Page:United States Statutes at Large Volume 72 Part 1.djvu/1323

 72 S T A T. ]

PUBLIC LAW 8 6 - 8 5 9 - S E P T. 2, 1958

1281

also engaged in the business of selling in arm's length transactions the same type and model of article. "(2) SALE BEFORE TOTAL TAX BECOMES PAYABLE.—If the taxpayer sells an article before the total tax has become payable, then the tax payable on such sale.shall be whichever of the following is the smaller: " (A) the difference between (i) the tax imposed on lease payments under leases of such article to which subsection (b) applies, and (ii) the total tax, or " (B) a tax computed, at the rate in effect on the date of the sale, on the price for which the article is sold. For purposes of subparagraph (B), if the sale is at arm's length, section 4216(b) shall not apply. "(3) SALE AFTER TOTAL TAX HAS BECOME PAYABLE.—If the taxpayer sells an article after the total tax has become payable, no tax shall be imposed under this chapter on such sale. "(4) TRANSITIONAL RULES.—For purposes of this subsection and subsections (b) and (c), in the case of any lease entered into before the effective date of subsection (b) and existing on such date— " (A) such lease shall be considered as having been entered into on such date; " (B) the total tax shall be computed on the fair market value of the article on such date; and " (C) the lease payments under such lease shall include only payments attributable to periods on and after such date." (b) KEPEAL OF SECTION 4216 (d); CORRECTION OF CROSS REFER- 26 USC 42le. ENCE.—Section 4216 (definition of price) is amended by striking out subsection (d) thereof. Section 4216(c) (partial payments) is amended by striking out "subsection (d) " and inserting in lieu thereof "section 4217(b)". (c) APPLICATION OF SECTION.—The amendments made by subsections (a) and (b) shall not apply to any lease of an article if section 4216 (d) of the Internal Revenue Code of 1954 applied to any lease of such article before the effective date specified in section 1(c) of this Act. (d) TECHNICAL AMENDMENT.—The table of sections for subchapter F of chapter 82 is amended by striking out "I>ease consider.ed sale." 4226.^^^ ^^'^ and inserting in lieu thereof "Leases.". SEC. 118. USE BY MANUFACTURER OR IMPORTER CONSIDERED SALE. Section 4218 (use by manufacturer or importer considered sale) is ^^ ^^^ *2i8. amended to read as follows: "SEC. 4218. USE BY MANUFACTURER OR IMPORTER CONSIDERED SALE. " (a) GENERAL RULE. — I f any person manufactures, produces, or imports an article (other than an article specified in subsection (b) or (c)) and uses it (otherwise than 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), then he shall be liable for tax under this chapter in the same manner as if such article were sold by him. " (b) TIRES, TUBES, AND AUTOMOBILE RECEIVING SETS.—If any person manufactures, produces, or imports a tire or inner tube taxable under section 4071, or an automobile radio or television receiving set ^^ ^^^ *°^'' taxable under section 4141, and sells it on or in connection with the sale of any article, or uses it, then he shall be liable for tax under this chapter in the same manner as if such article were sold by him.

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