Par. 9. New §§ 48.4051-0, 48.4051-1, and 48.4051-2 are added to subpart H to read as follows:
(a) Parts or accessories sold on or in connection with the sale of chassis, bodies, and tractors —(1) In general. (i) The tax imposed by section 4051 applies to parts or accessories sold on or in connection with, or with the sale of, any article specified in § 48.4051-1(a). The tax applies whether or not the parts or accessories are separately billed by the retailer.
(ii) If a taxable chassis or body is sold by the retailer without parts or accessories that are considered equipment essential for the operation or appearance of the taxable article, the sale of these parts or accessories by the retailer to the buyer of the taxable article will be considered, in the absence of evidence to the contrary, to have been made in connection with the sale of the taxable article even though they are shipped separately, whether at the same time or on a different date.
(iii) Parts and accessories that are spares or replacements are not subject to the tax described in paragraph (a)(1)(i) of this section.
(2) Example. The following example illustrates the application of this paragraph (a):
Example .
X buys from Retailer a chassis in a sale subject to the tax imposed by section 4051. At the time of the sale, bumpers were not attached to the chassis; rather, they had been ordered from Retailer and delivered to X at a later date. For purposes of the tax imposed by section 4051, the price of the chassis includes the price of the bumpers, regardless of when the Retailer delivered the bumpers or billed X for the bumpers.
(b) Parts or accessories not sold on or in connection with the sale of chassis, bodies, and tractors —(1) In general. Section 4051(b)(1) imposes a tax on the installation of a part or accessory on a taxable article specified in § 48.4051-1(a) within six months after the article was first placed in service. However, the tax imposed by section 4051(b)(1) does not apply if—
(i) The part or accessory is a replacement part or accessory; or
(ii) The aggregate price of non-replacement parts and accessories (and their installation) for any vehicle does not exceed $1,000.
(2) Application and rate of tax. The tax is the applicable percentage of the price of the part or accessory and its installation. The applicable percentage is prescribed in section 4051(b)(1).
(3) Liability for tax. The owner, lessee, or operator of the vehicle on which the parts or accessories are installed is liable for this tax. The owner(s) of the trade or business that installs the parts or accessories is secondarily liable for this tax.
(4) Definitions —(i) First placed in service. For purposes of this section, a vehicle is first placed in service on the date on which the owner of the vehicle took actual possession of the vehicle. This date can be established by the delivery ticket signed by the owner or other comparable document indicating delivery to, and acceptance by, the owner.
(ii) Replacement part. The term replacement part means an item that is substantially similar to and intended to take the place of a vehicle part that has worn out or broken down, regardless of when it is ordered.
(5) Example. The following example illustrates the application of this paragraph (b). Assume that during the periods described, the rate of tax is 12 percent of the price of the part or accessory and its installation.
Example .
X bought a vehicle in a sale that was subject to the tax imposed by section 4051 and first placed it in service on September 1, 2013. On October 1, 2013, X purchases and has installed non-replacement parts at a cost of $750. On November 1, 2013, X purchases and has installed additional non-replacement parts at a cost of $450. On December 1, 2013, X purchases and has installed additional non-replacement parts and accessories at a cost of $900. Although the price of each separate purchase and installation is less than $1,000, the aggregate price exceeds the $1,000 limit on November 1, 2013. Accordingly, on November 1, 2013, X is liable for tax of $144 (12 percent × ($750 + $450)) on account of the installations on October 1, and November 1, 2013. On December 1, 2013, X is liable for a tax of $108 (12 percent × $900) on account of the installation on that date. To report its liability X must file Form 720, Quarterly Federal Excise Tax Return, for the fourth calendar quarter of 2013 by January 31, 2014.
(c) Effective/applicability date. This section applies on and after the date of publication of these regulations in the Federal Register as final regulations.