b), Sept. 21, 1959, 73 Stat. 617; Pub. L. 86-418, § 1, Apr. 8, 1960, 74 Stat. 38; Pub. L. 86-624, § 18(e), July 12, 1960, 74 Stat. 416; Pub. L. 87-61, Title II, § 205 (a), June 29, 1961, 75 Stat. 126; Pub. L. 89-44, Title II, § 208(d), Title VIII, § 801 (c), (d)(1), June 21, 1965, 79 Stat. 141, 158.)

Sec. 4226. Floor stocks taxes.

(a) In general

(1) 1956 TAX ON TRUCKS, TRUCK TRAILERS, BUSES, ETC.-On any article subject to tax under section 4061 (a) (1) (relating to tax on trucks, truck trailers, buses, etc.) which, on July 1, 1956, is held by a dealer for sale, there is hereby imposed a floor stocks tax at the rate of 2 percent of the price for which the article was purchased by such dealer. If the price for which the article was sold by the manufacturer, producer, or importer is established to the satisfaction of the Secretary or his delegate, then in lieu of the amount specified in the preceding sentence, the tax imposed by this paragraph shall be at the rate of 2 percent of the price for which the article was sold by the manufacturer, producer, or importer.

(2) 1956 TAX ON TIRES OF THE TYPE USED ON HIGHWAY VEHICLES.On tires subject to tax under section 4071 (a) (1) (as amended by the Highway Revenue Act of 1956) which, on July 1, 1956, are held— (A) by a dealer for sale,

(B) for sale on, or in connection with, other articles held by the manufacturer, producer, or importer of such other articles, or (C) for use in the manufacture or production of other articles, there is hereby imposed a floor stocks tax at the rate of 3 cents a pound. The tax imposed by this paragraph shall not apply to any tire which is held for sale by the manufacturer, producer, or importer of such tire or which will be subject under section 4218(a) (2) or 4219 to the manufacturers excise tax on tires.

(3) 1956 TAX ON TREAD RUBBER.—On tread rubber subject to tax under section 4071 (a) (4) (as amended by the Highway Revenue Act of 1956) which, on July 1, 1956, is held by a dealer, there is hereby imposed a floor stocks tax at the rate of 3 cents a pound. The tax imposed by this paragraph shall not apply in the case of any person if such person establishes, to the satisfaction of the Secretary or his delegate, that all tread rubber held by him on July 1, 1956, will be used otherwise than in the recapping or retreading of tires of the type used on highway vehicles (as defined in section 4072 (c)).

(4) 1956 TAX ON GASOLINE.-On gasoline subject to tax under section 4081 which, on July 1, 1956, is held by a dealer for sale, there is hereby imposed a floor stocks tax at the rate of 1 cent a gallon. The tax imposed by this paragraph shall not apply to gasoline in retail stocks held at the place where intended to be sold at retail, nor to gasoline held for sale by a producer or importer of gasoline.

(5) 1959 TAX ON GASOLINE.-On gasoline subject to tax under section 4081 which on, October 1, 1959, is held by a dealer for sale, there is hereby imposed a floor stocks tax at the rate of 1 cent a gallon. The tax imposed by this paragraph shall not apply to gasoline in retail stocks held at the place where intended to be sold at retail, nor to gasoline held for sale by a producer or importer of gasoline.

(6) 1961 TAXES ON CERTAIN TIRES AND INNER TUBES.-On tires subject to tax under section 4071(a) (1), and on inner tubes subject to tax under section 4071 (a) (3), which, on July 1, 1961, are held—

(A) by a dealer for sale,

(B) for sale on, or in connection with, other articles held by the manufacturer, producer, or importer of such other articles, or

(C) for use in the manufacture or production of other articles, there is hereby imposed a floor stocks tax at the rate of 2 cents a pound in the case of such tires, and a floor stocks tax at the rate of 1 cent a pound in the case of such inner tubes. The taxes imposed by this paragraph shall not apply to any tire or inner tube which is held for sale by the manufacturer, producer, or importer of such tire or tube, or which will be subject under section 4218 (b) or 4219 to the manufacturers excise tax on tires or inner tubes. The tax on inner tubes imposed by this paragraph shall not apply to inner tubes for bicycle tires (as defined in section 4221 (e) (4) (B)).

(7) 1961 TAX ON TREAD RUBBER.—On tread rubber subject to tax under section 4071(a)(4) which, on July 1, 1961, is held by a dealer, there is hereby imposed a floor stocks tax at the rate of 2 cents a pound. The tax imposed by this paragraph shall not apply in the case of any person if such person establishes, to the satisfaction of the Secretary or his delegate, that all tread rubber held by him on July 1, 1961, will be used otherwise than in the recapping or retreading of tires of the type used on highway vehicles (as defined in section 4072(c)).

(b) Overpayment of floor stocks taxes

Section 6416 shall apply in respect of the floor stocks taxes imposed by this section, so as to entitle, subject to all provisions of section 6416, any person paying such floor stocks taxes to a credit or refund thereof for any of the reasons specified in section 6416.

(c) Meaning of terms

For purposes of subsection (a), the terms "dealer" and "held by a dealer" have the meaning assigned to them by section 6412(a) (4).

(d) Due date of taxes

The taxes imposed by subsection (a) shall be paid at such time after September 30, 1956, as may be prescribed by the Secretary or his delegate; except that the tax imposed by paragraph (5) shall be paid at such time after December 31, 1959, as may be prescribed by the Secretary or his delegate, and except that the taxes imposed by paragraphs (6) and (7) shall be paid at such time after September 30, 1961, as may be prescribed by the Secretary or his delegate.

(e) Tax on certain tires and tubes

On any tire or inner tube which, on the first day of the first calendar quarter which begins more than 20 days after the date of the enactment of this subsection, is held at a retail store or retail outlet of the manufacturer, producer, or importer of such tire or tube, he shall be liable for tax under section 4071 (a) in the same manner is if such tire or inner tube had been sold by him on such first day. This subsection shall not apply to an article in respect of which tax has been imposed by section 4071 of the Internal Revenue Code of 1954. Such section 4071 shall not apply to an article in respect of which tax has been imposed by this subsection. (Added June 29, 1956, c. 462, Title II, § 207(a), 70 Stat. 391, and amended Sept. 21, 1959, Pub. L. 86–342, Title II, § 201 (c) (1)-(3), 73 Stat. 614; June 29, 1961, Pub. L. 87–61, Title II, § 206(a), (b), 75 Stat. 127; Aug. 1, 1966, Pub. L. 89–523, § 2, 80 Stat. 331.)