[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: 26CFR48.6412-3]

[Page 187-188]
 
                       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 O_Refunds and Other Administrative Provisions of Special 
            Application to Retailers and Manufacturers Taxes
 
Sec. 48.6412-3  Amount of tax paid on each article.

    (a) General rule. For purposes of making the claim for credit or 
refund under Sec. 48.6412-1 in respect of floor stocks held by a 
dealer, the tax paid on each article must be separately computed. If 
desired, the procedures set forth in paragraphs (b) through (g) of this 
section may be used in making the computation. The procedure used in 
determining the tax paid on an article must also be used in determining 
the amount of tax, if any, made applicable to the article on the 
effective date of reduction or repeal of the tax involved. Prior 
approval of the Internal Revenue Service for the method of computation 
need not be obtained and should not be requested.
    (b) Selling price. In determining the price of an article on which 
the tax paid is to be computed, the average of the gross selling prices 
of identical articles sold during a representative period may be used. 
For example, truck

[[Page 188]]

chassis of the same model that are sold by the manufacturer with the 
same equipment and accessories are identical articles whose selling 
prices may be computed on the basis of an average.
    (c) Transportation charges. In determining the price of an article 
on which the tax paid is to be computed, the average of the exclusions 
authorized by section 4216(a) for transportation, delivery, insurance, 
installation, etc., for a reasonable category of articles during a 
representative period may be used.
    (d) Credits for tax paid on inner tubes. The average of the credits 
authorized by section 6416(c) for tax paid on tires or inner tubes may 
be averaged for a reasonable category of articles during a 
representative period. The credits shall be subtracted from the gross 
excise tax to arrive at the net excise tax paid.
    (e) Price readjustments. (1) In determining the price on which the 
tax paid is to be computed, there must be taken into account any price 
readjustments with respect to which the manufacturer has filed a claim 
for credit or refund under section 6416(b). Other price readjustments 
which have been, or are reasonably expected to be, made with respect to 
the article may, at the option of the manufacturer, be taken into 
account in computing the price of the article.
    (2) Price readjustments which cannot be attributed to specific 
articles as of the inventory date (as, for example, a price readjustment 
of a flat dollar amount which is made to dealers who meet a sales quota) 
may be taken into account on the basis of an average of the adjustments 
which is computed for a reasonable category of articles over a 
representative period.
    (3) Price readjustments related to specific items (as, for example, 
an automatic rebate of a specific percentage of the price of each unit 
sold to a dealer) may not be averaged, and in such a case only the 
actual price readjustment attributable to a particular article may be 
taken into account in computing the tax on that article.
    (4) If, because of the facts in a case, a price readjustment can be 
attributed to specific articles for purposes of consumer refunds but 
cannot be attributed to specific articles for purposes of floor stocks 
credits or refunds, the price adjustment may be averaged for purposes of 
both consumer refunds and floor stocks credits and refunds.
    (f) Representative period. A period will be considered a 
representative period if--
    (1) It covers (i) at least four consecutive calendar quarters, the 
last of which ends with a period of six calendar months immediately 
preceding the effective date of the tax reduction or repeal involved or 
(ii) any other period of time which the taxpayer can demonstrate 
constitutes a representative period for the particular category, and
    (2) The number of articles in the category involved sold by the 
manufacturer during the period either (i) equals or exceeds the number 
of articles in the category to which the average amount is to be applied 
or (ii) can be demonstrated by the taxpayer to be a representative 
quantity.
    (g) Reasonable category. Examples of a reasonable category of 
articles are articles that are identified by a common stock or class 
number or which are of the same model, class, or line. For the purpose 
of averaging exclusions, another example of a reasonable category of 
articles is a grouping of articles that are shipped in the same 
container. If a manufacturer sells articles bearing his own trademark 
and also sells articles as private brands, separate computations of the 
two brands must be made under this section.

[T.D. 8043, 50 FR 32022, Aug. 8, 1985]