with respect to inner tubes for bicycle tires (as defined in section 4221(e) (4) (B)).

(4) DEFINITIONS. For purposes of this section

(A) The term "dealer" includes a wholesaler, jobber, distributor, or retailer, or, in the case of tread rubber subject to tax under section 4071(a) (4), includes any person (other than the manufacturer, producer, or importer thereof) who holds such tread rubber for sale or use.

(B) An article shall be considered as "held by a dealer" if title thereto has passed to such dealer (whether or not delivery to him has been made), and if for purposes of consumption title to such article or possession thereof has not at any time been transferred to any person other than a dealer.

(b) Limitation on eligibility for credit or refund

No manufacturer, producer, or importer shall be entitled to credit or refund under subsection (a) unless he has in his possession such evidence of the inventories with respect to which the credit or refund is claimed as may be required by regulations prescribed under this section.

(c) Other laws applicable

All provisions of law, including penalties, applicable in respect of the taxes imposed by sections 4061, 4071, and 4081 shall, insofar as applicable and not inconsistent with subsections (a) and (b) of this section, apply in respect of the credits and refunds provided for in subsection (a) to the same extent as if such credits or refunds constituted overpayments of such taxes. (Aug. 16, 1954, ch. 736, 68A Stat. 795; Mar. 30, 1955, ch. 18, § 3(b) (4), 69 Stat. 15; Mar. 29, 1956, ch. 115, § 3(b) (4), 70 Stat. 67; May 29, 1956, ch. 342, § 19, 70 Stat. 221; June 29, 1956, ch. 462, title II, § 208(a), 70 Stat. 392; Mar. 29, 1957, Pub. L. 85-12, § 3(b) (4), 71 Stat. 10; June 30, 1958, Pub. L. 85-475, § 3(b)(4), 72 Stat. 260; Sept. 2, 1958, Pub. L. 85–859, title I, § 162(a), 72 Stat. 1306; June 30, 1959, Pub. L. 86–75, § 3(b) (3), 73 Stat. 158; Sept. 21, 1959, Pub. L. 86-342, title II, § 201 (c) (4), 73 Stat. 614; June 30, 1960, Pub. L. 86-564, title II, § 202 (b) (3), 74 Stat. 291; July 6, 1960, Pub. L. 86-592, § 2, 74 Stat. 330; Mar. 31, 1961, Pub. L. 87-15, § 2(b), 75 Stat. 40; June 29, 1961, Pub. L. 87-61, title II, § 206 (c), (d), 75 Stat. 127; June 30, 1961, Pub. L. 87-72, § 3(b) (3), 75 Stat. 193; May 24, 1962, Pub. L. 87-456, title III, § 302 (d), 76 Stat. 77; June 28, 1962, Pub. L. 87-508, § 3(b) (3), 76 Stat. 114; July 13, 1962, Pub. L. 87-535, § 18(b), 76 Stat. 166; June 29, 1963, Pub. L. 88–52, § 3(b) (1) (C), 77 Stat. 72; June 30, 1964, Pub. L. 88–348, § 2(b) (1) (C), 78 Stat. 237; June 21, 1965, Pub. L. 89-44, title II, § 209 (a), (d), 79 Stat. 141, 144; Mar. 15, 1966, Pub. L. 89368, title II, § 201 (b), 80 Stat. 66; Apr. 12, 1968, Pub. L. 90-285, § 1 (a) (2), 82 Stat. 92; June 28, 1968, Pub. L. 90-364, title I, § 105 (a) (2), 82 Stat. 265; Dec. 30, 1969, Pub. L. 91-172, title VII, § 702 (a) (2), 83 Stat. 660; Dec. 31,

1970, Pub. L. 91-605, title III, § 303 (b), 84 Stat. 1744; Dec. 31, 1970, Pub. L. 92-614, title II, § 201 (a) (2), 84 Stat. 1843; Dec. 10, 1971, Pub. L. 92178, Title IV, § 401 (g) (5), 85 Stat. 533; May 5, 1976, Pub. L. 94–280, Title III, § 303(b) (1) and (2), 90 Stat. 457.)

(1) GENERAL RULE.-No credit or refund of any overpayment of tax imposed by chapter 31 (retailers 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 or his delegate, that he—

(A) has not included the tax in the price of the article with respect to which it has 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), (b) (3) (C), or (b) (4) 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 or his delegate 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) or (B), or (5) of subsection (b) of this section.

(3) SPECIAL RULES. For purposes of this subsection—

(A), (B). Repealed. Pub. L. 89-44, Title VI, § 601(c)(6), June 21, 1965, 79 Stat. 153;

(C) in any case in which the Secretary or his delegate determines that an article is not taxable, the term "ultimate purchaser" (when used in paragraph (1) (B) of this subsection) includes a wholesaler, jobber, distributor, or retailer who, on the 15th day after the date of such determination, holds such article for sale; but only if claim for credit or refund by reason of this subparagraph is filed on or before the day for filing the return with respect to the taxes imposed under chapter 32 for the first period which begins more than 60 days after the date of such determination; and

(D) in applying paragraph (1)(C) to any overpayment under paragraph (2)(F), (3) (C), or (4) of subsection (b), the term "ultimate vendor" means the ultimate vendor of the other article.

(b) Special cases in which tax payments considered overpayments

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

(2) SPECIFIED USES AND RESALES.-The tax paid under chapter 32 (or under section 4041 (a) (1) or (b) (1)) in respect of any article shall be deemed to be an overpayment if such article was, by any

person

(A) exported (except in any case to which subsection (g) applies);

(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) Repealed. Pub. L. 91-614, Title III, § 302 (b), Dec. 31, 1970, 84 Stat. 1845;

(F) in the case of a tire or inner tube, resold for use as provided in subparagraph (C) of paragraph (3) and the other article referred to in such subparagraph is by any person exported or sold as provided in such subparagraph;

(G) in the case of a liquid taxable under section 4041, sold for use as fuel in a diesel-powered highway vehicle or as fuel for the propulsion of a motor vehicle, motorboat, or airplane, if before July 1, 1970 (i) the vendee used such liquid otherwise than as fuel in such a vehicle, motorboat, or airplane or resold such liquid, or (ii) such liquid was (within the meaning of paragraphs (1), (2), and (3) of section 6420 (c)) used on a farm for farming purposes;

(H) in the case of a liquid in respect of which tax was paid under section 4041 at the rate of 3 cents or 4 cents a gallon, used during any calendar quarter beginning before July 1, 1970, in vehicles while engaged in furnishing scheduled common carrier public passenger land transportation service along regular routes; except that (i) this subparagraph shall apply only if the 60 percent passenger fare revenue test set forth in section 6421(b) (2) is met with respect to such quarter, and (ii) the amount of such overpayment for such quarter shall be an amount determined by multiplying 1 cent (where tax was paid at the 3-cent rate) or 2 cents (where tax was paid at the 4-cent rate) for each gallon of liquid

so used by the percentage which such person's commuter fare revenue (as defined in section 6421 (d) (2)) derived from such scheduled service during such quarter was of his total passenger fare revenue derived from such scheduled service during such quarter;

(I) in the case of a liquid in respect of which tax was paid under section 4041 (a) (1) at the rate of 3 cents or 4 cents a gallon, used or resold for use before July 1, 1970, as a fuel in a diesel-powered highway vehicle (i) which (at the time of such use or resale) is not registered, and is not required to be registered, for highway use under the laws of any State or foreign country, or (ii) which, in the case of a diesel-powered highway vehicle owned by the United States, is not used on the highway; except that the amount of any overpayment by reason of this subparagraph shall not exceed an amount computed at the rate of 1 cent a gallon where tax was paid at the 3-cent rate or at the rate of 2 cents a gallon where tax was paid at the 4-cent rate;

(J) in the case of a liquid in respect of which tax was paid under section 4041 (b) (1) at the rate of 3 cents or 4 cents a gallon, used or resold for use before July 1, 1970, otherwise than as a fuel for the propulsion of a highway vehicle (i) which (at the time of such use or resale) is registered, or is required to be registered, for highway use under the laws of any State or foreign country, or (ii) which, in the case of a highway vehicle owned by the United States, is used on the highway; except that the amount of any overpayment by reason of this subparagraph shall not exceed an amount computed at the rate of 1 cent a gallon where tax was paid at the 3-cent rate or at the rate of 2 cents a gallon where tax was paid at the 4-cent rate;

(K) in the case of any article taxable under section 4061 (b) (other than spark plugs and storage batteries), used or sold for use as repair of replacement parts or accessories for farm equipment (other than equipment taxable under section 4061 (a));

(L) in the case of tread rubber in respect of which tax was paid under section 4071 (a) (4), used or sold for use otherwise than in the recapping or retreading of tires of the type used on highway vehicles (as defined in section 4072 (c)), unless credit or refund of such tax is allowable under subsection (b) (3);

(M) in the case of gasoline, used or sold for use in the production of special fuels referred to in section 4041;

(N)-(Q) Repealed. Pub. L. 89-44, Title VI, § 601 (c) (9), June 21, 1965, 79 Stat. 153;

(R) in the case of a bus chassis or body taxable under section 4061 (a), sold to any person for use as described in section 4221 (e) (5).

(3) TAX-PAID ARTICLES USED FOR FURTHER MANUFACTURE.—If

the tax imposed by chapter 32 has been paid with respect to the sale of any article 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 an article to which subparagraph (B), (C), or (E) applies, such article is used by the subsequent manufacturer or producer as material in the manufacture or production of, or as a component part of, another article taxable under chapter 32 manufactured or produced by him;

(B) in the case of a part or accessory taxable under section 4061 (b), such article is used by the subsequent manufacturer or producer as material in the manufacture or production of, or as a component part of, any other article manufactured or produced by him;

(C) in the case of a tire or inner tube taxable under section 4071, such article is sold by the subsequent manufacturer or producer on or in connection with, or with the sale of, any other article manufactured or produced by him and such other article is by any 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;

(D) Repealed. Pub. L. 89-44, Title VI, § 601 (c) (10), June 21, 1965, 79 Stat. 153;

(E) in the case of

(i) a bicycle tire (as defined in section 4221 (e) (4) (B)), or

(ii) an inner tube for such a tire,

such article is used by the subsequent manufacturer or producer as material in the manufacture or production of, or as a component part of, a bicycle (other than a rebuilt or reconditioned bicycle);

or

(F) in the case of gasoline taxable under section 4081, such gasoline 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. For purposes of subparagraphs (A) and (B), 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.

(4) TIRES AND INNER TUBES.-If

(A) a tire or inner tube taxable under section 4071 is sold by the manufacturer, producer, or importer thereof on or in con