Manufacturers Excise TaxesFirearms and Ammunition (95R-055P)

[[Page 37005]]

DEPARTMENT OF THE TREASURY

27 CFR Part 53

[T.D. ATF-380]

RIN 1512-AB42

Manufacturers Excise Taxes--Firearms and Ammunition (95R-055P)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of

the Treasury.

ACTION: Temporary rule (Treasury decision).

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is amending

the regulations in 27 CFR Part 53 to simplify the regulations relating

to exemption certificates. The regulations are being revised to give

taxpayers the option of using a preprinted document for use as

exemption certificates and vendor(vendee) statements or designing their

own certificates and statements using specified information. The

temporary rule will remain in effect until superseded by final

regulations.

These amendments are part of the Administration's Reinventing

Government effort to reduce burden and streamline requirements.

In the proposed rules section of this Federal Register, ATF is also

issuing a notice of proposed rulemaking inviting comments on the

temporary rule for a 90-day period following the publication date of

this temporary rule.

EFFECTIVE DATE: The temporary regulations are effective July 16, 1996.

ADDRESS: Send written comments to: Chief, Regulations Branch, Bureau of

Alcohol, Tobacco and Firearms, P.O. Box 50221, Washington, DC 20226-

0221.

FOR FURTHER INFORMATION CONTACT: Mary Lou Blake, Regulations Branch,

Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts Ave., NW,

Washington, DC 20226; (202-927-8210).

SUPPLEMENTARY INFORMATION:

Background

Under current regulations, persons who sell firearms or ammunition

tax-free must obtain certain exemption certificates or statements to

support such sales. Current regulations include suggested forms for

each type of statement and certificate. These certificates and

statements are now available through the Bureau's Distribution Center.

Taxpayers may order these preprinted documents and reproduce them as

needed.

Since the forms are available from ATF, there is no need to

reproduce them in the regulations. Accordingly, this Treasury Decision

removes the text of the forms from the regulations, but retains all

information required for taxpayers who wish to design and use their own

certificates or statements.

This temporary rule also includes technical amendments to the

regulations in 27 CFR Part 53.

Executive Order 12866

It has been determined that this temporary rule is not a

significant regulatory action as defined in E.O. 12866. Therefore, a

regulatory assessment is not required.

Administrative Procedure Act

Because this document merely furnishes the taxpayer with an

optional method of providing exemption certificates or statements and

does not change the existing regulatory requirements, it is found to be

impracticable to issue this Treasury decision with notice and public

procedure under 5 U.S.C. 553(b), or subject to the effective date

limitation in section 553(d).

Regulatory Flexibility Act

It is hereby certified that this regulation will not have a

significant economic impact on a substantial number of small entities

or impose or otherwise cause an increase in the reporting,

recordkeeping or other compliance burdens on a substantial number of

small entities. The factual basis for such certification is that this

revision does not add any new requirement for reporting or

recordkeeping. This revision serves only to clarify and streamline

current regulatory requirements. Pursuant to section 7805(f) of the

Internal Revenue Code, this proposed regulation has been submitted to

the Chief Counsel for Advocacy of the Small Business Administration for

comment on its impact on small business.

Paperwork Reduction Act

The provisions of the Paperwork Reduction Act of 1980, Public Law

96-511, 44 U.S.C. chapter 35, and its implementing regulations, 5 CFR

part 1329, do not apply to this regulation because there are no new

reporting or recordkeeping requirements.

Drafting Information

The author of this document is Mary Lou Blake, Regulations Branch,

Bureau of Alcohol, Tobacco and Firearms.

List of Subjects in 27 CFR Part 53

Administrative practice and procedure, Arms and munitions,

Authority delegations, Exports, Imports, Penalties, Reporting and

recordkeeping requirements.

Authority and Issuance

27 CFR Part 53 is amended to read as follows:

PART 53--MANUFACTURERS EXCISE TAXES--FIREARMS AND AMMUNITION

Paragraph 1. The authority citation for 27 CFR Part 53 continues to

read as follows:

Authority: 26 U.S.C. 4181, 4182, 4216-4219, 4221-4223, 4225,

6001, 6011, 6020, 6021, 6061, 6071, 6081, 6091, 6101-6104, 6109,

6151, 6155, 6161, 6301-6303, 6311, 6402, 6404, 6416.

Par. 2. Section 53.3 is revised to read as follows:

Sec. 53.3 Exemption certificates.

Several sections of the regulations in this part, relating to sales

exempt from manufacturers excise tax, require the manufacturer to

obtain an exemption certificate from the purchaser to substantiate the

exempt character of the sale. Any form of exemption certificate will be

acceptable if it includes all the information required to be contained

in such a certificate by the pertinent sections of the regulations in

this part. These certificates are available as preprinted documents

which may be ordered from the Bureau's Distribution Center (see

Sec. 53.21 for the address of the Distribution Center). The preprinted

certificates may be reproduced as needed.

Par. 3. Section 53.131 is amended by revising the third sentence in

paragraph (a)(5) to read as follows:

Sec. 53.131 Tax-free sales; general rule.

(a) * * *

* * * * *

(5) * * * See paragraph (c) of this section for provisions relating

to evidence required in support of tax-free sales. * * *

* * * * *

Par. 4. Section 53.132 is amended by revising paragraph (c)(2)(i)

and by adding paragraph (c)(2)(iii) to read as follows:

Sec. 53.132 Tax-free sale of article to be used for, or resold for,

further manufacture.

* * * * *

(c) * * *

(2) * * *

(i) Certificate of purchaser. The proof of resale to be received by

the

[[Page 37006]]

manufacturer, as required under section 4221(b)(1) of the Code, may

consist of either a copy of the invoice of the manufacturer's vendee

directed to his purchaser which discloses the certificate of registry

number held by each party or a statement described in this paragraph.

In the case of an invoice of manufacturer's vendee, it must appear from

such invoice (or by statement attached thereto) that the article was in

fact resold for use in further manufacture. In lieu of such an invoice,

proof of resale may consist of a statement, executed and signed by the

manufacturer's vendee which includes the following:

(A) Date statement was executed.

(B) Name and address of manufacturer's vendee (if other than the

person executing statement).

(C) Certificate of registry number held by vendee.

(D) Specify article(s) purchased tax-free, by whom purchased,

certificate of registry number of second purchaser, date of

purchase(s), whether articles were purchased as material in the

manufacture or production of, or as a component part or parts of, an

article or articles taxable under Chapter 32 of the Code.

(E) Statement that person executing statement or manufacturer's

vendee possesses proof of tax-free resale of the article(s) in the form

of purchase orders and sales invoices and identifying the person who

will maintain custody of such proof for 3 years from the date of the

statement and will make such proof available for inspection by ATF

during such 3 year period.

(F) Statement that a previous statement has not been executed in

respect of such certificate of resale and that the person signing the

statement is aware that fraudulent use of the statement may subject the

person signing the statement and all parties making fraudulent use of

the statement to all applicable criminal penalties under the Code.

(G) Name, signature, and title of individual executing statement.

(ii) * * *

(iii) ATF I 5600.37. A preprinted statement, ATF I 5600.37,

Statement of Manufacturer's Vendee, is available from the Bureau's

Distribution Center which, when completed, contains all necessary

information for a properly executed statement. Extra copies of ATF I

5600.37 may be reproduced as needed.

Par. 5. Section 53.133 is amended by revising paragraph (d)(2) and

by adding paragraph (d)(4) to read as follows:

Sec. 53.133 Tax-free sale of article for export, or for resale by the

purchaser to a second purchaser for export.

* * * * *

(d) * * *

* * * * *

(2) In any case where the manufacturer is not the exporter, the

manufacturer must have in its possession a statement from the vendee to

whom the manufacturer sold the article stating the following:

(i) Date statement was executed.

(ii) Name and address of manufacturer's vendee (if other than the

person executing statement).

(iii) Certificate of registry number held by vendee.

(iv) Specify article(s) purchased tax-free, by whom purchased, and

date of purchase.

(v) Statement that article(s) was either exported in due course by

the vendee or was sold to another person who in due course exported the

article(s).

(vi) Name and address of vendee who will maintain possession of the

proof of exportation documents, description of the documents, and

statement that vendee will maintain documents for 3 years and make them

available to ATF for inspection.

(vii) Statement that a previous statement has not been executed in

respect of the articles covered by this statement and that fraudulent

use of this statement may subject person executing statement and all

parties making fraudulent use of statement to all applicable criminal

penalties under the Code.

(viii) Name, signature, title, and address of individual executing

certificate.

(3) * * *

(4) ATF I 5600.36. A preprinted statement, ATF I 5600.36, Statement

of Manufacturer's Vendee, is available from the Bureau's Distribution

Center which, when completed, contains all necessary information for a

properly executed statement. Extra copies of ATF I 5600.36 may be

reproduced as needed.

Par. 6. Section 53.134 is amended by revising paragraph (d)(2)(iii)

and by adding paragraph (d)(2)(iv) to read as follows:

Sec. 53.134 Tax-free sale of articles for use by the purchaser as

supplies for vessels or aircraft.

* * * * *

(d) * * *

(2) * * *

(iii) Acceptable form of exemption certificate. A certificate of

exemption to support tax-free sales under this section must include the

following:

(A) Name of owner, charterer, or authorized agent.

(B) Name of company and vessel.

(C) List article(s) covered by the certificate or beginning and

ending dates during which orders will be placed (not to exceed 12

calendar quarters).

(D) Statement that articles will be used only for fuel supplies,

ships' stores, sea stores, or legitimate equipment on a vessel

belonging to one of the class of vessels to which section 4221 of the

Code applies. Identify class of vessel certificate covers (see

paragraphs (a) and (b) of this section).

(E) If articles are purchased for use on civil aircraft engaged in

foreign trade or trade between the United States and any of its

possessions, state the country in which the aircraft is registered.

(F) Statement that it is understood that if any articles are used

for any purpose other than as stated in the certificate, or are resold

or otherwise disposed of, the person executing the certificate must

notify the manufacturer.

(G) Statement that the certificate shall not be used to purchase

tax-free articles for use as supplies, etc. on pleasure vessels or any

type of aircraft except: (1) Civil aircraft employed in foreign trade

or trade between the United States and any of its possessions; (2)

Aircraft owned by the United States or any foreign country and

constituting a part of the armed forces thereof.

(H) Statement that it is understood that any fraudulent use of the

certificate may subject person executing certificate and all parties

making fraudulent use of the certificate to all applicable criminal

penalties under the Code.

(I) Statement that person executing certificate is prepared to

establish by satisfactory evidence the purpose for which the article(s)

was used.

(J) Date, name, signature, and address of person executing the

certificate.

(iv) ATF I 5600.34. A preprinted certificate, ATF I 5600.34,

Exemption Certificate, is available from the Bureau's Distribution

Center which, when completed, contains all necessary information for a

properly executed certificate. Extra copies of ATF I 5600.34 may be

reproduced as needed.

Par. 7. Section 53.135 is amended by revising paragraph (c)(1) and

by adding paragraph (c)(3) to read as follows:

Sec. 53.135 Tax-free sale of articles to State and local governments

for their exclusive use.

* * * * *

(c) * * *

(1) In the case of a State or local government which is registered

(see Sec. 53.141 for provisions under which a State or local government

may register if it so desires), the provisions of

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paragraph (c) of Sec. 53.131 have application as to the evidence

required in support of tax-free sales. If a State or local government

is not registered, the evidence required in support of a tax-free sale

to the State or local government shall, except as provided in paragraph

(c)(2) of this section, consist of a certificate, executed and signed

by an officer or employee authorized by the State or local government

to execute and sign the certificate. If it is impracticable to furnish

a separate certificate for each order or contract because of frequency

of purchases, a certificate covering all orders between given dates

(such period not to exceed 12 calendar quarters) will be acceptable.

The certificates and proper records of invoices, orders, etc., relative

to tax-free sales must be retained by the manufacturer as provided in

Sec. 53.24(d). A certificate of exemption to support tax-free sales

under this section must contain the following:

(i) Title of official executing certificate, branch of government,

date executed, and statement that official is authorized to execute

certificate.

(ii) List articles covered by the certificate or beginning and

ending dates during which orders will be placed by the purchaser

(period not to exceed 12 calendar quarters).

(iii) Name of manufacturer from which articles purchased.

(iv) Governmental unit purchasing articles.

(v) Statement that is understood that articles purchased under this

certificate of exemption are limited to use exclusively by the

purchasing governmental entity.

(vi) Statement that is understood that any fraudulent use of this

certificate may subject the person executing the certificate and all

parties making fraudulent use of the certificate to all applicable

criminal penalties under the Code.

(vii) Name, address, and signature of person executing the

certificate.

(2) * * *

(3) ATF I 5600.35. A preprinted certificate, ATF I 5600.35,

Exemption Certificate, is available from the Bureau's Distribution

Center which, when completed, contains all necessary information for a

properly executed certificate. Extra copies of ATF I 5600.35 may be

reproduced as needed.

* * * * *

Par. 8. Section 53.179 is amended by revising paragraph (b)(1)(iii)

and by adding paragraph (b)(1)(iv) to read as follows:

Sec. 53.179 Supporting evidence required in case of manufacturers tax

involving exportations, uses, sales, or resales.

* * * * *

(b) * * *

(1) * * *

(iii) Certificate of ultimate vendor. Any certificate executed and

signed by an ultimate vendor as evidence to be retained by the person

who paid the tax as provided in paragraph (a)(4) of this section may be

executed with respect to any one or more overpayments by the person

which arose under section 6416(b)(2) and Sec. 53.178 by reason of

exportations, uses, sales or resales, occurring within any period of

not more than 12 consecutive calendar quarters, the beginning and

ending dates of which are specified in the certificate. A certificate

supporting a claim for credit or refund under this section shall

contain the following:

(A) Name of ultimate vendor if other than person executing the

certificate.

(B) Statement that article(s) was purchased by the ultimate vendor

tax-paid and was thereafter exported, used, sold, or resold.

(C) Description of proof which supports exportation or certificate

as to use executed by ultimate purchaser.

(D) Statement that ultimate vendor retains such proof for 3 years

from the date of the statement and will, upon request, supply such

proof at any time within such 3 year period to the taxpayer to

establish that credit or refund is due in respect of the article.

(E) Statement that to the best knowledge and belief of the person

executing the certificate, no statement in respect of the proof of

exportation or certificate has previously been executed and that the

person executing the certificate understands that any fraudulent use of

the certificate may subject the person executing the certificate or any

other party to all applicable criminal penalties under the Code.

(F) Name, title, address and signature of person executing

certificate and date signed.

(G) Description of all articles covered by the certificate, with

the corresponding vendor's invoice number, date of resale of article,

quantity, whether articles were exported or used and the use made of

article or to be made of article.

(iv) ATF I 5600.33. ATF I 5600.33, Statement of Ultimate Vendor, is

available from the Bureau's Distribution Center which, when completed,

contains all necessary information for a properly executed certificate.

Additional copies may be reproduced as needed.

* * * * *

Signed: May 30, 1996.

Bradley A. Buckles,

Acting Director.

Approved: June 10, 1996.

John P. Simpson,

Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).

[FR Doc. 96-17995 Filed 7-15-96; 8:45 am]

BILLING CODE 4810-31-P