Page:United States Statutes at Large Volume 84 Part 2.djvu/514

 1844

PUBLIC LAW 91-614-DEC. 31, 1970

[84 STAT.

TITLE III—TECHNICAL EXCISE TAX CHANGES SEC. 301. CONSTRUCTIVE SALE PRICE. 72 Stat. 1279;

83 Stat. 725. 26 USC 4216.

(a) DETERMINATION OF CONSTRUCTIVE S A L E P R I C E. — S e c t i o i l 4 2 1 6 (b)

(relating to constructive sale price) is amended by adding at the end ji

J! 3

J n ?

•

^

tnereoi the lollowing new paragraphs: "(5)

Ante, p. 1843.

68A Stat. 369.

CONSTRUCTIVE SALE PRICE I N THE CASE OF AUTOMOBILES,

TRUCKS, ETC.—In the case of articles the sale of which is taxable under section 4061(a) (relating to automobiles, trucks, etc.), for purposes of paragraph (1), if— " (A) the manufacturer, producer, or importer of the article regularly sells such article to a distributor which is a member of the same affiliated group of corporations (as defined in section 1504(a)) as the manufacturer, producer, or importer, and " (B) such distributor regularly sells such article to one or more independent retailers, the constructive sale price of such article shall be 981/2 percent of the lowest price for which such distributor regularly sells such article in arm's-length transactions to such independent retailers. The price determined under this paragraph shall not be adjusted for any exclusion (except for the tax imposed on such article) or readjustments under subsections (a) and (f) and under section 6416(b)(1). "(6) DEFINITION OF LOWEST PRICE.—For purposes of paragraphs (1), (3), and (5), the lowest price shall be determined— " (A) without requiring that any given percentage of sales be made at that price, and " (B) without including any fixed amount to which the purchaser has a right as a result of contractual arrangements existing at the time of the sale." (b)

CONFORMING AMENDMENTS.—

(1) The first sentence of paragraph (3) of section 4216(b) is amended by striking out "paragraph (4) " and inserting in lieu thereof "paragraphs (4) and (5) ". (2) Paragraphs (3) and (4) of section 4216(b) are amended— (A) by striking out "Fair market price" in the heading and inserting in lieu thereof "Constructive sale price"; (B) hj striking out "fair market price" each place it appears m the text and inserting in lieu thereof "constructive sale price"; and (C) by striking out "paragraph (1)(C) " and inserting in lieu thereof "paragraph (1)". (c) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to articles sold after December 31, 1970; except that section 4216(b)(6) of the Internal Revenue Code of 1954 (as added by subsection (a)) shall also apply to (1) the application of paragraph (1) of such section 4216(b) to articles sold after June 30, 1962, and before January 1, 1971, and (2) the application of paragraph (3) of such section 4216(b) to articles sold after December 31, 1969, and before January 1, 1971.

�