[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: 26CFR48.6416(b)(1)-3]

[Page 195]
 
                       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. 48.6416(b)(1)-3  Readjustment for local advertising charges.

    (a) In general. If a manufacturer has paid the tax imposed by 
chapter 32 on the price of any article sold by the manufacturer and 
thereafter has repaid a portion of the price to the purchaser or any 
subsequent vendee in reimbursement of expenses for local advertising of 
the article or any other article sold by the manufacturer which is 
taxable at the same rate under the same section of chapter 32, the 
reimbursement will be considered a price readjustment constituting an 
overpayment which the manufacturer may claim as a credit or refund. The 
amount of the reimbursement may not, however, exceed the limitation 
provided by section 4216(e)(2) and Sec. 48.4216(e)-2, determined as of 
the close of the calendar quarter in which the reimbursement is made or 
as of the close of any subsequent calendar quarter of the same calendar 
year in which it is made. The term ``local advertising'', as used in 
this section, has the same meaning as prescribed by section 4216(e)(4) 
and includes generally, advertising which is broadcast over a radio 
station or television station, or appears in a newspaper or magazine, or 
is displayed by means of an outdoor advertising sign or poster.
    (b) Local advertising charges excluded from taxable price in one 
year but repaid in following year--(1) Determination of price 
readjustments for year in which charge is repaid. If the tax imposed by 
chapter 32 was paid with respect to local advertising charges that were 
excluded in computing the taxable price of an article sold in any 
calendar year but are not repaid to the manufacturer's purchaser or any 
subsequent vendee before May 1 of the following calendar year, the 
subsequent repayment of those charges by the manufacturer in 
reimbursement of expenses for local advertising will be considered a 
price readjustment constituting an overpayment which the manufacturer 
may claim as a credit or refund. The amount of the reimbursement may 
not, however, exceed the limitation provided by section 4216(e)(2) and 
Sec. 48.4216(e)-(2), determined as of the close of the calendar quarter 
in which the reimbursement is made or as of the close of any subsequent 
calendar quarter of the same calendar year in which it is made.
    (2) Redetermination of price readjustments for year in which charge 
was made. If the tax imposed by chapter 32 was paid with respect to 
local advertising charges that were excluded in computing the taxable 
price of an article sold in any calendar year but are not repaid to the 
manufacturer's purchaser or any subsequent vendor before May 1 of the 
following calendar year, the manufacturer may make a redetermination, in 
respect of the calendar year in which the charge was made, of the price 
readjustments constituting an overpayment which the manufacturer may 
claim as a credit or refund. This redetermination may be made by 
excluding the local advertising charges made in the calendar year that 
became taxable as of May 1 of the following calendar year.

[T.D. 8043, 50 FR 32026, Aug. 8, 1985]

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