Page:United States Statutes at Large Volume 72 Part 1.djvu/1322

 1280

PUBLIC LAW 86-859-SEPT. 2, 1968

[72 S T A T.

SEC. 116. SALES OF INSTALLMENT ACCOUNTS BY MANUFACTURERS. Section 4216 (computation of tax on installment sales, etc.) is amended by adding at the end thereof the following new subsection: "(e) SALES OF INSTALLMENT ACCOUNTS.—If installment accounts,

with respect to payments on which tax is being computed as provided in subsection (c), are sold or otherwise disposed of, then subsection (c) shall not apply with respect to any subsequent payments on such accounts (other than subsequent payments on returned accounts with respect to which credit or refund is allowable by reason of sec26 USC 6416. tion 6416(b)(5)), but instead— "(1) there shall be paid an amount equal to the difference between (A) the tax previously paid on the payments on such installment accounts, and (B) the total tax; except that "(2) if any such sale is pursuant to the order of, or subject to the approval of, a court of competent jurisdiction in a bankruptcy or insolvency proceeding, the amount computed under paragraph (1) shall not exceed the amount computed by multiplying (A) the amount for which such accounts are sold, by (B) the rate of tax under this chapter which applied on the day on which the transaction giving rise to such installment accounts took place. The sum of the amounts payable under this subsection and subsection (c) in respect of the sale of any article shall not exceed the total tax." SEC. 117. LEASES OF CERTAIN ARTICLES SUBJECT TO MANUFACTURERS EXCISE TAXES. 26 USC 4217. (^g^^^ IJ^ GENERAL.—Section 4217 (lease considered as sale) is amended to read as follows: "SEC. 4217. LEASES. "(a) LEASE CONSIDERED AS SALE.—For purposes of this chapter, the lease of an article (including any renewal or any extension of a lease or any subsequent lease of such article) by the manufacturer, producer, or importer shall be considered a sale of such article. "(b) LIMITATION ON TAX.—In the case of any lease described in subsection (a) of an article taxable under this chapter, if the tax under this chapter is based on the price for which such articles are ' sold, there shall be paid on each lease payment with respect to such article a percentage of such payment equal to the irate of tax in effect on the date of such payment, until the total of the tax payments under such lease and any prior lease to which this subsection applies equals the total tax. "(c) DEFINITION OF TOTAL TAX.—For purposes of this section, the term 'total tax' means— "(1) except as provided in paragraph (2), the tax computed on the constructive sale price for such article which would be determined under section 4216(b) if such article were sold at retail on the date of the first lease to which subsection (b) applies; or "(2) if the first lease to which subsection (b) applies is not the first lease of the article, the tax computed on the fair market value of such article on the date of the first lease to which subsection (b) applies. Any such computation of tax shall be made at the applicable rate specified in this chapter in effect on the date of the first lease to which subsection (b) applies. " (d) SPECIAL BULES.— " (1) LESSOR MUST ALSO BE ENGAGED I N SELLING.—Subsection (b)

shall not apply to any lease of an article unless at the time of making the lease, or any prior lease of such article to which subsection (b) applies, the person making the lease or prior lease was

�