[Code of Federal Regulations]
[Title 26, Volume 16]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR48.4221-7]

[Page 178-179]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 48_MANUFACTURERS AND RETAILERS EXCISE TAXES--Table of Contents
 
                Subpart N_Exemptions, Registration, Etc.
 
Sec. 48.4221-7  Tax-free sales of tires and tubes.

    (a) In general. A manufacturer of tires or inner tubes that are 
taxable under section 4071 may sell such articles tax free if the sale 
meets the conditions prescribed in section 4221(e)(2) and paragraph (a) 
(1) and (2) of this section. The following are conditions under which 
articles taxable under section 4071 may be sold tax free:
    (1) The tire or tube is sold for use by the purchaser for sale on or 
in connection with the sale of another article manufactured or produced 
by the purchaser; and
    (2) The other article is to be sold in a tax-free sale by the 
purchaser for export, for use as supplies for vessels or aircraft, to a 
State or local government for its exclusive use, or to a nonprofit 
educational organization for its exclusive use, or the other article is 
to be sold by the purchaser for any of such purposes in a sale which 
would be tax-free but for the fact that the other article is not subject 
to tax under Chapter 32 of the Code.

See section 6416(b)(2)(F) and paragraph (b)(6) of Sec. 48.6416(b)-2 for 
the circumstances under which credit or refund of tax is available for 
tax-paid tires or tubes that are resold for the purposes described in 
this paragraph (a).
    (b) Registration requirements. In order to effect a tax-free sale 
under section 4221(e)(2)(A), both the manufacturer and purchaser (except 
for purchasers who are exempt from the registration requirement under 
Sec. 48.4222(b)-1) must be registered with the District Director of 
Internal Revenue as required in Sec. 48.4222(a)-1. At the time of sale, 
the registration number assigned to the

[[Page 179]]

purchaser by the district director together with the purpose for which 
the article was purchased must be shown on (or attached to) the invoice, 
purchase order, or other document used for the sale.
    (c) Proof required in support of tax-free sales of tires and tubes--
(1) Cessation of exemption. The exemption allowed under section 
4221(e)(2)(A) and this section on the sale of a tire or inner tube shall 
cease to apply unless, within the 6-month period which begins on the 
date of the tax-free sale by the manufacturer of such article (or, if 
earlier, on the date of shipment by such manufacturer), the manufacturer 
receives proof from the purchaser that such article has been used on or 
in connection with the sale of another article which has been sold for 
one of the tax-exempt purposes referred to in paragraph (a)(2) of this 
section. If the manufacturer has not received the required information 
within such 6-month period, the temporary suspension of the liability 
for the payment of the tax ceases, and the manufacturer shall include 
the tax on the sale of the tire or inner tube in his return for the 
period in which the 6-month period expires. If the required information 
is received after the expiration of the 6-month period, the manufacturer 
may file a claim for credit or refund of tax so paid on his sale of the 
tire or inner tube.
    (2) Required information. The information which the manufacturer 
must receive within the 6-month period, referred to in paragraph (c)(1) 
of this section, shall be in substantially the following form:

                   Statement of Manufacturer's Vendee

(To support tax-free sales of tires or inner tubes by the manufacturer 
          thereof for use on or in connection with the sale of another 
          article (section 4221(e)(2) of the Internal Revenue Code))

                                      (Date) ------------------, 19----.

    I certify that I, or the ------------------, (Name of purchaser if 
other than undersigned) of which I am ------------------ (Title) am/is 
in the business of selling ------------------ (Products handled) and 
hold(s) certificate of registry No. ---- issued by the District Director 
of Internal Revenue at ------------------; and that the tires or inner 
tubes which were purchased or shipped on ------------, 19----, as 
specified on the back hereof, have been used on or in connection with 
the sale of ------------------ (Products sold) by such undersigned.

                                Check one

---- for export by ------------------ (Name of carrier) to ------------
------ (Name of foreign country or U.S. possession) and was so exported 
on ----------, 19---- (Date). (A copy of the bill of lading or other 
proof of exportation is attached.)

---- for use as supplies on ------------------ (Name of vessel or 
aircraft) which is registered in ------------------ (Name of country in 
which vessel or aircraft is registered).

---- to ------------------ (Name of State or local government).

---- to ------------------ (Name and address of the nonprofit 
educational organization).

    I understand that the fraudulent use of this certificate for the 
purpose of substantiating the tax-free sale will subject me and all 
parties making such fraudulent use of this certificate to revocation of 
the privilege of purchasing articles tax free and to a fine of not more 
than $10,000 or to imprisonment for not more than 5 years, or both, 
together with costs of prosecution.

________________________________________________________________________
                                                             (Signature)
________________________________________________________________________
                                                               (Address)