[Federal Register Volume 60, Number 196 (Wednesday, October 11, 1995)]
[Rules and Regulations]
[Pages 52848-52856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24603]



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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 52 and 602

[TD 8622]
RIN 1545-AQ23


Exports of Chemicals That Deplete the Ozone Layer; Special Rules 
for Certain Medical Uses of Chemicals That Deplete the Ozone Layer

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations relating to taxes 
imposed on exports of ozone-depleting chemicals (ODCs), taxes imposed 
on ODCs used as medical sterilants or propellants in metered-dose 
inhalers, and floor stocks taxes on ODCs. The regulations reflect 
changes to the law made by the Omnibus Budget Reconciliation Act of 
1989, the Omnibus Budget Reconciliation Act of 1990, and the Energy 
Policy Act of 1992 and affect persons who manufacture, import, export, 
sell, or use ODCs.

EFFECTIVE DATE: These regulations are effective January 1, 1993.

FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, (202) 622-3130 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collections of information contained in these final regulations 
have been reviewed and approved by the Office of Management and Budget 
in accordance with the Paperwork Reduction Act (44 U.S.C. 3504(h)) 
under control number 1545-1361.
    Estimated average annual burden per recordkeeper: 0.2 hour.
    Estimated average annual burden per respondent: 0.1 hour.
    Comments concerning the accuracy of this burden estimate and 
suggestions for reducing this burden should be sent to the Internal 
Revenue Service, Attn: IRS Reports Clearance Officer, PC:FP, 
Washington, DC 20224, and to the Office of Management and Budget, Attn: 
Desk Officer for the Department of the Treasury, Office of Information 
and Regulatory Affairs, Washington, DC 20503.

Background

    This document contains amendments to the Environmental Tax 
Regulations (26 CFR part 52) relating to exports of ODCs under sections 
4681 and 4682. Sections 4681 and 4682 were enacted as part of the 
Omnibus Budget Reconciliation Act of 1989, and amended by the Omnibus 
Budget Reconciliation Act of 1990 and the Energy Policy Act of 1992 
(Energy Act).
    Section 4682(d)(3) provides a limited exemption from tax for ODCs 
that are exported. Although final regulations (TD 8370) under sections 
4681 and 4682 were published in the Federal Register on November 4, 
1991 (56 FR 56303), the section relating to exports of ODCs was 
reserved.
    The Energy Act increased and made uniform the base tax amounts for 
all ODCs and extended the floor stocks tax to calendar years after 
1994. The Energy Act also provides a reduced rate of tax for (1) ODCs 
used as propellants in metered-dose inhalers (for years after 1992), 
(2) ODCs used as medical sterilants (for 1993 only), and (3) methyl 
chloroform (for 1993 only).
    On January 15, 1993, proposed regulations (PS-89-91) relating to 
exports of ODCs and the Energy Act changes were published in the 
Federal Register (58 FR 4625). Written comments responding to the 
notice of proposed rulemaking were received. A public hearing was not 
held. After consideration of all the comments, the proposed regulations 
are adopted as revised by this Treasury decision. The comments and 
revisions are discussed below.

Explanation of Revisions and Summary of Comments

Mixtures

    Under the 1991 final regulations, the creation of a mixture is 
treated as a taxable use of the ODCs contained in the mixture unless a 
person elects other treatment (the mixture election). The proposed 
regulations provided, however, that the creation of a mixture for 
export is not a taxable use of the ODCs contained in the mixture. 
Commenters supported the proposed rule and suggested that it also apply 
to mixtures created for feedstock use. These final regulations adopt 
the proposed rule and extend its application to include the creation of 
a mixture for feedstock use. However, these regulations do not adopt 
the suggestion that the rule be further extended to apply to sales of 
ODCs for the creation of a mixture.

Metered-Dose Inhalers

    Several commenters pointed out that the proposed definition of a 
metered-dose inhaler, by including the phrase directly to the lungs, 
excluded two of the eight types of inhalers. They suggested that we 
modify the definition to remove this phrase. The final regulations 
adopt this suggestion.

Exemption Amount

    One commenter pointed out that the provisions of the proposed 
regulations describing exemption amounts should refer to exceptions 
from tax under section 4682(d) rather than under section 4682(d)(3). 
The final regulations adopt the suggested reference.
    One commenter suggested that we add an example illustrating the 
calculation of the exemption amount when a person is both a 
manufacturer and an importer. The final regulations provide such an 
example.

Registration

    One commenter suggested that we specify how to register with the 
IRS. The final regulations explain the registration procedure.

Credit or Refund for Exports

    One commenter thought that the wording of the proposed rule 
relating to a claim for credit or refund of tax paid on ODCs that are 
exported was ambiguous as to which year's exemption limitation applies 
to such a claim. The final regulations clarify that the applicable 
limitation is the limitation for the calendar year during which the 
ODCs were sold.
    The same commenter raised questions about the documentation to be 
submitted with a claim and suggested that the regulations provide more 
information. Documentation needs to be submitted with a claim only if 
specifically required. Neither the proposed nor the final regulations 

[[Page 52849]]
require documentation to be submitted with the claim.
    Another commenter suggested that for periods before 1993 we accept 
export documentation similar to that required by the Environmental 
Protection Agency. These final regulations provide that such 
documentation is acceptable.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in EO 12866. Therefore, a 
regulatory assessment is not required. It also has been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to 
these regulations, and, therefore, a Regulatory Flexibility Analysis is 
not required. Pursuant to section 7805(f) of the Internal Revenue Code, 
the notice of proposed rulemaking preceding these regulations was 
submitted to the Small Business Administration for comment on its 
impact on small business.

Drafting Information

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

List of Subjects

26 CFR Part 52

    Chemicals, Excise taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

    Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR parts 52 and 602 are amended as follows:

PART 52--ENVIRONMENTAL TAXES

    Paragraph 1. The authority citation for part 52 is amended by 
adding an entry in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 52.4682-5 also issued under 26 U.S.C. 4662(e)(4).


Sec. 52.4681-0  [Removed]

    Par. 2. Section 52.4681-0 is removed.
    Par. 3. Section 52.4681-1 is amended by:
    1. Revising paragraph (a)(3)(ii).
    2. Revising paragraph (c)(7)(iii)(A).
    3. Revising paragraph (d)(3).
    The revisions read as follows:


Sec. 52.4681-1  Taxes imposed with respect to ozone-depletingchemicals.

    (a) * * *
    (3) * * *
    (ii) Dates on which tax imposed. The floor stocks tax is imposed on 
January 1 of each calendar year after 1989.
* * * * *
    (c) * * *
    (7) * * *
    (iii) * * *
    (A) Section 52.4682-1(b)(2)(iii) (relating to mixture elections), 
Sec. 52.4682-1(b)(2)(iv) (relating to mixtures for export), and 
Sec. 52.4682-1(b)(2)(v) (relating to mixtures for use as a feedstock);
* * * * *
    (d) * * *
    (3) Post-1989 ODCs held for sale or for use in further manufacture 
by any person other than the manufacturer or importer thereof on 
January 1, 1990, and post-1989 and post-1990 ODCs that are so held on 
January 1 of each calendar year after 1990.
    Par. 4. Section 52.4682-1 is amended by:
    1. Revising paragraph (a).
    2. Revising the introductory text of paragraph (b)(2)(ii).
    3. Adding paragraphs (b)(2)(iv) and (b)(2)(v).
    4. Revising paragraphs (f) and (g).
    5. Adding paragraph (h).
    6. Adding and reserving paragraph (i).
    7. Adding paragraph (j).
    8. Adding and reserving paragraph (k).
    The revisions and additions read as follows:


Sec. 52.4682-1  Ozone-depleting chemicals.

    (a) Overview. This section provides rules relating to the tax 
imposed on ozone-depleting chemicals (ODCs) under section 4681, 
including rules for identifying taxable ODCs and determining when the 
tax is imposed, and rules prescribing special treatment for certain 
ODCs. See Sec. 52.4681-1(a)(1) and (c) for general rules and 
definitions relating to the tax on ODCs.
    (b) * * *
    (2) * * *
    (ii) Mixtures. Except as provided in paragraphs (b)(2)(iii), (iv), 
and (v) of this section, the creation of a mixture containing two or 
more ingredients is treated as a taxable use of the ODCs contained in 
the mixture. For this purpose, a mixture cannot be represented by a 
chemical formula, and an ODC is contained in a mixture only if the 
chemical identity of the ODC is not changed. Thus, except as provided 
in paragraphs (b)(2)(iii), (iv), and (v) of this section--
* * * * *
    (iv) Special rule for exports. The creation of a mixture for export 
is not a taxable use of the ODCs contained in the mixture. If a 
manufacturer or importer sells a mixture for export, Sec. 52.4682-5 
applies to the ODCs contained in the mixture. See Sec. 52.4682-5(e) for 
rules relating to liability of a purchaser for tax if the mixture is 
not exported.
    (v) Special rule for use as a feedstock. The creation of a mixture 
for use as a feedstock (within the meaning of paragraph (c) of this 
section) is not a taxable use of the ODCs contained in the mixture.
* * * * *
    (f) Methyl chloroform; reduced rate of tax in 1993. The amount of 
tax imposed on methyl chloroform is determined under section 4682(g)(5) 
if the manufacturer or importer of the methyl chloroform sells or uses 
it during 1993.
    (g) ODCs used as medical sterilants--(1) Phase-in of tax. The 
amount of tax imposed on an ODC is determined under section 4682(g)(4) 
if the manufacturer or importer of the ODC--
    (i) Uses the ODC during 1993 as a medical sterilant; or
    (ii) Sells the ODC in a qualifying sale (within the meaning of 
paragraph (g)(4) of this section) during 1993.
    (2) Excess payments--(i) In general. Under section 4682(g)(4)(B), a 
credit against income tax (without interest) or a refund of tax 
(without interest) is allowed to a person if--
    (A) The person uses an ODC during 1993 as a medical sterilant; and
    (B) The amount of any tax paid with respect to the ODC under 
section 4681 or 4682 exceeds the amount that would have been determined 
under section 4682(g)(4).
    (ii) Amount of credit or refund. The amount of credit or refund of 
tax is equal to the excess of--
    (A) The tax that was paid with respect to the ODCs under sections 
4681 and 4682; over
    (B) The tax that would have been imposed under section 4682(g)(4).
    (iii) Procedural rules. (A) The amount determined under section 
4682(g)(4)(B) and paragraph (g)(2)(ii) of this section is treated as a 
credit described in section 34(a) (relating to credits for gasoline and 
special fuels) unless a claim for refund has been filed.
    (B) See section 6402 and the regulations under that section for 
procedural rules relating to claiming a credit or refund of tax.
    (3) Definition of use as a medical sterilant. An ODC is used as a 
medical 

[[Page 52850]]
sterilant if it is used in the manufacture of sterilant gas.
    (4) Qualifying sale. A sale of an ODC for use as a medical 
sterilant is a qualifying sale if the requirements of Sec. 52.4682-
2(b)(3) are satisfied with respect to the sale.
    (h) ODCs used as propellants in metered-dose inhalers--(1) Reduced 
rate of tax. The amount of tax imposed on an ODC is determined under 
section 4682(g)(4) if the manufacturer or importer of the ODC--
    (i) Uses the ODC after 1992 as a propellant in a metered-dose 
inhaler; or
    (ii) Sells the ODC in a qualifying sale (within the meaning of 
paragraph (h)(4) of this section) after 1992.
    (2) Excess payments--(i) In general. Under section 4682(g)(4)(B), a 
credit against income tax (without interest) or a refund of tax 
(without interest) is allowed to a person if--
    (A) The person uses an ODC after 1992 as a propellant in a metered-
dose inhaler; and
    (B) The amount of any tax paid with respect to the ODC under 
section 4681 or 4682 exceeds the amount that would have been determined 
under section 4682(g)(4).
    (ii) Amount of credit or refund. The amount of credit or refund of 
tax is equal to the excess of--
    (A) The tax that was paid with respect to the ODCs under sections 
4681 and 4682; over
    (B) The tax that would have been imposed under section 4682(g)(4).
    (iii) Procedural rules--(A) The amount determined under section 
4682(g)(4)(B) and paragraph (h)(2)(ii) of this section is treated as a 
credit described in section 34(a) (relating to credits for gasoline and 
special fuels) unless a claim for refund has been filed.
    (B) See section 6402 and the regulations under that section for 
procedural rules relating to claiming a credit or refund of tax.
    (3) Definition of metered-dose inhaler. A metered-dose inhaler is 
an aerosol device that delivers a precisely-measured dose of a 
therapeutic drug.
    (4) Qualifying sale. A sale of an ODC for use as a propellant for a 
metered-dose inhaler is a qualifying sale if the requirements of 
Sec. 52.4682-2(b)(4) are satisfied with respect to the sale.
    (i) [Reserved]
    (j) Exports; cross-reference. For the treatment of exports of ODCs, 
see Sec. 52.4682-5.
    (k) Recycling. [Reserved]
    Par. 5. Section 52.4682-2 is amended by:
    1. Adding paragraphs (a)(1)(iii) and (a)(1)(iv).
    2. Amending the second sentence of paragraph (a)(2) by:
    a. Removing the language ``submission of a document to'' and adding 
``registration with'' in its place.
    b. Removing the language ``registration certificates'' and adding 
``certificates'' in its place.
    3. Removing the language ``registration'' from paragraphs (b)(1)(i) 
and (b)(2)(i).
    4. Adding paragraphs (b)(3) and (b)(4).
    5. Revising the heading for paragraph (d).
    6. Revising paragraph (d)(1)(i).
    7. Adding paragraphs (d)(4) and (d)(5).
    The additions and revisions read as follows:


Sec. 52.4682-2  Qualifying sales.

    (a) * * *
    (1) * * *
    (iii) Under section 4682(g)(4) and Sec. 52.4682-1(g) (relating to 
ODCs used as medical sterilants), ODCs sold in qualifying sales are 
taxed at a reduced rate in 1993.
    (iv) Under section 4682(g)(4) and Sec. 52.4682-1(h) (relating to 
ODCs used as propellants in metered-dose inhalers), ODCs sold in 
qualifying sales are taxed at a reduced rate in years after 1992.
* * * * *
    (b) * * *
    (3) Use as medical sterilants. A sale of ODCs is a qualifying sale 
for purposes of Sec. 52.4682-1(g) if the manufacturer or importer of 
the ODCs--
    (i) Obtains a certificate in substantially the form set forth in 
paragraph (d)(4) of this section from the purchaser of the ODCs; and
    (ii) Relies on the certificate in good faith.
    (4) Use as propellants in metered-dose inhalers. A sale of ODCs is 
a qualifying sale for purposes of Secs. 52.4682-1(h) and 52.4682-
4(b)(2)(vii) if the manufacturer or importer of the ODCs--
    (i) Obtains a certificate in substantially the form set forth in 
paragraph (d)(5) of this section from the purchaser of the ODCs; and
    (ii) Relies on the certificate in good faith.
* * * * *
    (d) Certificate--(1) * * * (i) Rules relating to all certificates. 
This paragraph (d) sets forth certificates that satisfy the 
requirements of paragraphs (b)(1) through (4) of this section. The 
certificate shall consist of a statement executed and signed under 
penalties of perjury by a person with authority to bind the purchaser. 
A certificate provided under paragraph (d)(2) or (5) of this section 
may apply to a single purchase or to multiple purchases and need not 
specify an expiration date. A certificate provided under paragraph 
(d)(3) or (4) of this section may apply to a single purchase or 
multiple purchases, and will expire as of December 31, 1993, unless an 
earlier expiration date is specified in the certificate. A new 
certificate must be given to the supplier if any information on the 
current certificate changes. The certificate may be included as part of 
any business records normally used to document a sale.
* * * * *
    (4) Certificate relating to ODCs used as medical sterilants--(i) 
ODCs that will be resold for use by the second purchaser as medical 
sterilants. If the purchaser will resell the ODCs to a second purchaser 
for use by such second purchaser as medical sterilants, the certificate 
provided by the purchaser must be in substantially the following form:

CERTIFICATE OF PURCHASER OF CHEMICALS THAT WILL BE RESOLD FOR USE BY 
THE SECOND PURCHASER AS MEDICAL STERILANTS

(To support tax-reduced sales under section 4682(g)(4) of the Internal 
Revenue Code.)

Effective Date---------------------------------------------------------
Expiration Date--------------------------------------------------------
                    (not after 12/31/93)
    The undersigned purchaser (Purchaser) certifies the following 
under penalties of perjury:
    The following percentage of ozone-depleting chemicals purchased 
from:

----------------------------------------------------------------------
(Name of seller)
----------------------------------------------------------------------
(Address of seller)

will be resold by Purchaser to persons (Second Purchasers) that 
certify to Purchaser that they are purchasing the ozone-depleting 
chemicals for use as medical sterilants (as defined in Sec. 52.4682-
1(g)(3) of the Environmental Tax Regulations).

------------------------------------------------------------------------
                          Product                             Percentage
------------------------------------------------------------------------
CFC-12.....................................................   __________
------------------------------------------------------------------------

    This certificate applies to (check and complete as applicable):

______ All shipments to Purchaser at the following location(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following Purchaser 
account number(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following purchase 
order(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ One or more shipments to Purchaser identified as follows:

[[Page 52851]]

----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    Purchaser will not claim a credit or refund under section 
4682(g)(4) of the Internal Revenue Code for any ozone-depleting 
chemicals covered by this certificate.
    Purchaser understands that any use by Purchaser of the ozone-
depleting chemicals to which this certificate applies other than for 
the purpose set forth in this certificate may result in the 
withdrawal by the Internal Revenue Service of Purchaser's right to 
provide a certificate.
    Purchaser will retain the business records needed to document 
the sales covered by this certificate and will make such records 
available for inspection by Government officers. Purchaser also will 
retain and make available for inspection by Government officers the 
certificates of its Second Purchasers.
    Purchaser has not been notified by the Internal Revenue Service 
that its right to provide a certificate has been withdrawn. In 
addition, the Internal Revenue Service has not notified Purchaser 
that the right to provide a certificate has been withdrawn from any 
Second Purchaser who will purchase ozone-depleting chemicals to 
which this certificate applies.
    Purchaser understands that the fraudulent use of this 
certificate may subject Purchaser and all parties making such 
fraudulent use of this certificate to a fine or imprisonment, or 
both, together with the costs of prosecution.
----------------------------------------------------------------------
Name of Purchaser
----------------------------------------------------------------------
Address of Purchaser
----------------------------------------------------------------------
----------------------------------------------------------------------
Taxpayer Identifying Number of Purchaser
----------------------------------------------------------------------
Title of person signing
----------------------------------------------------------------------
Printed or typed name of person signing
----------------------------------------------------------------------
Signature

    (ii) ODCs that will be used by the purchaser as medical sterilants. 
If the purchaser will use the ODCs as medical sterilants, the 
certificate provided by the purchaser must be in substantially the 
following form:

CERTIFICATE OF PURCHASER OF CHEMICALS THAT WILL BE USED BY THE 
PURCHASER AS MEDICAL STERILANTS

(To support tax-reduced sales under section 4682(g)(4) of the Internal 
Revenue Code.)

Effective Date---------------------------------------------------------
Expiration Date--------------------------------------------------------
                    (not after 12/31/93)
    The undersigned purchaser (Purchaser) certifies the following 
under penalties of perjury:
    The following percentage of ozone-depleting chemicals purchased 
from:
----------------------------------------------------------------------
(Name of seller)
----------------------------------------------------------------------
(Address of seller)

will be used by Purchaser as medical sterilants (as defined in 
Sec. 52.4682-1(g)(3) of the Environmental Tax Regulations).

------------------------------------------------------------------------
                          Product                             Percentage
------------------------------------------------------------------------
CFC-12.....................................................   __________
------------------------------------------------------------------------

    This certificate applies to (check and complete as applicable):

______ All shipments to Purchaser at the following location(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following Purchaser 
account number(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following purchase 
order(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ One or more shipments to Purchaser identified as follows:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    Purchaser will not claim a credit or refund under section 
4682(g)(4) of the Internal Revenue Code for any ozone-depleting 
chemicals covered by this certificate.
    Purchaser understands that any use by Purchaser of the ozone-
depleting chemicals to which this certificate applies other than as 
medical sterilants may result in the withdrawal by the Internal 
Revenue Service of Purchaser's right to provide a certificate.
    Purchaser will retain the business records needed to document 
the use as medical sterilants of the ozone-depleting chemicals to 
which this certificate applies and will make such records available 
for inspection by Government officers.
    Purchaser has not been notified by the Internal Revenue Service 
that its right to provide a certificate has been withdrawn.
    Purchaser understands that the fraudulent use of this 
certificate may subject Purchaser and all parties making such 
fraudulent use of this certificate to a fine or imprisonment, or 
both, together with the costs of prosecution.
----------------------------------------------------------------------
Name of Purchaser
----------------------------------------------------------------------
Address of Purchaser
----------------------------------------------------------------------
----------------------------------------------------------------------
Taxpayer Identifying Number of Purchaser
----------------------------------------------------------------------
Title of person signing
----------------------------------------------------------------------
Printed or typed name of person signing
----------------------------------------------------------------------
Signature

    (5) Certificate relating to ODCs used as propellants in metered-
dose inhalers--(i) ODCs that will be resold for use by the second 
purchaser as propellants in metered-dose inhalers. If the purchaser 
will resell the ODCs to a second purchaser for use by such second 
purchaser as propellants in metered-dose inhalers, the certificate 
provided by the purchaser must be in substantially the following form:

CERTIFICATE OF PURCHASER OF CHEMICALS THAT WILL BE RESOLD FOR USE BY 
THE SECOND PURCHASER AS PROPELLANTS IN METERED-DOSE INHALERS

(To support tax-reduced sales under section 4682(g)(4) of the Internal 
Revenue Code.)

Date-------------------------------------------------------------------

    The undersigned purchaser (Purchaser) certifies the following 
under penalties of perjury:
    The following percentage of ozone-depleting chemicals purchased 
from:
----------------------------------------------------------------------
(Name of seller)
----------------------------------------------------------------------
(Address of seller)

will be resold by Purchaser to persons (Second Purchasers) that 
certify to Purchaser that they are purchasing the ozone-depleting 
chemicals for use as propellants in metered-dose inhalers (as 
defined in Sec. 52.4682-1(h)(3) of the Environmental Tax 
Regulations).

------------------------------------------------------------------------
                          Product                             Percentage
------------------------------------------------------------------------
CFC-11.....................................................     ________
CFC-12.....................................................     ________
CFC-114....................................................     ________
------------------------------------------------------------------------

    This certificate applies to (check and complete as applicable):

________ All shipments to Purchaser at the following location(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
________ All shipments to Purchaser under the following Purchaser 
account number(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
________ All shipments to Purchaser under the following purchase 
order(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
________ One or more shipments to Purchaser identified as follows:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    Purchaser will not claim a credit or refund under section 
4682(g)(4) of the Internal Revenue Code for any ozone-depleting 
chemicals covered by this certificate.
    Purchaser understands that any use by Purchaser of the ozone-
depleting chemicals to which this certificate applies other than for 
the purpose set forth in this certificate may result in the 
withdrawal by the Internal Revenue Service of Purchaser's right to 
provide a certificate.
    Purchaser will retain the business records needed to document 
the sales covered by this certificate and will make such records 
available for inspection by Government officers. Purchaser also will 
retain and make available for inspection by Government 

[[Page 52852]]
officers the certificates of its Second Purchasers.
    Purchaser has not been notified by the Internal Revenue Service 
that its right to provide a certificate has been withdrawn. In 
addition, the Internal Revenue Service has not notified Purchaser 
that the right to provide a certificate has been withdrawn from any 
Second Purchaser who will purchase ozone-depleting chemicals to 
which this certificate applies.
    Purchaser understands that the fraudulent use of this 
certificate may subject Purchaser and all parties making such 
fraudulent use of this certificate to a fine or imprisonment, or 
both, together with the costs of prosecution.
----------------------------------------------------------------------
Name of Purchaser
----------------------------------------------------------------------
Address of Purchaser
----------------------------------------------------------------------
----------------------------------------------------------------------
Taxpayer Identifying Number of Purchaser
----------------------------------------------------------------------
Title of person signing
----------------------------------------------------------------------
Printed or typed name of person signing
----------------------------------------------------------------------
Signature

    (ii) ODCs that will be used by the purchaser as propellants in 
metered-dose inhalers. If the purchaser will use the ODCs as 
propellants in metered-dose inhalers, the certificate provided by the 
purchaser must be in substantially the following form:

CERTIFICATE OF PURCHASER OF CHEMICALS THAT WILL BE USED BY THE 
PURCHASER AS PROPELLANTS IN METERED-DOSE INHALERS

(To support tax-reduced sales under section 4682(g)(4) of the Internal 
Revenue Code.)

Date-------------------------------------------------------------------

    The undersigned purchaser (Purchaser) certifies the following 
under penalties of perjury:
    The following percentage of ozone-depleting chemicals purchased 
from:
----------------------------------------------------------------------
(Name of seller)
----------------------------------------------------------------------
(Address of seller)

will be used by Purchaser as propellants in metered-dose inhalers 
(as defined in Sec. 52.4682-1(h)(3) of the Environmental Tax 
Regulations).

------------------------------------------------------------------------
                          Product                             Percentage
------------------------------------------------------------------------
CFC-11.....................................................     ________
CFC-12.....................................................     ________
CFC-114....................................................     ________
------------------------------------------------------------------------

    This certificate applies to (check and complete as applicable):

________ All shipments to Purchaser at the following location(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
________ All shipments to Purchaser under the following Purchaser 
account number(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
________ All shipments to Purchaser under the following purchase 
order(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
________ One or more shipments to Purchaser identified as follows:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    Purchaser will not claim a credit or refund under section 
4682(g)(4) of the Internal Revenue Code for any ozone-depleting 
chemicals covered by this certificate.
    Purchaser understands that any use by Purchaser of the ozone-
depleting chemicals to which this certificate applies other than as 
propellants in metered-dose inhalers may result in the withdrawal by 
the Internal Revenue Service of Purchaser's right to provide a 
certificate.
    Purchaser will retain the business records needed to document 
the use as propellants in metered-dose inhalers of the ozone-
depleting chemicals to which this certificate applies and will make 
such records available for inspection by Government officers.
    Purchaser has not been notified by the Internal Revenue Service 
that its right to provide a certificate has been withdrawn.
    Purchaser understands that the fraudulent use of this 
certificate may subject Purchaser and all parties making such 
fraudulent use of this certificate to a fine or imprisonment, or 
both, together with the costs of prosecution.
----------------------------------------------------------------------
Name of Purchaser
----------------------------------------------------------------------
Address of Purchaser
----------------------------------------------------------------------
----------------------------------------------------------------------
Taxpayer Identifying Number of Purchaser
----------------------------------------------------------------------
Title of person signing
----------------------------------------------------------------------
Printed or typed name of person signing
----------------------------------------------------------------------
Signature

    Par. 6. Section 52.4682-4 is amended by:
    1. Removing the introductory text of paragraph (b)(2).
    2. Revising the first sentence of paragraph (b)(2)(i)(B)(1).
    3. Adding paragraphs (b)(2)(vi) through (b)(2)(viii).
    4. Adding a sentence at the end of paragraph (d)(1)(i).
    5. Revising paragraph (d)(1)(iv)(A)(1).
    6. Adding paragraph (d)(4).
    7. Revising paragraph (e)(4)(i).
    8. Redesignating paragraph (e)(5) as paragraph (e)(6) and adding a 
new paragraph (e)(5).
    9. Revising Example 5 of newly designated paragraph (e)(6).
    The revisions and additions read as follows:


Sec. 52.4682-4  Floor stocks tax.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (B) * * * (1) In general. In the case of the floor stocks tax 
imposed on January 1 of a calendar year after 1990, the tax is not 
imposed on an ODC that has been mixed with any other ingredients, but 
only if it is established that such ingredients contribute to the 
accomplishment of the purpose for which the mixture will be used. * * *
* * * * *
    (vi) ODCs to be exported--(A) In general. The floor stocks tax is 
not imposed on any ODC that was sold in a qualifying sale for export 
(as defined in Sec. 52.4682-5(d)(1)).
    (B) ODCs sold before January 1, 1993. An ODC that was sold by its 
manufacturer or importer before January 1, 1993, is treated, for 
purposes of this paragraph (b)(2)(vi), as an ODC that was sold in a 
qualifying sale for export for purposes of Sec. 52.4682-5(d)(1) if the 
ODC will be exported.
    (vii) ODCs used as propellants in metered-dose inhalers; years 
after 1992--(A) In general. The floor stocks tax is not imposed on 
January 1 of calendar years after 1992 on any ODC that was sold in a 
qualifying sale for use as a propellant in a metered-dose inhaler (as 
defined in Sec. 52.4682-1(h)).
    (B) ODCs sold before January 1, 1993. An ODC that was sold by its 
manufacturer or importer before January 1, 1993, is treated, for 
purposes of this paragraph (b)(2)(vii), as an ODC that was sold in a 
qualifying sale for purposes of Sec. 52.4682-1(h) if the ODC will be 
used as a propellant in a metered-dose inhaler (within the meaning of 
Sec. 52.4682-1(h)).
    (viii) ODCs used as medical sterilants; 1993. The floor stocks tax 
is not imposed in 1993 on any ODC held for use as a medical sterilant 
(as defined in Sec. 52.4682-1(g)).
* * * * *
    (d) * * *
    (1) * * *
    (i) * * * The amount of the floor stocks tax imposed on the ODCs 
contained in a nonexempt mixture is computed on the basis of the weight 
of the ODCs in that mixture.
* * * * *
    (iv) * * *
    (A) * * *
    (1) The tentative tax amount is determined, except as provided in 
paragraph (d)(2), (3), or (4) of this section, by reference to the rate 
of tax prescribed in section 4681(b)(1)(B) and the ozone-depletion 
factors prescribed in section 4682(b).
* * * * * 

[[Page 52853]]

    (4) Methyl chloroform; 1993. In the case of methyl chloroform, the 
tentative tax amount is determined under section 4682(g)(5) for 
purposes of computing the floor stocks tax imposed on January 1, 1993.
    (e) * * *
    (4) * * *
    (i) At least 400 pounds of ODCs that are not described in paragraph 
(d)(2) or (d)(3) of this section and are otherwise subject to tax;
* * * * *
    (5) Calendar years after 1994. In the case of the floor stocks tax 
imposed on January 1 of 1995 and each following calendar year, a person 
is liable for the tax only if, on such date, the person holds--
    (i) At least 400 pounds of ODCs that are not described in paragraph 
(d)(3) or (d)(4) of this section and are otherwise subject to tax;
    (ii) At least 50 pounds of ODCs that are described in paragraph 
(d)(3) of this section and are otherwise subject to tax; or
    (iii) At least 1000 pounds of ODCs that are described in paragraph 
(d)(4) of this section and are otherwise subject to tax.
    (6) * * *

    Example 5. (a) On January 1, 1994, D holds for sale 300 pounds 
of CFC-113 (an ODC not described in paragraph (d)(2) or (d)(3) of 
this section) and 25 pounds of Halon-1301 (an ODC described in 
paragraph (d)(3) of this section). D is liable for the floor stocks 
tax imposed on January 1, 1994, because 25 pounds of Halon-1301 
exceeds the de minimis amount specified in paragraph (e)(4)(iii) of 
this section. The 300 pounds of CFC-113 is less than the amount 
specified in paragraph (e)(4)(i) of this section. Nevertheless, tax 
is imposed on both the 25 pounds of Halon-1301 and the 300 pounds of 
CFC-113.
    (b) The amount of the floor stocks tax is determined separately 
for the 300 pounds of CFC-113 and the 25 pounds of Halon-1301 and is 
equal to the difference between the tentative tax amount and the 
amount of tax previously imposed on those ODCs. For Halon-1301, for 
example, the tax is determined as follows. The tentative tax amount 
is $1,087.50 ($4.35 (the base tax amount in 1994)  x  10 (the ozone-
depletion factor for Halon-1301)  x  25 (the number of pounds 
held)). The tax previously imposed on the Halon-1301 is $6.28 ($3.35 
(the base tax amount in 1993)  x  10 (the ozone-depletion factor for 
Halon-1301)  x  0.75 percent (the applicable percentage determined 
under section 4682(g)(2)(A))  x  25 (the number of pounds held)). 
Thus, the floor stocks tax imposed on the 25 pounds of Halon-1301 in 
1994 is $1,081.22, the difference between $1,087.50 (the tentative 
tax amount) and $6.28 (the tax previously imposed).
* * * * *
    Par. 7. Section 52.4682-5 is added to read as follows:


Sec. 52.4682-5  Exports.

    (a) Overview. This section provides rules relating to the tax 
imposed under section 4681 on ozone-depleting chemicals (ODCs) that are 
exported. In general, tax is not imposed on ODCs that a manufacturer or 
importer sells for export, or for resale by the purchaser to a second 
purchaser for export, if the procedural requirements set forth in 
paragraph (d) of this section are met. The tax benefit of this 
exemption is limited, however, to the manufacturer's or importer's 
exemption amount. Thus, if the tax that would otherwise be imposed 
under section 4681 on ODCs that a manufacturer or importer sells for 
export exceeds this exemption amount, a tax equal to the excess is 
imposed on the ODCs. The exemption amount, which is determined 
separately for post-1989 ODCs and post-1990 ODCs, is calculated for 
each calendar year in accordance with the rules of paragraph (c) of 
this section. This section also provides rules under which a tax 
imposed under section 4681 on exported ODCs may be credited or 
refunded, subject to the same limit on tax benefits, if the procedural 
requirements set forth in paragraph (f) of this section are met. See 
Sec. 52.4681-1(c) for definitions relating to the tax on ODCs.
    (b) Exemption or partial exemption from tax--(1) In general. Except 
as provided in paragraph (b)(2) of this section, no tax is imposed on 
an ODC if the manufacturer or importer of the ODC sells the ODC in a 
qualifying sale for export (within the meaning of paragraph (d)(1) of 
this section).
    (2) Tax imposed if exemption amount exceeded--(i) Post-1989 ODCs. 
The tax imposed on post-1989 ODCs that a manufacturer or importer sells 
in qualifying sales for export during a calendar year is equal to the 
excess (if any) of--
    (A) The tax that would be imposed on the ODCs but for section 
4682(d)(3) and this section; over
    (B) The post-1989 ODC exemption amount for the calendar year 
determined under paragraph (c)(1) of this section.
    (ii) Post-1990 ODCs. The tax imposed on post-1990 ODCs that a 
manufacturer or importer sells in qualifying sales for export during a 
calendar year is equal to the excess (if any) of--
    (A) The tax that would be imposed on the ODCs but for section 
4682(d)(3) and this section; over
    (B) The post-1990 ODC exemption amount for the calendar year 
determined under paragraph (c)(2) of this section.
    (iii) Allocation of tax--(A) Post-1989 ODCs. The tax (if any) 
determined under paragraph (b)(2)(i) of this section may be allocated 
among the post-1989 ODCs on which it is imposed in any manner, provided 
that the amount allocated to any post-1989 ODC does not exceed the tax 
that would be imposed on such ODC but for section 4682(d)(3) and this 
section.
    (B) Post-1990 ODCs. The tax (if any) determined under paragraph 
(b)(2)(ii) of this section may be allocated among the post-1990 ODCs on 
which it is imposed in any manner, provided that the amount allocated 
to any post-1990 ODC does not exceed the tax that would be imposed on 
such ODC but for section 4682(d)(3) and this section.
    (c) Exemption amount--(1) Post-1989 ODC exemption amount. A 
manufacturer's or importer's post-1989 ODC exemption amount for a 
calendar year is the sum of the following amounts:
    (i) The 1986 export percentage of the aggregate tax that would (but 
for section 4682(d), section 4682(g), and this section) be imposed 
under section 4681 on the maximum quantity, determined without regard 
to additional production allowances, of post-1989 ODCs that the person 
is permitted to manufacture during the calendar year under rules 
prescribed by the Environmental Protection Agency (40 CFR part 82).
    (ii) The aggregate tax that would (but for section 4682(d), section 
4682(g), and this section) be imposed under section 4681 on post-1989 
ODCs that the person manufactures during the calendar year under any 
additional production allowance granted by the Environmental Protection 
Agency.
    (iii) The aggregate tax that would (but for section 4682(d), 
section 4682(g), and this section) be imposed under section 4681 on 
post-1989 ODCs imported by the person during the calendar year.
    (2) Post-1990 ODC exemption amount. A manufacturer's or importer's 
post-1990 ODC exemption amount for a calendar year is the sum of the 
following amounts:
    (i) The 1989 export percentage of the aggregate tax that would (but 
for section 4682(d), section 4682(g), and this section) be imposed 
under section 4681 on the maximum quantity, determined without regard 
to additional production allowances, of post-1990 ODCs the person is 
permitted to manufacture during the calendar year under rules 
prescribed by the Environmental Protection Agency.
    (ii) The aggregate tax that would (but for section 4682(d), section 
4682(g), and 

[[Page 52854]]
this section) be imposed under section 4681 on post-1990 ODCs that the 
person manufactures during the calendar year under any additional 
production allowance granted by the Environmental Protection Agency.
    (iii) The aggregate tax that would (but for section 4682(d), 
section 4682(g), and this section) be imposed under section 4681 on 
post-1990 ODCs imported by the person during the calendar year.
    (3) Definitions--(i) 1986 export percentage. See section 
4682(d)(3)(B)(ii) for the meaning of the term 1986 export percentage.
    (ii) 1989 export percentage. See section 4682(d)(3)(C) for the 
meaning of the term 1989 export percentage.
    (d) Procedural requirements relating to tax-free sales for export--
(1) Qualifying sales--(i) In general. A sale of ODCs is a qualifying 
sale for export if--
    (A) The seller is the manufacturer or importer of the ODCs and the 
purchaser is a purchaser for export or for resale to a second purchaser 
for export;
    (B) At the time of the sale, the seller and the purchaser are 
registered with the Internal Revenue Service; and
    (C) At the time of the sale, the seller--
    (1) Has an unexpired certificate in substantially the form set 
forth in paragraph (d)(3)(ii) of this section from the purchaser; and
    (2) Relies on the certificate in good faith.
    (ii) Qualifying resale. A sale of ODCs is a qualifying resale for 
export if--
    (A) The seller acquired the ODCs in a qualifying sale for export 
and the purchaser is a second purchaser for export;
    (B) At the time of the sale, the seller and the purchaser are 
registered with the Internal Revenue Service; and
    (C) At the time of the sale, the seller--
    (1) Has an unexpired certificate in substantially the form set 
forth in paragraph (d)(3)(ii)(A) of this section from the purchaser of 
the ODCs; and
    (2) Relies on the certificate in good faith.
    (iii) Special rule relating to sales made before July 1, 1993. If a 
sale for export made before July 1, 1993, satisfies all the 
requirements of paragraph (d)(1)(i) or (ii) of this section other than 
those relating to registration, the sale will be treated as a 
qualifying sale (or resale) for export. Thus, a sale made before July 
1, 1993, may be a qualifying sale (or resale) even if the parties to 
the sale are not registered and the required certificate does not 
contain statements regarding registration.
    (iv) Registration. Application for registration is made on Form 637 
(or any other form designated for the same use by the Commissioner) 
according to the instructions applicable to the form. A person is 
registered only if the district director has issued that person a 
letter of registration and it has not been revoked or suspended. The 
effective date of the registration must be no earlier than the date on 
which the district director signs the letter of registration. Each 
business unit that has, or is required to have, a separate employer 
identification number is treated as a separate person.
    (2) Good faith reliance. The requirements of paragraph (d)(1) of 
this section are not satisfied with respect to a sale of ODCs and the 
sale is not a qualifying sale (or resale) if, at the time of the sale--
    (i) The seller has reason to believe that the ODCs are not 
purchased for export; or
    (ii) The Internal Revenue Service has notified the seller that the 
purchaser's registration has been revoked or suspended.
    (3) Certificate--(i) In general. The certificate required under 
paragraph (d)(1) of this section consists of a statement executed and 
signed under penalties of perjury by a person with authority to bind 
the purchaser, in substantially the same form as model certificates 
provided in paragraph (d)(3)(ii) of this section, and containing all 
information necessary to complete such model certificate. A new 
certificate must be given if any information in the current certificate 
changes. The certificate may be included as part of any business 
records normally used to document a sale. The certificate expires on 
the earliest of the following dates--
    (A) The date one year after the effective date of the certificate;
    (B) The date the purchaser provides a new certificate to the 
seller; or
    (C) The date the seller is notified by the Internal Revenue Service 
or the purchaser that the purchaser's registration has been revoked or 
suspended.
    (ii) Model certificates--(A) ODCs sold for export by the purchaser. 
If the purchaser will export the ODCs, the certificate must be in 
substantially the following form:

 CERTIFICATE OF PURCHASER OF CHEMICALS FOR EXPORT BY THE PURCHASER

(To support tax-free sales under section 4682(d)(3) of the Internal 
Revenue Code.)

Effective Date---------------------------------------------------------
Expiration Date--------------------------------------------------------
                    (not more than one year
                      after effective date)
    The undersigned purchaser (Purchaser) certifies the following 
under penalties of perjury:
    Purchaser is registered with the Internal Revenue Service as a 
purchaser of ozone-depleting chemicals for export under registration 
number __________. Purchaser's registration has not been suspended 
or revoked by the Internal Revenue Service.
     The following percentage of ozone-depleting chemicals purchased 
from:
----------------------------------------------------------------------
(Name of seller)
----------------------------------------------------------------------
(Address of seller)
----------------------------------------------------------------------
(Taxpayer identifying number of seller)

are purchased for export by Purchaser.

------------------------------------------------------------------------
                          Product                             Percentage
------------------------------------------------------------------------
 CFC-11....................................................   __________
 CFC-12....................................................   __________
 CFC-113...................................................   __________
 CFC-114...................................................   __________
 CFC-115...................................................   __________
 Halon-1211................................................   __________
 Halon-1301................................................   __________
 Halon-2402................................................   __________
 Carbon tetrachloride......................................   __________
 Methyl chloroform.........................................   __________
   Other (specify)                                                      
  ______________...........................................   __________
------------------------------------------------------------------------

    This certificate applies to (check and complete as applicable):

______ All shipments to Purchaser at the following location(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following Purchaser 
account number(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following purchase 
order(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ One or more shipments to Purchaser identified as follows:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------

    Purchaser understands that Purchaser will be liable for tax 
imposed under section 4681 if Purchaser does not export the ODCs to 
which this certificate applies.

    Purchaser understands that any use of the ODCs to which this 
certificate applies other than for export may result in the 
revocation of Purchaser's registration.

    Purchaser will retain the business records needed to document 
the export of the ozone-depleting chemicals to which this 
certificate applies and will make such records available for 
inspection by Government officers.

    Purchaser has not been notified by the Internal Revenue Service 
that its registration has been revoked or suspended.

    Purchaser understands that the fraudulent use of this 
certificate may subject Purchaser and all parties making such 
fraudulent use of this certificate to a fine or imprisonment, or 
both, together with the costs of prosecution.


[[Page 52855]]

----------------------------------------------------------------------
Name of Purchaser
1---------------------------------------------------------------------
Address of Purchaser
----------------------------------------------------------------------
----------------------------------------------------------------------
Taxpayer Identifying Number of Purchaser
----------------------------------------------------------------------
Title of person signing
----------------------------------------------------------------------
Printed or typed name of person signing
----------------------------------------------------------------------
 Signature

    (B) ODCs sold by the purchaser for resale for export by the second 
purchaser. If the purchaser will resell the ODCs to a second purchaser 
for export by the second purchaser, the certificate must be in 
substantially the following form:

CERTIFICATE OF PURCHASER OF CHEMICALS FOR RESALE FOR EXPORT BY THE 
SECOND PURCHASER

(To support tax-free sales under section 4682(d)(3) of the Internal 
Revenue Code.)

Effective Date---------------------------------------------------------
Expiration Date--------------------------------------------------------
                    (not more than one year
                      after effective date)
    The undersigned purchaser (Purchaser) certifies the following 
under penalties of perjury:
    Purchaser is registered with the Internal Revenue Service as a 
purchaser of ozone-depleting chemicals for export under registration 
number __________. Purchaser's registration has not been suspended 
or revoked by the Internal Revenue Service.
    The following percentage of ozone-depleting chemicals purchased 
from:
----------------------------------------------------------------------
(Name of seller)
----------------------------------------------------------------------
(Address of seller)
----------------------------------------------------------------------
(Taxpayer identifying number of seller)

will be resold by Purchaser to persons (Second Purchasers) that 
certify to Purchaser that they are (1) registered with the Internal 
Revenue Service as purchasers of ozone-depleting chemicals for 
export and (2) purchasing the ozone-depleting chemicals for export.

------------------------------------------------------------------------
                          Product                             Percentage
------------------------------------------------------------------------
CFC-11.....................................................   __________
CFC-12.....................................................   __________
CFC-113....................................................   __________
CFC-114....................................................   __________
CFC-115....................................................   __________
Halon-1211.................................................   __________
Halon-1301.................................................   __________
Halon-2402.................................................   __________
Carbon tetrachloride.......................................   __________
Methyl chloroform..........................................   __________
  Other (specify)                                                       
______________.............................................   __________
------------------------------------------------------------------------

    This certificate applies to (check and complete as applicable):

______ All shipments to Purchaser at the following location(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following Purchaser 
account number(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ All shipments to Purchaser under the following purchase 
order(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
______ One or more shipments to Purchaser identified as follows:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
    Purchaser understands that Purchaser will be liable for tax 
imposed under section 4681 if Purchaser does not resell the ODCs to 
which this certificate applies to a Second Purchaser for export or 
export those ODCs.
    Purchaser understands that any use of the ODCs to which this 
certificate applies other than for resale to Second Purchasers for 
export may result in the revocation of Purchaser's registration.
    Purchaser will retain the business records needed to document 
the sales to Second Purchasers for export covered by this 
certificate and will make such records available for inspection by 
Government officers. Purchaser also will retain and make available 
for inspection by Government officers the certificates of its Second 
Purchasers.
    Purchaser has not been notified by the Internal Revenue Service 
that its registration has been revoked or suspended. In addition, 
the Internal Revenue Service has not notified Purchaser of the 
revocation or suspension of the registration of any Second Purchaser 
who will purchase ozone-depleting chemicals to which this 
certificate applies.
    Purchaser understands that the fraudulent use of this 
certificate may subject Purchaser and all parties making such 
fraudulent use of this certificate to a fine or imprisonment, or 
both, together with the costs of prosecution.
----------------------------------------------------------------------
Name of Purchaser
----------------------------------------------------------------------
Address of Purchaser
----------------------------------------------------------------------
----------------------------------------------------------------------
Taxpayer Identifying Number of Purchaser
----------------------------------------------------------------------
Title of person signing
----------------------------------------------------------------------
Printed or typed name of person signing
----------------------------------------------------------------------
Signature

    (4) Documentation of export--(i) After December 31, 1992. After 
December 31, 1992, to document the exportation of any ODCs, a person 
must have the evidence required by the Environmental Protection Agency 
as proof that the ODCs were exported.
    (ii) Before January 1, 1993. Before January 1, 1993, to document 
the exportation of any ODCs, a person must have evidence substantially 
similar to that required by the Environmental Protection Agency as 
proof that the ODCs were exported.
    (e) Purchaser liable for tax--(1) Purchaser in qualifying sale. The 
purchaser of ODCs in a qualifying sale for export is treated as the 
manufacturer of the ODC and is liable for any tax imposed under section 
4681 (determined without regard to exemptions for qualifying sales 
under this section or Sec. 52.4682-1) when it sells or uses the ODCs if 
that purchaser does not-
    (i) Export the ODCs and document the exportation of the ODCs in 
accordance with paragraph (d)(4) of this section; or
    (ii) Sell the ODCs in a qualifying resale for export.
    (2) Purchaser in qualifying resale. The purchaser of ODCs in a 
qualifying resale for export is treated as the manufacturer of the ODC 
and is liable for any tax imposed under section 4681 (determined 
without regard to exemptions for qualifying sales under this section or 
Sec. 52.4682-1) when it sells or uses the ODCs if that purchaser does 
not export the ODCs and document the exportation of the ODCs in 
accordance with paragraph (d)(4) of this section.
    (f) Credit or refund--(1) In general. Except as provided in 
paragraph (f)(2) of this section, a manufacturer or importer that meets 
the conditions of paragraph (f)(3) of this section is allowed a credit 
or refund (without interest) of the tax it paid to the government under 
section 4681 on ODCs that are exported. Persons other than 
manufacturers and importers of ODCs cannot file claims for credit or 
refund of tax imposed under section 4681 on ODCs that are exported.
    (2) Limitation. The amount of credits or refunds of tax under this 
paragraph (f) is limited--
    (i) In the case of tax paid on post-1989 ODCs sold during a 
calendar year, to the amount (if any) by which the post-1989 exemption 
amount for the year exceeds the tax benefit provided to such post-1989 
ODCs under paragraph (b) of this section; and
    (ii) In the case of tax paid on post-1990 ODCs sold during a 
calendar year, to the amount (if any) by which the post-1990 exemption 
amount for the year exceeds the tax benefit provided to such post-1990 
ODCs under paragraph (b) of this section.
    (3) Conditions to allowance of credit or refund. The conditions of 
this paragraph (f)(3) are met if the manufacturer or importer--
    (i) Documents the exportation of the ODCs in accordance with 
paragraph (d)(4) of this section; and
    (ii) Establishes that it has--

[[Page 52856]]

    (A) Repaid or agreed to repay the amount of the tax to the person 
that exported the ODC; or
    (B) Obtained the written consent of the exporter to the allowance 
of the credit or the making of the refund.
    (4) Procedural rules. See section 6402 and the regulations under 
that section for procedural rules relating to filing a claim for credit 
or refund of tax.
    (g) Examples. The following examples illustrate the provisions of 
this section. In each example, the sales are qualifying sales for 
export (within the meaning of paragraph (d)(1) of this section), all 
registration, certification, and documentation requirements of this 
section are met, and the ODCs sold for export are exported:

    Example 1. (i) Facts. D, a corporation, manufactures CFC-11, a 
post-1989 ODC, and does not manufacture or import any other ODCs. In 
1993, D manufactures 100,000 pounds of CFC-11, the maximum quantity 
D is allowed to manufacture in 1993 under EPA regulations. D has no 
additional production allowance from EPA for 1993. In 1993, the tax 
on CFC-11 is $3.35 per pound. D's 1986 export percentage for post-
1989 ODCs is 50%. In 1993, D sells 80,000 pounds of CFC-11 in 
qualifying sales for export. The remainder of D's production is not 
exported.
    (ii) Components of limit on tax benefit.  Under paragraph (c)(1) 
of this section, D's exemption amount for 1993 is equal to the sum 
of--
    (A) D's 1986 export percentage multiplied by the aggregate tax 
that would (but for section 4682(d), section 4682(g), and 
Sec. 52.4682-5) be imposed under section 4681 on the maximum 
quantity of post-1989 ODCs D is permitted to manufacture during 
1993;
    (B) The aggregate tax that would (but for section 4682(d), 
section 4682(g), and Sec. 52.4682-5) be imposed under section 4681 
on post-1989 ODCs that D manufactures during 1993 under an 
additional production allowance; and
    (C) The aggregate tax that would (but for section 4682(d), 
section 4682(g), and Sec. 52.4682-5) be imposed under section 4681 
on post-1989 ODCs imported by D during 1993.
    (iii) Limit on tax benefit. The amounts described in paragraphs 
(ii)(B) and (C) of this Example 1 are equal to zero. Thus, D's 1993 
exemption amount is $167,500 (50% of $335,000 (the tax that would 
otherwise be imposed on 100,000 pounds of CFC-11 in 1993)).
    (iv) Application of limit on tax benefit. Under paragraph (b)(2) 
of this section, the tax imposed on the CFC-11 D sells for export is 
equal to the excess of the tax that would have been imposed on those 
ODCs but for section 4682(d) and Sec. 52.4682-5, over D's 1993 
exemption amount. But for Sec. 52.4682-5, $268,000 ($3.35 x 80,000) 
of tax would have been imposed on the CFC-11 sold for export. Thus, 
$100,500 ($268,000 - $167,500) of tax is imposed on the CFC-11 sold 
for export.
    Example 2. (i) Facts. E, a corporation, manufactures CFC-11, a 
post-1989 ODC, and does not manufacture or import any other ODCs. In 
1993, E manufactures 100,000 pounds of CFC-11, the maximum quantity 
E is allowed to manufacture in 1993 under EPA regulations. E has no 
additional production allowance from EPA for 1993. In 1993, the tax 
on CFC-11 is $3.35 per pound. E's 1986 export percentage for post-
1989 ODCs is 50%. In 1993, E sells 45,000 pounds of CFC-11 tax free 
in qualifying sales for export and pays tax under section 4681 on an 
additional 35,000 pounds of exported CFC-11. The remainder of E's 
production is not exported.
    (ii) Limit on tax benefit. E's 1993 exemption amount is 
$167,500, (50% of $335,000 (the tax that would otherwise be imposed 
on 100,000 pounds of CFC-11 in 1993)). The credit or refund allowed 
to E under paragraph (f) of this section is limited under paragraph 
(f)(2) of this section to the amount by which E's 1993 exemption 
amount exceeds E's 1993 tax benefit under paragraph (b) of this 
section.
    (iii) Application of limit on tax benefit. Because E sold 45,000 
pounds of CFC-11 tax free in qualifying sales for export in 1993, 
E's 1993 tax benefit under paragraph (b) of this section is $150,750 
($3.35 x 45,000). Thus, the credit or refund allowed to E under 
paragraph (f) of this section is limited to $16,750 
($167,500-$150,750).
    Example 3. (i) Facts. F, a corporation, manufactures CFC-11, a 
post-1989 ODC, and does not manufacture any other ODCs. F also 
imports CFC-11. In 1993, F manufactures 60,000 pounds of CFC-11 
(100,000 pounds is the maximum quantity F is allowed to manufacture 
in 1993 under EPA regulations) and imports 40,000 pounds. F has no 
additional production allowance from EPA for 1993. In 1993, the tax 
on CFC-11 is $3.35 per pound. F's 1986 export percentage for post-
1989 ODCs is 50%. In 1993, F sells 45,000 pounds of CFC-11 tax free 
in qualifying sales for export and pays tax under section 4681 on an 
additional 35,000 pounds of exported CFC-11. The remainder of F's 
production is not exported.
    (ii) Limit on tax benefit. F's 1993 exemption amount is 
$301,500, ($167,500 (50% of $335,000 (the tax that would otherwise 
be imposed on 100,000 pounds of CFC-11 in 1993) plus $134,000 (the 
tax that would otherwise be imposed on the 40,000 pounds imported)). 
The credit or refund allowed to F under paragraph (f) of this 
section is limited under paragraph (f)(2) of this section to the 
amount by which F's 1993 exemption amount exceeds F's 1993 tax 
benefit under paragraph (b) of this section.
    (iii) Application of limit on tax benefit. Because F sold 45,000 
pounds of CFC-11 tax free in qualifying sales for export in 1993, 
F's 1993 tax benefit under paragraph (b) of this section is $150,750 
($3.35 x 45,000). Thus, the credit or refund allowed to F under 
paragraph (f) of this section is limited to $150,750 
($301,500-$150,750). The limitation does not affect F's credit or 
refund because the tax F paid on exported ODCs is only $117,250 
($3.35 x 35,000).

    (h) Effective date. This section is effective January 1, 1993.

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

    Par. 8. The authority citation for part 602 continues to read as 
follows:

    Authority: 26 U.S.C. 7805.

    Par. 9. In Sec. 602.101, paragraph (c) is amended by revising the 
entries for 52.4682-2(b) and 52.4682-2(d) and adding entries in 
numerical order to the table to read as follows:


Sec. 602.601  OMB Control numbers.

* * * * *
    (c) ***

------------------------------------------------------------------------
                                                                Current 
                                                                  OMB   
     CFR part or section where identified and described         control 
                                                                  No.   
------------------------------------------------------------------------
                                                                        
                              *  *  *  *  *                             
52.4682-2(b)................................................   1545-1153
                                                               1545-1361
52.4682-2(d)................................................   1545-1153
                                                               1545-1361
                                                                        
                              *  *  *  *  *                             
52.4682-5(d)................................................   1545-1361
52.4682-5(f)................................................   1545-1361
                                                                        
                              *  *  *  *  *                             
------------------------------------------------------------------------

    Approved: August 31, 1995.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Cynthia G. Beerbower,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 95-24603 Filed 10-10-95; 8:45 am]
BILLING CODE 4830-01-U