Page:United States Statutes at Large Volume 100 Part 2.djvu/662

 100 STAT. 1764

PUBLIC LAW 99-499—OCT. 17, 1986

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which is a qualified animal feed substance, no tax shall be imposed under section 4661(a).

26 USC 4661.

" (B) Q U A U F I E D A N I M A L FEED S U B S T A N C E. — For purpOSCS o f

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this section, the term 'qualified animal feed substance' s ^ means any substance— "(i) used in a qualified animal feed use by the manufacturer, producer, or importer, . _ "(ii) sold for use by any purchaser in a qualified H animal feed use, or "(iii) sold for resale by any purchaser for use, or i^. i resale for ultimate use, in a qualified animal feed use. "(C) QUALIFIED ANIMAL FEED USE.—The term 'qualified animal feed use' means any use in the manufacture or production of animal feed or animal feed supplements, or of ingredients used in animal feed or animal feed supplements. "(D) TAXATION OF NONQUAUFIED SALE OR USE.—For pur-

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poses of section 4661(a), if no tax was imposed by such section on the sale or use of any chemical by reason of subparagraph (A), the 1st person who sells or uses such chemical other than in a sale or use described in subparagraph (A) shall be treated as the manufacturer of such chemical." (2) REFUND OR CREDIT FOR SUBSTANCES USED IN THE PRODUCTION OF ANIMAL FEED.—Subsection (d) of section 4662 of such

Ante, p. 1762. '

Code (relating to refunds and credits with respect to the tax on certain chemicals) is amended by adding at the end thereof the following new paragraph:

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"(4) USE IN THE PRODUCTION OF ANIMAL FEED.—Under regula-

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tions prescribed by the Secretary, if— "(A) a tax under section 4661 was paid with respect to '^ nitric acid, sulfuric acid, ammonia, or methane used to 4 ' produce ammonia, without regard to subsection (b)(9), and "(B) any person uses such substance as a qualified animal feed substance, then an amount equal to the excess of the tax so paid over the tax determined with regard to subsection (b)(9) shall be allowed as a credit or refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by this section." (f) CERTAIN EXCHANGES BY TAXPAYERS NOT TREATED AS SALES.—

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Subsection (c) of section 4662 of such Code (relating to use by manufacturers) is amended to read as follows: "(c)

USE AND CERTAIN EXCHANGES BY MANUFACTURER, ETC.— "(1) USE TREATED AS SALE.—Except as provided in subsections

(b) and (e), if any person manufactures, produces, or imports any taxable chemical and uses such chemical, then such person shall be liable for tax under section 4661 in the same manner as if such chemical were sold by such person. ,

"(2) SPECIAL RULES FOR INVENTORY EXCHANGES.—

"(A) IN GENERAL.—Except as provided in this paragraph, in any case in which a manufacturer, producer, or importer of a taxable chemical exchanges such chemical as part of an inventory exchange with another person— "(i) such exchange shall not be treated as a sale, and

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