Par. 5. Section 52.4662-3 is added to read as follows:
(a) In general. Except as otherwise provided in section 4662(c)(2) of the Internal Revenue Code (Code), in any case in which a manufacturer, producer, or importer of a taxable chemical exchanges such chemical as part of an inventory exchange with another person, the exchange is not treated as a sale, and the other person is treated as the manufacturer, producer, or importer of the chemical, if the requirements in paragraph (b) of this section are satisfied. See section 4662(c)(2). For purposes of section 4662(c), the term inventory exchange means any exchange in which two persons exchange property that is, in the hands of each person, property described in section 1221(a)(1) of the Code. See section 4662(c)(2)(C).
(b) Requirements. The section 4662(c) exception applies only if, at the time of the exchange, all of the following requirements are satisfied:
(1) Both parties are taxable chemical registrants;
(2) The manufacturer, producer, or importer has an unexpired notification certificate from the person receiving the taxable chemical; and
(3) The manufacturer, producer, or importer has no reason to believe that any information in the notification certificate is false.
(c) Notification certificate —(1) Overview. The certificate to be provided by the person receiving the taxable chemical consists of a statement that is signed under penalties of perjury by someone with authority to bind the person receiving the taxable chemical, is in substantially the same form as the model certificate provided in paragraph (c)(2) of this section, and contains all of the information necessary to complete such model certificate. A new certificate must be given if any information in the certificate changes or if the person receiving the taxable chemical informs the manufacturer, producer, or importer that the certificate is no longer accurate. The certificate expires on the earlier of the date the person provides a new certificate or the date the person is notified by the Internal Revenue Service (IRS) that the person's registration has been revoked or suspended.
(2) Model certificate.
Notification Certificate of Taxable Chemical Registrant