Page:United States Statutes at Large Volume 78.djvu/83

 78 STAT. ] "(2)

PUBLIC LAW 88-272-FEB. 26, 1964

41

G E N E R A I. SALES TAXES.—

" (A) IN GENERAL.—The term 'general sales tax ' means a tax imposed at one rate in respect of the sale at retail of a broad range of classes of items. " (B) SPECIAL RULES FOR FOOD, ETC.—In the case of items of food, clothing, medical supplies, and motor vehicles— "(i) the fact that the tax does not apply in respect of some or all of such items shall not be taken into account in determining whether the tax applies in respect of a broad range of classes of items, and "(ii) the fact that the rate of tax applicable in respect of some or all of such items is lower than the general rate of tax shall not be taken into account in determining whether the tax is imposed at one rate. " (C) ITEMS TAXED AT DIFFERENT RATES.—Except in the

case of a lower rate of tax applicable in respect of an item described in subparagraph (B), no deduction shall be allowed under this section for any general sales tax imposed in respect of an item at a rate other than the general rate of tax. " (D) COMPENSZ^TING "USE TAXES.—A compensating use tax in respect of an item shall be treated as a general sales tax. For purposes of the preceding sentence, the term 'compensating use tax' means, in respect of any item, a tax which— "(i) is imposed on the use, storage, or consumption of such item, and " (ii) is complementary to a general sales tax, but onlj' if a deduction is allowable under subsection (a)(4) in respect of items sold at retail in the taxing jurisdiction which are similar to such item. " (3) STATE OR LOCAL TAXES.—A State or local tax includes only a tax imposed by a State, a possession of the United States, or a political subdivision of any of the foregoing, or by the District of Columbia. "(4) FOREIGN TAXES.—A foreign tax includes only a tax imposed by the authority of a foreign countiy. " (5) SEPARATELY STATED GENERAL SALES TAXES AND GASOLINE

TAXES.—If the amount of any general sales tax or of any tax on the sale of gasoline, diesel fuel, or other motor fuel is separately stated, then, to the extent that the amount so stated is paid by (he consumer (otherwise than in connection with the consumer's trade or business) to his seller, such amount shall be treated as a tax imposed on, and paid by, such consumer. " (c) DEDUCTION DENIED IN CASE OF CERTAIN TAXES.—No deduction

si I nil be allowed for the following taxes: " (1) Taxes assessed against local benefits of a kind tending to iiK-rease the vdlne of the property assessed; but this paragraph shall not pi-event the deduction of so much of such taxes as is properly allocable to maintenance or interest charges. "(2) Taxes on real property, to the extent that subsection (d) requires such taxes to be treated as imposed on another taxpayer.'' (b) TECHNICAL AMENDMENTS.—

(1) The first sentence of section 164(f) (relating to payments ' ^^ sta^ leos. for iimiilcipal services in atomic energy communities) is amended by inserting "Stale" before "real property taxes".

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