Highway Use Tax; Sold Vehicles and Electronic Filing; Taxable Period Beginning July 1, 2011, 64313-64317 [2014-25558]

Download as PDF Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Rules and Regulations § 232.301 EDGAR Filer Manual. DEPARTMENT OF THE TREASURY Filers must prepare electronic filings in the manner prescribed by the EDGAR Filer Manual, promulgated by the Commission, which sets out the technical formatting requirements for electronic submissions. The requirements for becoming an EDGAR Filer and updating company data are set forth in the updated EDGAR Filer Manual, Volume I: ‘‘General Information,’’ Version 18 (October 2014). The requirements for filing on EDGAR are set forth in the updated EDGAR Filer Manual, Volume II: ‘‘EDGAR Filing,’’ Version 28 (October 2014). Additional provisions applicable to Form N–SAR filers are set forth in the EDGAR Filer Manual, Volume III: ‘‘N–SAR Supplement,’’ Version 4 (October 2014). All of these provisions have been incorporated by reference into the Code of Federal Regulations, which action was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR Part 51. You must comply with these requirements in order for documents to be timely received and accepted. The EDGAR Filer Manual is available for Web site viewing and printing; the address for the Filer Manual is http://www.sec.gov/info/ edgar.shtml. You can obtain paper copies of the EDGAR Filer Manual from the following address: Public Reference Room, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. You can also inspect the document at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to: http:// www.archives.gov/federal_register/ code_of_federal_regulations/ibr_ locations.html. By the Commission. Dated: October 20, 2014. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25536 Filed 10–28–14; 8:45 am] rmajette on DSK2TPTVN1PROD with RULES BILLING CODE 8011–01–P VerDate Sep<11>2014 13:58 Oct 28, 2014 Jkt 235001 Internal Revenue Service 26 CFR Part 41 [TD 9698] RIN 1545–BG63; RIN 1545–BK35 Highway Use Tax; Sold Vehicles and Electronic Filing; Taxable Period Beginning July 1, 2011 Internal Revenue Service (IRS), Treasury. ACTION: Final regulations and removal of temporary regulations. AGENCY: This document contains final regulations that provide guidance on the mandatory electronic filing of Form 2290, ‘‘Heavy Highway Vehicle Use Tax Return,’’ for 25 or more vehicles; credits or refunds for sold, destroyed, or stolen vehicles; and the tax liability and computation of tax on the use of certain second-hand vehicles. The regulations affect owners and operators of highway motor vehicles with a taxable gross weight of 55,000 pounds or more. These final regulations also remove the temporary regulations that provide guidance on the filing of Form 2290 and payment of the associated highway use tax for the taxable period beginning July 1, 2011. DATES: Effective Date: These regulations are effective on July 1, 2015. Applicability Date: For dates of applicability, see §§ 41.4481–1(e), 41.4481–2(c), 41.6001–2(e), 41.6011(a)– 1(d), 41.6071(a)–1(d), and 41.6151(a)– 1(b). FOR FURTHER INFORMATION CONTACT: Natalie Payne, (202) 317–5262 (not a toll-free number). SUPPLEMENTARY INFORMATION: SUMMARY: Background and Explanation of Provisions This document amends the Highway Use Tax Regulations (26 CFR Part 41) under sections 4481, 4483, 6001, 6071, and 6151 of the Internal Revenue Code (Code). Section 4481(a) of the Code imposes an annual tax on the use of highway vehicles with a taxable gross weight of 55,000 pounds or more. Under paragraphs (c)(2) and (c)(4) of section 4482, the taxable period generally runs from July 1 through the following June 30. Section 867 of the American Jobs Creation Act of 2004, Public Law 108– 357 (118 Stat. 1418 (2004)), (1) added new section 4481(e), which requires electronic filing of a return reporting tax on the use of 25 or more highway motor PO 00000 Frm 00017 Fmt 4700 Sfmt 4700 64313 vehicles, (2) modified section 4481(c)(2) to allow a proration of the tax for vehicles that are sold, and (3) repealed section 6156, eliminating the ability to pay the tax in installments. On January 16, 2009, the IRS and the Treasury Department published a notice of proposed rulemaking (REG–116699– 07, 74 FR 2910) (NPRM 1) in the Federal Register. The NPRM 1 provides proposed guidance on mandatory electronic filing of Form 2290, ‘‘Heavy Highway Vehicle Use Tax Return,’’ for 25 or more vehicles. Specifically, NPRM 1 provides that submitting a Form 2290 on paper for 25 or more vehicles constitutes a failure to file for purposes of the penalty under section 6651. In addition, NPRM 1 provides that if a taxpayer is required to file Form 2290 electronically and fails to do so, the IRS will not return to the taxpayer a receipted Schedule 1 (Form 2290), which is necessary to register the vehicle with a State. The NPRM 1 also revises existing regulations to administer the credits and refunds resulting from a statutory overpayment of tax upon the sale of a vehicle, and it clarifies that the triggering event for overpayments is the sale, destruction, or theft of a vehicle. In addition, NPRM 1 clarifies the tax liability and computation of tax upon the first taxable use of a second-hand vehicle for which there was a prior taxable use during the tax period. The IRS and the Treasury Department received one written comment in response to NPRM 1. No public hearing was requested or held. On July 20, 2011, the IRS and the Treasury Department published final and temporary regulations (TD 9537, 76 FR 43121) (the Temporary Regulations) in the Federal Register. The same day, the IRS and the Treasury Department published a notice of proposed rulemaking (REG–122813–11, 76 FR 43225) (NPRM 2) by cross-reference to the Temporary Regulations in the Federal Register. At the time the IRS and the Treasury Department published NPRM 2, the highway use tax was scheduled to expire at the close of September 30, 2011, which would have resulted in a short taxable period for the taxable period beginning on July 1, 2011 (the effective date of the tax has since been statutorily extended through September 30, 2017). The Temporary Regulations provide guidance on the filing of Form 2290 and the payment of the associated highway use tax for the taxable period beginning July 1, 2011. Specifically, the Temporary Regulations postponed the deadline by which a taxpayer must file a Form 2290 return for taxable uses during the taxable E:\FR\FM\29OCR1.SGM 29OCR1 64314 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Rules and Regulations rmajette on DSK2TPTVN1PROD with RULES period beginning July 1, 2011, to November 30, 2011. Further, the Temporary Regulations discouraged the filing of a Form 2290, or submission of associated payment, before November 1, 2011, for taxable uses during the taxable period beginning July 1, 2011. No comments were received in response to NPRM 2, and no public hearing was requested or held. These final regulations adopt NPRM 1 with two substantive changes (described in the next paragraph). In addition, the IRS and the Treasury Department have made certain nonsubstantive changes to the regulatory text, including minor wording changes, to improve the clarity and readability of the final regulations. To reduce the burden on small business, the final regulations remove the proposals in NPRM 1 related to the effect of a failure to file a Form 2290 electronically for 25 or more vehicles. Thus, under the final regulations, the filing of a Form 2290 on paper for 25 or more vehicles does not constitute a failure to file for purposes of the penalty under section 6651, and the IRS will not withhold from the taxpayer a receipted Schedule 1 (Form 2290). The IRS and the Treasury Department continue to consider ways to ensure compliance with the electronic filing requirement in section 4481(e). Accordingly, the IRS and the Treasury Department request comments on how to enforce the electronic filing requirement in a manner that does not unduly burden taxpayers. Comments on this issue should be submitted in writing and can be mailed to the Office of Associate Chief Counsel (Passthroughs and Special Industries), Re: REG–116699– 07, CC:PSI:B7, Room 5314, 1111 Constitution Avenue NW., Washington, DC 20224. All comments received will be available for public inspection at http://www.regulations.gov (IRS REG– 116699–07). These final regulations do not adopt NPRM 2 because the period to which NPRM 2 applies has ended. In addition, these final regulations remove the Temporary Regulations. Summary of Comment The comment received in response to NPRM 1 suggested that the IRS modify its rule under § 41.6001–2(b)(2)(ii) relating to the registration of highway motor vehicles. Under § 41.6001– 2(b)(2)(ii), a State that registers vehicles other than on the basis of gross weight must require proof of payment in order to register a highway motor vehicle, unless the State receives a written statement providing that during the taxable period that includes the date on which the State receives the application VerDate Sep<11>2014 13:58 Oct 28, 2014 Jkt 235001 for registration, the vehicle had a taxable gross weight of less than 55,000 pounds. The commenter noted that many highway motor vehicles in the gross weight range of 8,000 to 54,999 pounds are used in the same manner each year and never reach a gross weight of 55,000 pounds. The commenter suggested that owners of vehicles in the 8,000 to 54,999 pound range be allowed to declare at the initial vehicle registration that the gross weight of the highway motor vehicle is not expected to ever reach 55,000 pounds, provided the owner also certifies that if the gross weight of the vehicle ever reaches a gross weight of 55,000 pounds or more the owner will make timely payments of any highway vehicle use tax due. The final regulations do not adopt the change proposed by the commenter. The IRS and the Treasury Department have determined that the written statement required by § 41.6001–2(b)(2)(ii) provides information that is essential to the effective and efficient administration of the tax under section 4481 without unduly burdening taxpayers. Special Analyses It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this regulation will not have a significant economic impact on a substantial number of small entities. The regulations affect owners and operators of highway motor vehicles with a taxable gross weight of 55,000 pounds or more, some of which may be small entities. Although a substantial number of small entities may be subject to the requirements of this rule, any economic impact is minimal. The regulations provide guidance for claiming a refund or credit when a vehicle is sold during the tax year. Specifically, the regulations provide that the claim must be made on Form 2290 or Form 8849, ‘‘Claim for Refund of Excise Taxes.’’ The information to complete these forms is readily available to the taxpayer and the forms take little time to complete. Without the claim information, the IRS could not determine taxpayer eligibility or determine the accuracy of the claim. Accordingly, these regulations do not PO 00000 Frm 00018 Fmt 4700 Sfmt 4700 impose a collection of information on small entities within the meaning of the Regulatory Flexibility Act and a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Code, NPRM 1 and NPRM 2 were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small entities. No comments were received. Drafting Information The principal author of these regulations is Natalie Payne, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects in 26 CFR Part 41 Excise taxes, Motor vehicles, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 41 is amended as follows: PART 41—EXCISE TAX ON USE OF CERTAIN HIGHWAY MOTOR VEHICLES Paragraph 1. The authority citation for part 41 is revised to read as follows: ■ Authority: 26 U.S.C. 7805. Section 41.4482(b)–1 also issued under 26 U.S.C. 4482(b). Section 41.4483–1 also issued under 26 U.S.C. 4483(a). Section 41.4483–2 also issued under 26 U.S.C. 4483(c). Section 41.4483–3 also issued under 26 U.S.C. 4483(d). Section 41.6001–1 also issued under 26 U.S.C. 6001. Section 41.6001–2 also issued under 26 U.S.C. 6001. Section 41.6001–3 also issued under sec. 507, Public Law 100–17 (101 Stat. 260). Section 41.6011(a)–1 also issued under 26 U.S.C. 6011(a). Section 41.6060–1 also issued under 26 U.S.C. 6060(a). Section 41.6071(a)–1 also issued under 26 U.S.C. 6071 (a). Section 41.6091–1 also issued under 26 U.S.C. 6091(a). Section 41.6101–1 also issued under 26 U.S.C. 6101. Section 41.6109–1 also issued under 26 U.S.C. 6109(a). Section 41.6109–2 also issued under 26 U.S.C. 6109(a). Section 41.6151(a)–1 also issued under 26 U.S.C. 6151(a). Section 41.6695–1 also issued under 26 U.S.C. 6695(b). E:\FR\FM\29OCR1.SGM 29OCR1 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Rules and Regulations Par. 2. Section 41.4481–1 is amended by: ■ 1. Revising the section heading. ■ 2. Removing the third sentence from paragraph (b). ■ 3. Adding headings to paragraphs (c)(1), (c)(2), and (c)(3). ■ 4. In the introductory text of paragraph (c)(1), removing the language ‘‘Except as provided in paragraph (c)(2) of this section’’ and adding in its place ‘‘Except as otherwise provided in this paragraph (c)’’. ■ 5. Revising paragraphs (c)(4) and (c)(5). ■ 6. Removing paragraphs (c)(6) and (d). ■ 7. Redesignating paragraph (e) as paragraph (d) and revising the introductory text in newly-redesignated paragraph (d). ■ 8. In newly-redesignated paragraph (d), revising Example (3) and adding Example (4). ■ 9. Adding new paragraph (e). The revisions and additions read as follows: ■ § 41.4481–1 of tax. Imposition and computation rmajette on DSK2TPTVN1PROD with RULES * * * * * (c) * * * (1) In general. * * * * * * * * (2) Certain prorated taxable periods. * * * (3) Increase in taxable gross weight during the taxable period. * * * (4) Prorated taxable period for sold, destroyed, or stolen vehicles—(i) In general. The tax on a taxpayer’s use of a highway vehicle for a taxable period is determined under paragraph (c)(4)(ii) of this section if— (A) The vehicle is destroyed or stolen before the first day of the last month in the taxable period and is not later used by the taxpayer during the period; or (B) The taxpayer sells the vehicle before the first day of the last month in the taxable period and does not later use the vehicle during the period. (ii) Computation of tax. If the tax on a taxpayer’s use of a highway vehicle for a taxable period is determined under this paragraph (c)(4)(ii), the tax is computed by multiplying the amount of tax that would be due for a full taxable period, as computed under paragraph (c)(1) of this section, by a fraction. The fraction has as its numerator the number of months in the period from the first day of the month in the period in which the first taxable use of the highway motor vehicle occurs to and including the last day of the month in which the highway motor vehicle was sold, destroyed, or stolen, and as its denominator the number of months in the entire taxable period. (See paragraph (d) Example (3)(i) of this section.) VerDate Sep<11>2014 13:58 Oct 28, 2014 Jkt 235001 (iii) Overpayment. If a taxpayer’s liability for the tax on the use of a highway vehicle for a taxable period is determined under paragraph (c)(4)(ii) of this section, any tax the taxpayer paid under section 4481(a) on the use of the vehicle for such period in excess of the tax calculated under paragraph (c)(4)(ii) of this section is an overpayment of tax. (iv) Definition of destroyed vehicle. For purposes of this paragraph (c)(4), a highway motor vehicle is destroyed if the vehicle is damaged due to an accident or other casualty to such an extent that it is not economical to rebuild. (v) Form and content of claim. A claim for refund of an overpayment described in paragraph (c)(4)(iii) of this section must be made on Form 8849, ‘‘Claim for Refund of Excise Taxes’’ (or such other form as the Commissioner may designate) in accordance with the instructions for that form. A claim for a credit must be made on Form 2290, ‘‘Heavy Highway Vehicle Use Tax Return’’ (or such other form as the Commissioner may designate) in accordance with the instructions for that form. A claim for refund or credit for any vehicle must include— (A) The vehicle identification number and taxable gross weight of the vehicle; (B) The date of the sale, destruction, or theft of the vehicle; and (C) If the vehicle was sold, the name and address of the purchaser of the vehicle. (vi) Tax on buyer’s use of secondhand vehicles. If a vehicle is sold during the taxable period and a credit or refund of the tax imposed by section 4481 is allowable upon the sale under paragraph (c)(4)(iii) of this section, tax is imposed on the use of the vehicle after the sale and before the end of the taxable period. (See paragraph (c)(4)(vii) of this section for the rules regarding the computation of tax after the sale and before the end of the taxable period.) (vii) Computation of tax on secondhand vehicles. The tax under paragraph (c)(4)(vi) of this section on the use of a vehicle after a sale upon which a credit or refund is allowable is computed by multiplying the amount of tax that would be due for a full taxable period as computed under paragraph (c)(1) of this section by a fraction. The fraction has as its numerator the number of months in the period from the first day of the month in which the first taxable use of the vehicle after the sale occurs (the first day of the month after such month if the first taxable use after the sale occurs in the month of the sale) through the end of the taxable period, and as its denominator the number of months in the entire taxable period. (See PO 00000 Frm 00019 Fmt 4700 Sfmt 4700 64315 paragraph (d) Example (3)(ii) of this section.) (5) Decrease in taxable gross weight, discontinued use, or converted use. The computation of the tax is not affected, and no right to a credit or refund of any tax paid under section 4481 arises, if in any taxable period— (i) The taxable gross weight of a highway motor vehicle is decreased; (ii) The use of a highway motor vehicle is discontinued (for reasons other than sale, destruction, or theft as described in paragraph (c)(4) of this section); or (iii) The highway motor vehicle is converted to a use that is exempt from the tax imposed by section 4481(a). (d) Examples. The application of §§ 41.4481–1, 41.4481–2, and 41.4482(c)–1(c) may be illustrated by the following examples: * * * * * Example (3). (i) In July, X uses a vehicle that is registered in X’s name and has a taxable gross weight of 70,000 pounds. The vehicle is not a logging vehicle. X pays the $430 of tax imposed by section 4481 for the taxable period. On September 2 of the same calendar year, X sells the vehicle to Y. X’s tax is calculated under paragraph (c)(4)(ii) by multiplying the amount of tax that would be due for a full taxable period by a fraction that has as its numerator the number of months in the period from the first day of the month in which X’s first taxable use of the highway motor vehicle occurs to and including the last day of the month in which the vehicle was sold, and as its denominator the number of months in the entire taxable period. Thus, X’s tax for the period is $107.50 (3/12 of $430), and X may claim a credit or refund of $322.50 ($430.00¥$107.50) in accordance with § 41.4481–1(c)(4)(v) after X sells the vehicle. (ii) On September 23, Y uses the vehicle. Y is liable for tax on the use of the vehicle during the taxable period ending June 30 of the following calendar year. Y’s tax is calculated under paragraph (c)(4)(vii) by multiplying the amount of tax that would be due for a full taxable period by a fraction that has as its numerator the number of months in the period from the first day of the month in which Y’s first taxable use of the vehicle after the sale occurs (the first day of the month after such month if the first taxable use after the sale occurs in the month of the sale) through the end of the taxable period, and as its denominator the number of months in the entire taxable period. Y’s first use of the vehicle occurs in the month of the sale. Accordingly, Y’s tax is based on the number of months in the period from the first day of October (the month following the month of the first taxable use) through the end of June, and Y owes a section 4481 tax of $322.50 (9/12 of $430) for the taxable period. Example (4). Assume the same facts as in Example (3)(i), except that on September 2, X sells the vehicle to Dealer, a dealer in highway motor vehicles. X may claim a credit or refund of $322.50. Dealer operates E:\FR\FM\29OCR1.SGM 29OCR1 64316 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Rules and Regulations the vehicle exclusively for the purpose of demonstration, which is not a ‘‘use’’ of the vehicle under § 41.4482(c)–1(c). On May 2 of the following calendar year, Dealer sells the vehicle to Y. Dealer does not owe a section 4481 tax and may not claim a refund. Y’s first taxable use of the vehicle occurs on May 3. Y’s first taxable use of the vehicle does not occur in the month of a sale upon which a credit or refund is allowable. Accordingly, Y’s tax is calculated under paragraph (c)(2) by multiplying the amount of tax that would be due for a full taxable period by a fraction which has as its numerator the number of months in the taxable period beginning with the month of first taxable use and as its denominator the number of months in the entire taxable period. The numerator is the number of months in the period from the first day of May (the month of Y’s first taxable use after the sale) through the end of June, and Y owes a section 4481 tax of $71.67 (2/12 of $430) for the taxable period. (e) Effective/applicability date. This section applies on and after July 1, 2015. For rules applicable before that date, see 26 CFR 41.4481–1 (revised as of April 1, 2014). ■ Par. 3. Section 41.4481–2 is amended by: ■ 1. Removing the language ‘‘or any installment payment of the tax’’ in paragraph (a)(1)(i)(D). ■ 2. Revising paragraph (a)(2) and adding paragraph (a)(3). ■ 3. Adding a sentence at the end of paragraph (b). ■ 4. Revising paragraph (c). The revisions and additions read as follows: rmajette on DSK2TPTVN1PROD with RULES § 41.4481–2 Persons liable for tax. (a) * * * (2) If a vehicle is sold during the taxable period and a credit or refund is allowable upon the sale under § 41.4481–1(c)(4)(iii), paragraph (a)(1) of this section is applied with the following modifications: (i) For purposes of determining the person liable for the tax determined under § 41.4481–1(c)(4)(ii), each reference to a taxable period in paragraph (a)(1) of this section is treated as a reference to the period that begins on the first day of the taxable period in which the vehicle is sold and ends on the date of sale. (ii) For purposes of determining the person liable for the tax determined under § 41.4481–1(c)(4)(vi), each reference to a taxable period in paragraph (a)(1) of this section is treated as a reference to the period that begins on the date of the sale and ends on the last day of the taxable period in which the vehicle is sold. (3) The application of paragraph (a) of this section may be illustrated by Examples (3) and (4) in § 41.4481–1(d). VerDate Sep<11>2014 13:58 Oct 28, 2014 Jkt 235001 (b) * * * For provisions relating to penalties for aiding and abetting an understatement of tax liability, see section 6701 of the Internal Revenue Code. (c) Effective/applicability date. This section applies on and after July 1, 2015. For rules applicable before that date, see 26 CFR 41.4481–2 (revised as of April 1, 2014). ■ Par. 4. Section 41.4483–3 is amended as follows: ■ 1. In the fourth sentence of paragraph (f), removing the language ‘‘to the extent that the tax or an installment payment of the tax has’’ and adding ‘‘(determined in the case of a transfer described in § 41.4481–1(c)(4)(i) under § 41.4481– 1(c)(4)(ii)) to the extent that the tax has’’ in its place. ■ 2. Adding paragraph (i). The addition reads as follows: § 41.4483–3 Exemption for trucks used for 5,000 or fewer miles and agricultural vehicles used for 7,500 or fewer miles on public highways. * * * * * (i) Effective/applicability date. This section applies on and after July 1, 2015. For rules applicable before that date, see 26 CFR 41.4483–3 (revised as of April 1, 2014). § 41.4483–7 ■ [Removed] Par. 5. Section 41.4483–7 is removed. § 41.6001–1 [Amended] Par. 6. Section 41.6001–1 is amended as follows: ■ 1. In the first sentence of paragraph (a), the language ‘‘district director’’ is removed and ‘‘Commissioner’’ is added in its place. ■ 2. In paragraph (a)(3), the language ‘‘In the case of any such vehicle acquired after June 30, 1956, the date’’ is removed and ‘‘The date’’ is added in its place. ■ Par. 7. Section 41.6001–2 is amended by: ■ 1. Removing the third sentence of paragraph (a). ■ 2. In the last sentence of paragraph (a), removing the language ‘‘an application for registration which is mailed will be considered to be received by a State on the date on which it was postmarked’’ and adding in its place ‘‘the rules of section 7502 and § 301.7502–1 of this chapter (relating to timely mailing treated as timely filing) determine when an application for registration is considered to be received by a State’’. ■ 3. Redesignating paragraph (b)(1)(i) as paragraph (b)(1) and revising newlyredesignated paragraph (b)(1) heading. ■ 4. Removing and reserving paragraph (b)(1)(ii). ■ PO 00000 Frm 00020 Fmt 4700 Sfmt 4700 5. Redesignating paragraph (b)(4)(i) as paragraph (b)(4) and revising newlyredesignated paragraph (b)(4) heading. ■ 6. Removing and reserving paragraph (b)(4)(ii). ■ 7. Revising paragraph (c). ■ 8. Adding paragraph (e). The revisions and addition read as follows: ■ § 41.6001–2 Proof of payment for State registration purposes. * * * * * (b) Proof of payment required—(1) In general. * * * * * * * * (4) Registration during certain months * * * * * * * * (c) Proof of payment—(1) In general. The proof of payment required in paragraph (b) of this section consists of a receipted Schedule 1 (Form 2290 ‘‘Heavy Highway Vehicle Use Tax Return’’) that is returned by the Internal Revenue Service, by mail or electronically, to a taxpayer that files a return of tax under section 4481(a), meets the requirements of § 41.6011(a)– 1, and pays the amount of tax due with such return. A photocopy of such receipted Schedule 1 also serves as proof of payment. Such Schedule 1 serves as proof of suspension of such tax under § 41.4483–3 for the number of vehicles entered in that part of the Schedule 1 designated for vehicles for which tax has been suspended. The vehicle identification number of the vehicle being registered must appear on the Schedule 1 (or an attached page) in order for the Schedule 1 to be a valid proof of payment for such vehicle. (2) Acceptable substitute for receipted Schedule 1. For purposes of this section, a State must accept as proof of payment a photocopy of the Form 2290 (with the Schedule 1 attached) that was filed with the Internal Revenue Service for the vehicle being registered with sufficient documentation of payment of tax due at the time the Form 2290 was filed (such as a photocopy of both sides of a cancelled check). This substitute proof of payment may be used to register a vehicle when, for example, the receipted Schedule 1 has been lost, or when at the time required for registration of a vehicle, a receipted Schedule 1 has not been received by a taxpayer who has filed a Form 2290 with respect to such vehicle. * * * * * (e) Effective/applicability date. Paragraph (c) of this section applies to registrations of highway motor vehicles pursuant to applications that are received by a State on or after July 1, E:\FR\FM\29OCR1.SGM 29OCR1 Federal Register / Vol. 79, No. 209 / Wednesday, October 29, 2014 / Rules and Regulations 2015. The rules of section 7502 and § 301.7502–1 of this chapter (relating to timely mailing treated as timely filing) determine when an application for registration is considered to be received by a State. For rules applicable to applications before that date, see 26 CFR 41.6001–2 (revised as of April 1, 2014). § 41.6001–2T [Removed] Par. 8. Section 41.6001–2T is removed. ■ Par. 9. Section 41.6011(a)–1 is amended by adding paragraphs (a)(4), (c) and (d) to read as follows: ■ § 41.6011(a)–1 § 41.6071(a)–1 Returns. rmajette on DSK2TPTVN1PROD with RULES Example 1. A has 100 vehicles registered in its name, all of which have a taxable gross weight in excess of 55,000 pounds. Seventyfive of the vehicles are in use on July 1. Twenty-five are in dead storage as described in § 41.4482(c)–1(c). The vehicles in dead storage are not in use and they are not listed on the Schedule 1. A files Form 2290 electronically for the 75 vehicles in use on July 1 and receives a receipted Schedule 1. On August 23 of the same calendar year, A uses the remaining 25 vehicles. A does not file Form 2290 electronically but uses a paper Form 2290. A has failed to meet the requirements of section 4481(e) for the remaining 25 vehicles. Example 2. Assume the same facts as in Example 1 except that on August 23, A uses 15 of the vehicles that were not used in July. The remaining 10 vehicles are not used in August. A does not file Form 2290 electronically but uses a paper Form 2290. A has correctly filed a return as required by section 4481(e). (d) Effective/applicability date. Paragraphs (a)(4) and (c) of this section apply to returns filed on and after July 1, 2015. For rules applicable before that date, see 26 CFR 41.6011(a)–1 (revised as of April 1, 2014). 13:58 Oct 28, 2014 Jkt 235001 Time for filing returns. * (a) * * * (4) A person that is liable for tax under § 41.4481–2(a)(1)(i)(A), (B), (C), or (D), after taking into account the modification required under § 41.4481– 2(a)(2), is treated as liable for tax by the same provision of § 41.4481–2(a)(1)(i) for purposes of this section and must file a return. * * * * * (c) Required use of electronic filing— (1) In general. A person that files any return reporting 25 or more vehicles must file the return electronically, as prescribed by the Commissioner. For this purpose, the number of vehicles reported on a return is the total number of vehicles for which tax is reported and does not include vehicles for which a suspension of tax is claimed. (2) Examples. The application of this paragraph (c) may be illustrated by the following examples: VerDate Sep<11>2014 Par. 10. Section 41.6071(a)–1 is amended as follows: ■ 1. In paragraph (a) introductory text, the language ‘‘paragraph (b) or paragraph (c)’’ is removed and ‘‘paragraph (b)’’ is added in its place. ■ 2. Revising paragraph (c). ■ 3. Adding paragraph (d). The additions and revision read as follows: ■ * * * * (c) Effect of sale during taxable period. A person that is liable for tax under § 41.4481–2(a)(1)(i)(A), (B), (C), or (D) after taking into account the modification required under § 41.4481– 2(a)(2) is treated as liable for tax under the same provision of § 41.4481– 2(a)(1)(i) for purposes of this section. (d) Effective/applicability date. Paragraph (c) of this section applies on and after July 1, 2015. For rules applicable before that date, see 26 CFR 41.6071(a)–1 (revised as of April 1, 2014). § 41.6071(a)–1T [Removed] Par. 11. Section 41.6071(a)–1T is removed. ■ § 41.6151(a)–1 [Revised] Par. 12. Section 41.6151(a)–1 is revised to read as follows: ■ § 41.6151(a)–1 tax. Time and place for paying (a) In general. The tax must be paid at the time prescribed in § 41.6071(a)–1 for filing the return and at the place prescribed in § 41.6091–1 for filing the return. (b) Effective/applicability date. This section applies on and after July 1, 2015. For rules applicable before that date, see 26 CFR 41.6151(a)–1 and 41.6151(a)–1T (revised as of April 1, 2014). § 41.6151(a)–1T [Removed] Par. 13. Section 41.6151(a)–1T is removed. ■ § 41.6156–1 [Removed] Par. 14. Section 41.6156–1 is removed. ■ John Dalrymple, Deputy Commissioner for Services and Enforcement. Approved: September 9, 2014. Mark J. Mazur, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2014–25558 Filed 10–28–14; 8:45 am] BILLING CODE 4830–01–P PO 00000 Frm 00021 Fmt 4700 Sfmt 4700 64317 ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA–HQ–OPP–2013–0729; FRL–9917–15] Paraquat Dichloride; Pesticide Tolerance Environmental Protection Agency (EPA). ACTION: Final rule. AGENCY: This regulation establishes a tolerance for residues of paraquat dichloride in or on the tuberous and corm vegetables subgroup 1C. Interregional Research Project Number 4 (IR–4) requested this tolerance under the Federal Food, Drug, and Cosmetic Act (FFDCA). DATES: This regulation is effective October 29, 2014. Objections and requests for hearings must be received on or before December 29, 2014, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION). ADDRESSES: The docket for this action, identified by docket identification (ID) number EPA–HQ–OPP–2013–0729, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460–0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566–1744, and the telephone number for the OPP Docket is (703) 305–5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets. FOR FURTHER INFORMATION CONTACT: Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; main telephone number: (703) 305–7090; email address: RDFRNotices@epa.gov. SUPPLEMENTARY INFORMATION: SUMMARY: I. General Information A. Does this action apply to me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather E:\FR\FM\29OCR1.SGM 29OCR1

Agencies

[Federal Register Volume 79, Number 209 (Wednesday, October 29, 2014)]
[Rules and Regulations]
[Pages 64313-64317]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-25558]


=======================================================================
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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 41

[TD 9698]
RIN 1545-BG63; RIN 1545-BK35


Highway Use Tax; Sold Vehicles and Electronic Filing; Taxable 
Period Beginning July 1, 2011

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

-----------------------------------------------------------------------

SUMMARY: This document contains final regulations that provide guidance 
on the mandatory electronic filing of Form 2290, ``Heavy Highway 
Vehicle Use Tax Return,'' for 25 or more vehicles; credits or refunds 
for sold, destroyed, or stolen vehicles; and the tax liability and 
computation of tax on the use of certain second-hand vehicles. The 
regulations affect owners and operators of highway motor vehicles with 
a taxable gross weight of 55,000 pounds or more. These final 
regulations also remove the temporary regulations that provide guidance 
on the filing of Form 2290 and payment of the associated highway use 
tax for the taxable period beginning July 1, 2011.

DATES: Effective Date: These regulations are effective on July 1, 2015.
    Applicability Date: For dates of applicability, see Sec. Sec.  
41.4481-1(e), 41.4481-2(c), 41.6001-2(e), 41.6011(a)-1(d), 41.6071(a)-
1(d), and 41.6151(a)-1(b).

FOR FURTHER INFORMATION CONTACT: Natalie Payne, (202) 317-5262 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    This document amends the Highway Use Tax Regulations (26 CFR Part 
41) under sections 4481, 4483, 6001, 6071, and 6151 of the Internal 
Revenue Code (Code).
    Section 4481(a) of the Code imposes an annual tax on the use of 
highway vehicles with a taxable gross weight of 55,000 pounds or more. 
Under paragraphs (c)(2) and (c)(4) of section 4482, the taxable period 
generally runs from July 1 through the following June 30.
    Section 867 of the American Jobs Creation Act of 2004, Public Law 
108-357 (118 Stat. 1418 (2004)), (1) added new section 4481(e), which 
requires electronic filing of a return reporting tax on the use of 25 
or more highway motor vehicles, (2) modified section 4481(c)(2) to 
allow a proration of the tax for vehicles that are sold, and (3) 
repealed section 6156, eliminating the ability to pay the tax in 
installments.
    On January 16, 2009, the IRS and the Treasury Department published 
a notice of proposed rulemaking (REG-116699-07, 74 FR 2910) (NPRM 1) in 
the Federal Register. The NPRM 1 provides proposed guidance on 
mandatory electronic filing of Form 2290, ``Heavy Highway Vehicle Use 
Tax Return,'' for 25 or more vehicles. Specifically, NPRM 1 provides 
that submitting a Form 2290 on paper for 25 or more vehicles 
constitutes a failure to file for purposes of the penalty under section 
6651. In addition, NPRM 1 provides that if a taxpayer is required to 
file Form 2290 electronically and fails to do so, the IRS will not 
return to the taxpayer a receipted Schedule 1 (Form 2290), which is 
necessary to register the vehicle with a State.
    The NPRM 1 also revises existing regulations to administer the 
credits and refunds resulting from a statutory overpayment of tax upon 
the sale of a vehicle, and it clarifies that the triggering event for 
overpayments is the sale, destruction, or theft of a vehicle. In 
addition, NPRM 1 clarifies the tax liability and computation of tax 
upon the first taxable use of a second-hand vehicle for which there was 
a prior taxable use during the tax period.
    The IRS and the Treasury Department received one written comment in 
response to NPRM 1. No public hearing was requested or held.
    On July 20, 2011, the IRS and the Treasury Department published 
final and temporary regulations (TD 9537, 76 FR 43121) (the Temporary 
Regulations) in the Federal Register. The same day, the IRS and the 
Treasury Department published a notice of proposed rulemaking (REG-
122813-11, 76 FR 43225) (NPRM 2) by cross-reference to the Temporary 
Regulations in the Federal Register. At the time the IRS and the 
Treasury Department published NPRM 2, the highway use tax was scheduled 
to expire at the close of September 30, 2011, which would have resulted 
in a short taxable period for the taxable period beginning on July 1, 
2011 (the effective date of the tax has since been statutorily extended 
through September 30, 2017). The Temporary Regulations provide guidance 
on the filing of Form 2290 and the payment of the associated highway 
use tax for the taxable period beginning July 1, 2011. Specifically, 
the Temporary Regulations postponed the deadline by which a taxpayer 
must file a Form 2290 return for taxable uses during the taxable

[[Page 64314]]

period beginning July 1, 2011, to November 30, 2011. Further, the 
Temporary Regulations discouraged the filing of a Form 2290, or 
submission of associated payment, before November 1, 2011, for taxable 
uses during the taxable period beginning July 1, 2011. No comments were 
received in response to NPRM 2, and no public hearing was requested or 
held.
    These final regulations adopt NPRM 1 with two substantive changes 
(described in the next paragraph). In addition, the IRS and the 
Treasury Department have made certain nonsubstantive changes to the 
regulatory text, including minor wording changes, to improve the 
clarity and readability of the final regulations.
    To reduce the burden on small business, the final regulations 
remove the proposals in NPRM 1 related to the effect of a failure to 
file a Form 2290 electronically for 25 or more vehicles. Thus, under 
the final regulations, the filing of a Form 2290 on paper for 25 or 
more vehicles does not constitute a failure to file for purposes of the 
penalty under section 6651, and the IRS will not withhold from the 
taxpayer a receipted Schedule 1 (Form 2290). The IRS and the Treasury 
Department continue to consider ways to ensure compliance with the 
electronic filing requirement in section 4481(e). Accordingly, the IRS 
and the Treasury Department request comments on how to enforce the 
electronic filing requirement in a manner that does not unduly burden 
taxpayers. Comments on this issue should be submitted in writing and 
can be mailed to the Office of Associate Chief Counsel (Passthroughs 
and Special Industries), Re: REG-116699-07, CC:PSI:B7, Room 5314, 1111 
Constitution Avenue NW., Washington, DC 20224. All comments received 
will be available for public inspection at http://www.regulations.gov 
(IRS REG-116699-07).
    These final regulations do not adopt NPRM 2 because the period to 
which NPRM 2 applies has ended. In addition, these final regulations 
remove the Temporary Regulations.

Summary of Comment

    The comment received in response to NPRM 1 suggested that the IRS 
modify its rule under Sec.  41.6001-2(b)(2)(ii) relating to the 
registration of highway motor vehicles. Under Sec.  41.6001-
2(b)(2)(ii), a State that registers vehicles other than on the basis of 
gross weight must require proof of payment in order to register a 
highway motor vehicle, unless the State receives a written statement 
providing that during the taxable period that includes the date on 
which the State receives the application for registration, the vehicle 
had a taxable gross weight of less than 55,000 pounds. The commenter 
noted that many highway motor vehicles in the gross weight range of 
8,000 to 54,999 pounds are used in the same manner each year and never 
reach a gross weight of 55,000 pounds. The commenter suggested that 
owners of vehicles in the 8,000 to 54,999 pound range be allowed to 
declare at the initial vehicle registration that the gross weight of 
the highway motor vehicle is not expected to ever reach 55,000 pounds, 
provided the owner also certifies that if the gross weight of the 
vehicle ever reaches a gross weight of 55,000 pounds or more the owner 
will make timely payments of any highway vehicle use tax due.
    The final regulations do not adopt the change proposed by the 
commenter. The IRS and the Treasury Department have determined that the 
written statement required by Sec.  41.6001-2(b)(2)(ii) provides 
information that is essential to the effective and efficient 
administration of the tax under section 4481 without unduly burdening 
taxpayers.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866, as 
supplemented by Executive Order 13563. Therefore, a regulatory 
assessment is not required. It has also been determined that section 
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does 
not apply to these regulations. Pursuant to the Regulatory Flexibility 
Act (5 U.S.C. chapter 6), it is hereby certified that this regulation 
will not have a significant economic impact on a substantial number of 
small entities. The regulations affect owners and operators of highway 
motor vehicles with a taxable gross weight of 55,000 pounds or more, 
some of which may be small entities. Although a substantial number of 
small entities may be subject to the requirements of this rule, any 
economic impact is minimal. The regulations provide guidance for 
claiming a refund or credit when a vehicle is sold during the tax year. 
Specifically, the regulations provide that the claim must be made on 
Form 2290 or Form 8849, ``Claim for Refund of Excise Taxes.'' The 
information to complete these forms is readily available to the 
taxpayer and the forms take little time to complete. Without the claim 
information, the IRS could not determine taxpayer eligibility or 
determine the accuracy of the claim. Accordingly, these regulations do 
not impose a collection of information on small entities within the 
meaning of the Regulatory Flexibility Act and a regulatory flexibility 
analysis is not required.
    Pursuant to section 7805(f) of the Code, NPRM 1 and NPRM 2 were 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on their impact on small entities. No 
comments were received.

Drafting Information

    The principal author of these regulations is Natalie Payne, Office 
of the Associate Chief Counsel (Passthroughs and Special Industries). 
However, other personnel from the IRS and the Treasury Department 
participated in their development.

List of Subjects in 26 CFR Part 41

    Excise taxes, Motor vehicles, Reporting and recordkeeping 
requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 41 is amended as follows:

PART 41--EXCISE TAX ON USE OF CERTAIN HIGHWAY MOTOR VEHICLES

0
Paragraph 1. The authority citation for part 41 is revised to read as 
follows:

    Authority:  26 U.S.C. 7805.

    Section 41.4482(b)-1 also issued under 26 U.S.C. 4482(b).
    Section 41.4483-1 also issued under 26 U.S.C. 4483(a).
    Section 41.4483-2 also issued under 26 U.S.C. 4483(c).
    Section 41.4483-3 also issued under 26 U.S.C. 4483(d).
    Section 41.6001-1 also issued under 26 U.S.C. 6001.
    Section 41.6001-2 also issued under 26 U.S.C. 6001.
    Section 41.6001-3 also issued under sec. 507, Public Law 100-17 
(101 Stat. 260).
    Section 41.6011(a)-1 also issued under 26 U.S.C. 6011(a).
    Section 41.6060-1 also issued under 26 U.S.C. 6060(a).
    Section 41.6071(a)-1 also issued under 26 U.S.C. 6071 (a).
    Section 41.6091-1 also issued under 26 U.S.C. 6091(a).
    Section 41.6101-1 also issued under 26 U.S.C. 6101.
    Section 41.6109-1 also issued under 26 U.S.C. 6109(a).
    Section 41.6109-2 also issued under 26 U.S.C. 6109(a).
    Section 41.6151(a)-1 also issued under 26 U.S.C. 6151(a).
    Section 41.6695-1 also issued under 26 U.S.C. 6695(b).


[[Page 64315]]



0
Par. 2. Section 41.4481-1 is amended by:
0
1. Revising the section heading.
0
2. Removing the third sentence from paragraph (b).
0
3. Adding headings to paragraphs (c)(1), (c)(2), and (c)(3).
0
4. In the introductory text of paragraph (c)(1), removing the language 
``Except as provided in paragraph (c)(2) of this section'' and adding 
in its place ``Except as otherwise provided in this paragraph (c)''.
0
5. Revising paragraphs (c)(4) and (c)(5).
0
6. Removing paragraphs (c)(6) and (d).
0
7. Redesignating paragraph (e) as paragraph (d) and revising the 
introductory text in newly-redesignated paragraph (d).
0
8. In newly-redesignated paragraph (d), revising Example (3) and adding 
Example (4).
0
9. Adding new paragraph (e).
    The revisions and additions read as follows:


Sec.  41.4481-1  Imposition and computation of tax.

* * * * *
    (c) * * *
    (1) In general. * * *
* * * * *
    (2) Certain prorated taxable periods. * * *
    (3) Increase in taxable gross weight during the taxable period. * * 
*
    (4) Prorated taxable period for sold, destroyed, or stolen 
vehicles--(i) In general. The tax on a taxpayer's use of a highway 
vehicle for a taxable period is determined under paragraph (c)(4)(ii) 
of this section if--
    (A) The vehicle is destroyed or stolen before the first day of the 
last month in the taxable period and is not later used by the taxpayer 
during the period; or
    (B) The taxpayer sells the vehicle before the first day of the last 
month in the taxable period and does not later use the vehicle during 
the period.
    (ii) Computation of tax. If the tax on a taxpayer's use of a 
highway vehicle for a taxable period is determined under this paragraph 
(c)(4)(ii), the tax is computed by multiplying the amount of tax that 
would be due for a full taxable period, as computed under paragraph 
(c)(1) of this section, by a fraction. The fraction has as its 
numerator the number of months in the period from the first day of the 
month in the period in which the first taxable use of the highway motor 
vehicle occurs to and including the last day of the month in which the 
highway motor vehicle was sold, destroyed, or stolen, and as its 
denominator the number of months in the entire taxable period. (See 
paragraph (d) Example (3)(i) of this section.)
    (iii) Overpayment. If a taxpayer's liability for the tax on the use 
of a highway vehicle for a taxable period is determined under paragraph 
(c)(4)(ii) of this section, any tax the taxpayer paid under section 
4481(a) on the use of the vehicle for such period in excess of the tax 
calculated under paragraph (c)(4)(ii) of this section is an overpayment 
of tax.
    (iv) Definition of destroyed vehicle. For purposes of this 
paragraph (c)(4), a highway motor vehicle is destroyed if the vehicle 
is damaged due to an accident or other casualty to such an extent that 
it is not economical to rebuild.
    (v) Form and content of claim. A claim for refund of an overpayment 
described in paragraph (c)(4)(iii) of this section must be made on Form 
8849, ``Claim for Refund of Excise Taxes'' (or such other form as the 
Commissioner may designate) in accordance with the instructions for 
that form. A claim for a credit must be made on Form 2290, ``Heavy 
Highway Vehicle Use Tax Return'' (or such other form as the 
Commissioner may designate) in accordance with the instructions for 
that form. A claim for refund or credit for any vehicle must include--
    (A) The vehicle identification number and taxable gross weight of 
the vehicle;
    (B) The date of the sale, destruction, or theft of the vehicle; and
    (C) If the vehicle was sold, the name and address of the purchaser 
of the vehicle.
    (vi) Tax on buyer's use of second-hand vehicles. If a vehicle is 
sold during the taxable period and a credit or refund of the tax 
imposed by section 4481 is allowable upon the sale under paragraph 
(c)(4)(iii) of this section, tax is imposed on the use of the vehicle 
after the sale and before the end of the taxable period. (See paragraph 
(c)(4)(vii) of this section for the rules regarding the computation of 
tax after the sale and before the end of the taxable period.)
    (vii) Computation of tax on second-hand vehicles. The tax under 
paragraph (c)(4)(vi) of this section on the use of a vehicle after a 
sale upon which a credit or refund is allowable is computed by 
multiplying the amount of tax that would be due for a full taxable 
period as computed under paragraph (c)(1) of this section by a 
fraction. The fraction has as its numerator the number of months in the 
period from the first day of the month in which the first taxable use 
of the vehicle after the sale occurs (the first day of the month after 
such month if the first taxable use after the sale occurs in the month 
of the sale) through the end of the taxable period, and as its 
denominator the number of months in the entire taxable period. (See 
paragraph (d) Example (3)(ii) of this section.)
    (5) Decrease in taxable gross weight, discontinued use, or 
converted use. The computation of the tax is not affected, and no right 
to a credit or refund of any tax paid under section 4481 arises, if in 
any taxable period--
    (i) The taxable gross weight of a highway motor vehicle is 
decreased;
    (ii) The use of a highway motor vehicle is discontinued (for 
reasons other than sale, destruction, or theft as described in 
paragraph (c)(4) of this section); or
    (iii) The highway motor vehicle is converted to a use that is 
exempt from the tax imposed by section 4481(a).
    (d) Examples. The application of Sec. Sec.  41.4481-1, 41.4481-2, 
and 41.4482(c)-1(c) may be illustrated by the following examples:
* * * * *
    Example (3).  (i) In July, X uses a vehicle that is registered 
in X's name and has a taxable gross weight of 70,000 pounds. The 
vehicle is not a logging vehicle. X pays the $430 of tax imposed by 
section 4481 for the taxable period. On September 2 of the same 
calendar year, X sells the vehicle to Y. X's tax is calculated under 
paragraph (c)(4)(ii) by multiplying the amount of tax that would be 
due for a full taxable period by a fraction that has as its 
numerator the number of months in the period from the first day of 
the month in which X's first taxable use of the highway motor 
vehicle occurs to and including the last day of the month in which 
the vehicle was sold, and as its denominator the number of months in 
the entire taxable period. Thus, X's tax for the period is $107.50 
(3/12 of $430), and X may claim a credit or refund of $322.50 
($430.00-$107.50) in accordance with Sec.  41.4481-1(c)(4)(v) after 
X sells the vehicle.
    (ii) On September 23, Y uses the vehicle. Y is liable for tax on 
the use of the vehicle during the taxable period ending June 30 of 
the following calendar year. Y's tax is calculated under paragraph 
(c)(4)(vii) by multiplying the amount of tax that would be due for a 
full taxable period by a fraction that has as its numerator the 
number of months in the period from the first day of the month in 
which Y's first taxable use of the vehicle after the sale occurs 
(the first day of the month after such month if the first taxable 
use after the sale occurs in the month of the sale) through the end 
of the taxable period, and as its denominator the number of months 
in the entire taxable period. Y's first use of the vehicle occurs in 
the month of the sale. Accordingly, Y's tax is based on the number 
of months in the period from the first day of October (the month 
following the month of the first taxable use) through the end of 
June, and Y owes a section 4481 tax of $322.50 (9/12 of $430) for 
the taxable period.
    Example (4).  Assume the same facts as in Example (3)(i), except 
that on September 2, X sells the vehicle to Dealer, a dealer in 
highway motor vehicles. X may claim a credit or refund of $322.50. 
Dealer operates

[[Page 64316]]

the vehicle exclusively for the purpose of demonstration, which is 
not a ``use'' of the vehicle under Sec.  41.4482(c)-1(c). On May 2 
of the following calendar year, Dealer sells the vehicle to Y. 
Dealer does not owe a section 4481 tax and may not claim a refund. 
Y's first taxable use of the vehicle occurs on May 3. Y's first 
taxable use of the vehicle does not occur in the month of a sale 
upon which a credit or refund is allowable. Accordingly, Y's tax is 
calculated under paragraph (c)(2) by multiplying the amount of tax 
that would be due for a full taxable period by a fraction which has 
as its numerator the number of months in the taxable period 
beginning with the month of first taxable use and as its denominator 
the number of months in the entire taxable period. The numerator is 
the number of months in the period from the first day of May (the 
month of Y's first taxable use after the sale) through the end of 
June, and Y owes a section 4481 tax of $71.67 (2/12 of $430) for the 
taxable period.

    (e) Effective/applicability date. This section applies on and after 
July 1, 2015. For rules applicable before that date, see 26 CFR 
41.4481-1 (revised as of April 1, 2014).

0
Par. 3. Section 41.4481-2 is amended by:
0
1. Removing the language ``or any installment payment of the tax'' in 
paragraph (a)(1)(i)(D).
0
2. Revising paragraph (a)(2) and adding paragraph (a)(3).
0
3. Adding a sentence at the end of paragraph (b).
0
4. Revising paragraph (c).
    The revisions and additions read as follows:


Sec.  41.4481-2  Persons liable for tax.

    (a) * * *
    (2) If a vehicle is sold during the taxable period and a credit or 
refund is allowable upon the sale under Sec.  41.4481-1(c)(4)(iii), 
paragraph (a)(1) of this section is applied with the following 
modifications:
    (i) For purposes of determining the person liable for the tax 
determined under Sec.  41.4481-1(c)(4)(ii), each reference to a taxable 
period in paragraph (a)(1) of this section is treated as a reference to 
the period that begins on the first day of the taxable period in which 
the vehicle is sold and ends on the date of sale.
    (ii) For purposes of determining the person liable for the tax 
determined under Sec.  41.4481-1(c)(4)(vi), each reference to a taxable 
period in paragraph (a)(1) of this section is treated as a reference to 
the period that begins on the date of the sale and ends on the last day 
of the taxable period in which the vehicle is sold.
    (3) The application of paragraph (a) of this section may be 
illustrated by Examples (3) and (4) in Sec.  41.4481-1(d).
    (b) * * * For provisions relating to penalties for aiding and 
abetting an understatement of tax liability, see section 6701 of the 
Internal Revenue Code.
    (c) Effective/applicability date. This section applies on and after 
July 1, 2015. For rules applicable before that date, see 26 CFR 
41.4481-2 (revised as of April 1, 2014).

0
Par. 4. Section 41.4483-3 is amended as follows:
0
1. In the fourth sentence of paragraph (f), removing the language ``to 
the extent that the tax or an installment payment of the tax has'' and 
adding ``(determined in the case of a transfer described in Sec.  
41.4481-1(c)(4)(i) under Sec.  41.4481-1(c)(4)(ii)) to the extent that 
the tax has'' in its place.
0
2. Adding paragraph (i).
    The addition reads as follows:


Sec.  41.4483-3  Exemption for trucks used for 5,000 or fewer miles and 
agricultural vehicles used for 7,500 or fewer miles on public highways.

* * * * *
    (i) Effective/applicability date. This section applies on and after 
July 1, 2015. For rules applicable before that date, see 26 CFR 
41.4483-3 (revised as of April 1, 2014).


Sec.  41.4483-7  [Removed]

0
Par. 5. Section 41.4483-7 is removed.


Sec.  41.6001-1  [Amended]

0
Par. 6. Section 41.6001-1 is amended as follows:
0
1. In the first sentence of paragraph (a), the language ``district 
director'' is removed and ``Commissioner'' is added in its place.
0
2. In paragraph (a)(3), the language ``In the case of any such vehicle 
acquired after June 30, 1956, the date'' is removed and ``The date'' is 
added in its place.

0
Par. 7. Section 41.6001-2 is amended by:
0
1. Removing the third sentence of paragraph (a).
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2. In the last sentence of paragraph (a), removing the language ``an 
application for registration which is mailed will be considered to be 
received by a State on the date on which it was postmarked'' and adding 
in its place ``the rules of section 7502 and Sec.  301.7502-1 of this 
chapter (relating to timely mailing treated as timely filing) determine 
when an application for registration is considered to be received by a 
State''.
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3. Redesignating paragraph (b)(1)(i) as paragraph (b)(1) and revising 
newly-redesignated paragraph (b)(1) heading.
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4. Removing and reserving paragraph (b)(1)(ii).
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5. Redesignating paragraph (b)(4)(i) as paragraph (b)(4) and revising 
newly-redesignated paragraph (b)(4) heading.
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6. Removing and reserving paragraph (b)(4)(ii).
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7. Revising paragraph (c).
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8. Adding paragraph (e).
    The revisions and addition read as follows:


Sec.  41.6001-2  Proof of payment for State registration purposes.

* * * * *
    (b) Proof of payment required--(1) In general. * * *
* * * * *
    (4) Registration during certain months * * *
* * * * *
    (c) Proof of payment--(1) In general. The proof of payment required 
in paragraph (b) of this section consists of a receipted Schedule 1 
(Form 2290 ``Heavy Highway Vehicle Use Tax Return'') that is returned 
by the Internal Revenue Service, by mail or electronically, to a 
taxpayer that files a return of tax under section 4481(a), meets the 
requirements of Sec.  41.6011(a)-1, and pays the amount of tax due with 
such return. A photocopy of such receipted Schedule 1 also serves as 
proof of payment. Such Schedule 1 serves as proof of suspension of such 
tax under Sec.  41.4483-3 for the number of vehicles entered in that 
part of the Schedule 1 designated for vehicles for which tax has been 
suspended. The vehicle identification number of the vehicle being 
registered must appear on the Schedule 1 (or an attached page) in order 
for the Schedule 1 to be a valid proof of payment for such vehicle.
    (2) Acceptable substitute for receipted Schedule 1. For purposes of 
this section, a State must accept as proof of payment a photocopy of 
the Form 2290 (with the Schedule 1 attached) that was filed with the 
Internal Revenue Service for the vehicle being registered with 
sufficient documentation of payment of tax due at the time the Form 
2290 was filed (such as a photocopy of both sides of a cancelled 
check). This substitute proof of payment may be used to register a 
vehicle when, for example, the receipted Schedule 1 has been lost, or 
when at the time required for registration of a vehicle, a receipted 
Schedule 1 has not been received by a taxpayer who has filed a Form 
2290 with respect to such vehicle.
* * * * *
    (e) Effective/applicability date. Paragraph (c) of this section 
applies to registrations of highway motor vehicles pursuant to 
applications that are received by a State on or after July 1,

[[Page 64317]]

2015. The rules of section 7502 and Sec.  301.7502-1 of this chapter 
(relating to timely mailing treated as timely filing) determine when an 
application for registration is considered to be received by a State. 
For rules applicable to applications before that date, see 26 CFR 
41.6001-2 (revised as of April 1, 2014).


Sec.  41.6001-2T  [Removed]

0
Par. 8. Section 41.6001-2T is removed.

0
Par. 9. Section 41.6011(a)-1 is amended by adding paragraphs (a)(4), 
(c) and (d) to read as follows:


Sec.  41.6011(a)-1  Returns.

    (a) * * *
    (4) A person that is liable for tax under Sec.  41.4481-
2(a)(1)(i)(A), (B), (C), or (D), after taking into account the 
modification required under Sec.  41.4481-2(a)(2), is treated as liable 
for tax by the same provision of Sec.  41.4481-2(a)(1)(i) for purposes 
of this section and must file a return.
* * * * *
    (c) Required use of electronic filing--(1) In general. A person 
that files any return reporting 25 or more vehicles must file the 
return electronically, as prescribed by the Commissioner. For this 
purpose, the number of vehicles reported on a return is the total 
number of vehicles for which tax is reported and does not include 
vehicles for which a suspension of tax is claimed.
    (2) Examples. The application of this paragraph (c) may be 
illustrated by the following examples:

    Example 1.  A has 100 vehicles registered in its name, all of 
which have a taxable gross weight in excess of 55,000 pounds. 
Seventy-five of the vehicles are in use on July 1. Twenty-five are 
in dead storage as described in Sec.  41.4482(c)-1(c). The vehicles 
in dead storage are not in use and they are not listed on the 
Schedule 1. A files Form 2290 electronically for the 75 vehicles in 
use on July 1 and receives a receipted Schedule 1. On August 23 of 
the same calendar year, A uses the remaining 25 vehicles. A does not 
file Form 2290 electronically but uses a paper Form 2290. A has 
failed to meet the requirements of section 4481(e) for the remaining 
25 vehicles.
    Example 2.  Assume the same facts as in Example 1 except that on 
August 23, A uses 15 of the vehicles that were not used in July. The 
remaining 10 vehicles are not used in August. A does not file Form 
2290 electronically but uses a paper Form 2290. A has correctly 
filed a return as required by section 4481(e).

    (d) Effective/applicability date. Paragraphs (a)(4) and (c) of this 
section apply to returns filed on and after July 1, 2015. For rules 
applicable before that date, see 26 CFR 41.6011(a)-1 (revised as of 
April 1, 2014).

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Par. 10. Section 41.6071(a)-1 is amended as follows:
0
1. In paragraph (a) introductory text, the language ``paragraph (b) or 
paragraph (c)'' is removed and ``paragraph (b)'' is added in its place.
0
2. Revising paragraph (c).
0
3. Adding paragraph (d).
    The additions and revision read as follows:


Sec.  41.6071(a)-1  Time for filing returns.

* * * * *
    (c) Effect of sale during taxable period. A person that is liable 
for tax under Sec.  41.4481-2(a)(1)(i)(A), (B), (C), or (D) after 
taking into account the modification required under Sec.  41.4481-
2(a)(2) is treated as liable for tax under the same provision of Sec.  
41.4481-2(a)(1)(i) for purposes of this section.
    (d) Effective/applicability date. Paragraph (c) of this section 
applies on and after July 1, 2015. For rules applicable before that 
date, see 26 CFR 41.6071(a)-1 (revised as of April 1, 2014).


Sec.  41.6071(a)-1T  [Removed]

0
Par. 11. Section 41.6071(a)-1T is removed.


Sec.  41.6151(a)-1  [Revised]

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Par. 12. Section 41.6151(a)-1 is revised to read as follows:


Sec.  41.6151(a)-1  Time and place for paying tax.

    (a) In general. The tax must be paid at the time prescribed in 
Sec.  41.6071(a)-1 for filing the return and at the place prescribed in 
Sec.  41.6091-1 for filing the return.
    (b) Effective/applicability date. This section applies on and after 
July 1, 2015. For rules applicable before that date, see 26 CFR 
41.6151(a)-1 and 41.6151(a)-1T (revised as of April 1, 2014).


Sec.  41.6151(a)-1T  [Removed]

0
Par. 13. Section 41.6151(a)-1T is removed.


Sec.  41.6156-1  [Removed]

0
Par. 14. Section 41.6156-1 is removed.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: September 9, 2014.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2014-25558 Filed 10-28-14; 8:45 am]
BILLING CODE 4830-01-P