§4001. Imposition of tax

(a) Imposition of tax

There is hereby imposed on the 1st retail sale of any passenger vehicle a tax equal to 10 percent of the price for which so sold to the extent such price exceeds $30,000.

(b) Passenger vehicle

(1) In general

For purposes of this subchapter, the term "passenger vehicle" means any 4-wheeled vehicle-

(A) which is manufactured primarily for use on public streets, roads, and highways, and

(B) which is rated at 6,000 pounds unloaded gross vehicle weight or less.

(2) Special rules

(A) Trucks and vans

In the case of a truck or van, paragraph (1)(B) shall be applied by substituting "gross vehicle weight" for "unloaded gross vehicle weight".

(B) Limousines

In the case of a limousine, paragraph (1) shall be applied without regard to subparagraph (B) thereof.

(c) Exceptions for taxicabs, etc.

The tax imposed by this section shall not apply to the sale of any passenger vehicle for use by the purchaser exclusively in the active conduct of a trade or business of transporting persons or property for compensation or hire.

(d) Exemption for law enforcement uses, etc.

No tax shall be imposed by this section on the sale of any passenger vehicle-

(1) to the Federal Government, or a State or local government, for use exclusively in police, firefighting, search and rescue, or other law enforcement or public safety activities, or in public works activities, or

(2) to any person for use exclusively in providing emergency medical services.

(e) Inflation adjustment

(1) In general

If, for any calendar year, the excess (if any) of-

(A) $30,000, increased by the cost-of-living adjustment for the calendar year, over

(B) the dollar amount in effect under subsection (a) for the calendar year,

is equal to or greater than $2,000, then the $30,000 amount in subsection (a) and section 4003(a) (as previously adjusted under this subsection) for any subsequent calendar year shall be increased by the amount of such excess rounded to the next lowest multiple of $2,000.

(2) Cost-of-living adjustment

For purposes of paragraph (1), the cost-of-living adjustment for any calendar year shall be the cost-of-living adjustment under section 1(f)(3) for such calendar year, determined by substituting "calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof.

(f) Termination

The tax imposed by this section shall not apply to any sale or use after December 31, 1999.

(Added Pub. L. 101–508, title XI, §11221(a), Nov. 5, 1990, 104 Stat. 1388–439 ; amended Pub. L. 103–66, title XIII, §13161(a), Aug. 10, 1993, 107 Stat. 449 .)

Adjustment of Threshold Price for Purposes of Determining Excise Tax Under This Section for Tax Years Beginning in 1995

For adjustment of threshold price above which purchase of luxury passenger vehicle becomes subject to excise tax under this section for tax years beginning in 1995, see section 3.10 of Revenue Procedure 94–72, set out as a note under section 1 of this title.

Amendments

1993-Pub. L. 103–66 amended section generally, substituting "Imposition of tax" for "Passenger vehicles" in section catchline and "this subchapter" for "subsection (a)" in subsec. (b)(1) and adding subsecs. (d) to (f).

Effective Date of 1993 Amendment

Section 13161(c) of Pub. L. 103–66 provided that: "The amendments made by this section [amending this section and sections 4002, 4003, 4221, and 4222 of this title and omitting sections 4004, 4006, 4007, 4011, and 4012 of this title] shall take effect on January 1, 1993, except that the provisions of section 4001(e) of the Internal Revenue Code of 1986 (as amended by subsection (a)) shall take effect on the date of the enactment of this Act [Aug. 10, 1993]."

Effective Date

Section 11221(f) of Pub. L. 101–508 provided that:

"(1) In general.-The amendments made by this section [enacting this subchapter, redesignating former subchapters A and B of this chapter as subchapters B and C, respectively, and amending sections 4221, 4222, and 4293 of this title] shall take effect on January 1, 1991.

"(2) Exception for binding contracts.-In determining whether any tax imposed by subchapter A of chapter 31 of the Internal Revenue Code of 1986, as added by this section, applies to any sale after December 31, 1990, there shall not be taken into account the amount paid for any article (or any part or accessory therefor) if the purchaser held on September 30, 1990, a contract (which was binding on such date and at all times thereafter before the purchase) for the purchase of such article (or such part or accessory)."

Section Referred to in Other Sections

This section is referred to in sections 4221, 4222 of this title.