[Federal Register Volume 61, Number 137 (Tuesday, July 16, 1996)]
[Rules and Regulations]
[Pages 37004-37007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17995]


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[[Page 37005]]


DEPARTMENT OF THE TREASURY
27 CFR Part 53

[T.D. ATF-380]
RIN 1512-AB42


Manufacturers Excise Taxes--Firearms and Ammunition (95R-055P)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of 
the Treasury.

ACTION: Temporary rule (Treasury decision).

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is amending 
the regulations in 27 CFR Part 53 to simplify the regulations relating 
to exemption certificates. The regulations are being revised to give 
taxpayers the option of using a preprinted document for use as 
exemption certificates and vendor(vendee) statements or designing their 
own certificates and statements using specified information. The 
temporary rule will remain in effect until superseded by final 
regulations.
    These amendments are part of the Administration's Reinventing 
Government effort to reduce burden and streamline requirements.
    In the proposed rules section of this Federal Register, ATF is also 
issuing a notice of proposed rulemaking inviting comments on the 
temporary rule for a 90-day period following the publication date of 
this temporary rule.

EFFECTIVE DATE: The temporary regulations are effective July 16, 1996.

ADDRESS: Send written comments to: Chief, Regulations Branch, Bureau of 
Alcohol, Tobacco and Firearms, P.O. Box 50221, Washington, DC 20226-
0221.

FOR FURTHER INFORMATION CONTACT: Mary Lou Blake, Regulations Branch, 
Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts Ave., NW, 
Washington, DC 20226; (202-927-8210).

SUPPLEMENTARY INFORMATION:

Background

    Under current regulations, persons who sell firearms or ammunition 
tax-free must obtain certain exemption certificates or statements to 
support such sales. Current regulations include suggested forms for 
each type of statement and certificate. These certificates and 
statements are now available through the Bureau's Distribution Center. 
Taxpayers may order these preprinted documents and reproduce them as 
needed.
    Since the forms are available from ATF, there is no need to 
reproduce them in the regulations. Accordingly, this Treasury Decision 
removes the text of the forms from the regulations, but retains all 
information required for taxpayers who wish to design and use their own 
certificates or statements.
    This temporary rule also includes technical amendments to the 
regulations in 27 CFR Part 53.

Executive Order 12866

    It has been determined that this temporary rule is not a 
significant regulatory action as defined in E.O. 12866. Therefore, a 
regulatory assessment is not required.

Administrative Procedure Act

    Because this document merely furnishes the taxpayer with an 
optional method of providing exemption certificates or statements and 
does not change the existing regulatory requirements, it is found to be 
impracticable to issue this Treasury decision with notice and public 
procedure under 5 U.S.C. 553(b), or subject to the effective date 
limitation in section 553(d).

Regulatory Flexibility Act

    It is hereby certified that this regulation will not have a 
significant economic impact on a substantial number of small entities 
or impose or otherwise cause an increase in the reporting, 
recordkeeping or other compliance burdens on a substantial number of 
small entities. The factual basis for such certification is that this 
revision does not add any new requirement for reporting or 
recordkeeping. This revision serves only to clarify and streamline 
current regulatory requirements. Pursuant to section 7805(f) of the 
Internal Revenue Code, this proposed regulation has been submitted to 
the Chief Counsel for Advocacy of the Small Business Administration for 
comment on its impact on small business.

Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1980, Public Law 
96-511, 44 U.S.C. chapter 35, and its implementing regulations, 5 CFR 
part 1329, do not apply to this regulation because there are no new 
reporting or recordkeeping requirements.

Drafting Information

    The author of this document is Mary Lou Blake, Regulations Branch, 
Bureau of Alcohol, Tobacco and Firearms.

List of Subjects in 27 CFR Part 53

    Administrative practice and procedure, Arms and munitions, 
Authority delegations, Exports, Imports, Penalties, Reporting and 
recordkeeping requirements.

Authority and Issuance

    27 CFR Part 53 is amended to read as follows:

PART 53--MANUFACTURERS EXCISE TAXES--FIREARMS AND AMMUNITION

    Paragraph 1. The authority citation for 27 CFR Part 53 continues to 
read as follows:

    Authority: 26 U.S.C. 4181, 4182, 4216-4219, 4221-4223, 4225, 
6001, 6011, 6020, 6021, 6061, 6071, 6081, 6091, 6101-6104, 6109, 
6151, 6155, 6161, 6301-6303, 6311, 6402, 6404, 6416.

    Par. 2. Section 53.3 is revised to read as follows:


Sec. 53.3  Exemption certificates.

    Several sections of the regulations in this part, relating to sales 
exempt from manufacturers excise tax, require the manufacturer to 
obtain an exemption certificate from the purchaser to substantiate the 
exempt character of the sale. Any form of exemption certificate will be 
acceptable if it includes all the information required to be contained 
in such a certificate by the pertinent sections of the regulations in 
this part. These certificates are available as preprinted documents 
which may be ordered from the Bureau's Distribution Center (see 
Sec. 53.21 for the address of the Distribution Center). The preprinted 
certificates may be reproduced as needed.
    Par. 3. Section 53.131 is amended by revising the third sentence in 
paragraph (a)(5) to read as follows:


Sec. 53.131  Tax-free sales; general rule.

    (a) * * *
* * * * *
    (5) * * * See paragraph (c) of this section for provisions relating 
to evidence required in support of tax-free sales. * * *
* * * * *
    Par. 4. Section 53.132 is amended by revising paragraph (c)(2)(i) 
and by adding paragraph (c)(2)(iii) to read as follows:


Sec. 53.132  Tax-free sale of article to be used for, or resold for, 
further manufacture.

* * * * *
    (c) * * *
    (2) * * *
    (i) Certificate of purchaser. The proof of resale to be received by 
the

[[Page 37006]]

manufacturer, as required under section 4221(b)(1) of the Code, may 
consist of either a copy of the invoice of the manufacturer's vendee 
directed to his purchaser which discloses the certificate of registry 
number held by each party or a statement described in this paragraph. 
In the case of an invoice of manufacturer's vendee, it must appear from 
such invoice (or by statement attached thereto) that the article was in 
fact resold for use in further manufacture. In lieu of such an invoice, 
proof of resale may consist of a statement, executed and signed by the 
manufacturer's vendee which includes the following:
    (A) Date statement was executed.
    (B) Name and address of manufacturer's vendee (if other than the 
person executing statement).
    (C) Certificate of registry number held by vendee.
    (D) Specify article(s) purchased tax-free, by whom purchased, 
certificate of registry number of second purchaser, date of 
purchase(s), whether articles were purchased as material in the 
manufacture or production of, or as a component part or parts of, an 
article or articles taxable under Chapter 32 of the Code.
    (E) Statement that person executing statement or manufacturer's 
vendee possesses proof of tax-free resale of the article(s) in the form 
of purchase orders and sales invoices and identifying the person who 
will maintain custody of such proof for 3 years from the date of the 
statement and will make such proof available for inspection by ATF 
during such 3 year period.
    (F) Statement that a previous statement has not been executed in 
respect of such certificate of resale and that the person signing the 
statement is aware that fraudulent use of the statement may subject the 
person signing the statement and all parties making fraudulent use of 
the statement to all applicable criminal penalties under the Code.
    (G) Name, signature, and title of individual executing statement.
    (ii) * * *
    (iii) ATF I 5600.37. A preprinted statement, ATF I 5600.37, 
Statement of Manufacturer's Vendee, is available from the Bureau's 
Distribution Center which, when completed, contains all necessary 
information for a properly executed statement. Extra copies of ATF I 
5600.37 may be reproduced as needed.
    Par. 5. Section 53.133 is amended by revising paragraph (d)(2) and 
by adding paragraph (d)(4) to read as follows:


Sec. 53.133  Tax-free sale of article for export, or for resale by the 
purchaser to a second purchaser for export.

* * * * *
    (d) * * *
* * * * *
    (2) In any case where the manufacturer is not the exporter, the 
manufacturer must have in its possession a statement from the vendee to 
whom the manufacturer sold the article stating the following:
    (i) Date statement was executed.
    (ii) Name and address of manufacturer's vendee (if other than the 
person executing statement).
    (iii) Certificate of registry number held by vendee.
    (iv) Specify article(s) purchased tax-free, by whom purchased, and 
date of purchase.
    (v) Statement that article(s) was either exported in due course by 
the vendee or was sold to another person who in due course exported the 
article(s).
    (vi) Name and address of vendee who will maintain possession of the 
proof of exportation documents, description of the documents, and 
statement that vendee will maintain documents for 3 years and make them 
available to ATF for inspection.
    (vii) Statement that a previous statement has not been executed in 
respect of the articles covered by this statement and that fraudulent 
use of this statement may subject person executing statement and all 
parties making fraudulent use of statement to all applicable criminal 
penalties under the Code.
    (viii) Name, signature, title, and address of individual executing 
certificate.
    (3) * * *
    (4) ATF I 5600.36. A preprinted statement, ATF I 5600.36, Statement 
of Manufacturer's Vendee, is available from the Bureau's Distribution 
Center which, when completed, contains all necessary information for a 
properly executed statement. Extra copies of ATF I 5600.36 may be 
reproduced as needed.
    Par. 6. Section 53.134 is amended by revising paragraph (d)(2)(iii) 
and by adding paragraph (d)(2)(iv) to read as follows:


Sec. 53.134  Tax-free sale of articles for use by the purchaser as 
supplies for vessels or aircraft.

* * * * *
    (d) * * *
    (2) * * *
    (iii) Acceptable form of exemption certificate. A certificate of 
exemption to support tax-free sales under this section must include the 
following:
    (A) Name of owner, charterer, or authorized agent.
    (B) Name of company and vessel.
    (C) List article(s) covered by the certificate or beginning and 
ending dates during which orders will be placed (not to exceed 12 
calendar quarters).
    (D) Statement that articles will be used only for fuel supplies, 
ships' stores, sea stores, or legitimate equipment on a vessel 
belonging to one of the class of vessels to which section 4221 of the 
Code applies. Identify class of vessel certificate covers (see 
paragraphs (a) and (b) of this section).
    (E) If articles are purchased for use on civil aircraft engaged in 
foreign trade or trade between the United States and any of its 
possessions, state the country in which the aircraft is registered.
    (F) Statement that it is understood that if any articles are used 
for any purpose other than as stated in the certificate, or are resold 
or otherwise disposed of, the person executing the certificate must 
notify the manufacturer.
    (G) Statement that the certificate shall not be used to purchase 
tax-free articles for use as supplies, etc. on pleasure vessels or any 
type of aircraft except: (1) Civil aircraft employed in foreign trade 
or trade between the United States and any of its possessions; (2) 
Aircraft owned by the United States or any foreign country and 
constituting a part of the armed forces thereof.
    (H) Statement that it is understood that any fraudulent use of the 
certificate may subject person executing certificate and all parties 
making fraudulent use of the certificate to all applicable criminal 
penalties under the Code.
    (I) Statement that person executing certificate is prepared to 
establish by satisfactory evidence the purpose for which the article(s) 
was used.
    (J) Date, name, signature, and address of person executing the 
certificate.
    (iv) ATF I 5600.34. A preprinted certificate, ATF I 5600.34, 
Exemption Certificate, is available from the Bureau's Distribution 
Center which, when completed, contains all necessary information for a 
properly executed certificate. Extra copies of ATF I 5600.34 may be 
reproduced as needed.
    Par. 7. Section 53.135 is amended by revising paragraph (c)(1) and 
by adding paragraph (c)(3) to read as follows:


Sec. 53.135  Tax-free sale of articles to State and local governments 
for their exclusive use.

* * * * *
    (c) * * *
    (1) In the case of a State or local government which is registered 
(see Sec. 53.141 for provisions under which a State or local government 
may register if it so desires), the provisions of

[[Page 37007]]

paragraph (c) of Sec. 53.131 have application as to the evidence 
required in support of tax-free sales. If a State or local government 
is not registered, the evidence required in support of a tax-free sale 
to the State or local government shall, except as provided in paragraph 
(c)(2) of this section, consist of a certificate, executed and signed 
by an officer or employee authorized by the State or local government 
to execute and sign the certificate. If it is impracticable to furnish 
a separate certificate for each order or contract because of frequency 
of purchases, a certificate covering all orders between given dates 
(such period not to exceed 12 calendar quarters) will be acceptable. 
The certificates and proper records of invoices, orders, etc., relative 
to tax-free sales must be retained by the manufacturer as provided in 
Sec. 53.24(d). A certificate of exemption to support tax-free sales 
under this section must contain the following:
    (i) Title of official executing certificate, branch of government, 
date executed, and statement that official is authorized to execute 
certificate.
    (ii) List articles covered by the certificate or beginning and 
ending dates during which orders will be placed by the purchaser 
(period not to exceed 12 calendar quarters).
    (iii) Name of manufacturer from which articles purchased.
    (iv) Governmental unit purchasing articles.
    (v) Statement that is understood that articles purchased under this 
certificate of exemption are limited to use exclusively by the 
purchasing governmental entity.
    (vi) Statement that is understood that any fraudulent use of this 
certificate may subject the person executing the certificate and all 
parties making fraudulent use of the certificate to all applicable 
criminal penalties under the Code.
    (vii) Name, address, and signature of person executing the 
certificate.
    (2) * * *
    (3) ATF I 5600.35. A preprinted certificate, ATF I 5600.35, 
Exemption Certificate, is available from the Bureau's Distribution 
Center which, when completed, contains all necessary information for a 
properly executed certificate. Extra copies of ATF I 5600.35 may be 
reproduced as needed.
* * * * *
    Par. 8. Section 53.179 is amended by revising paragraph (b)(1)(iii) 
and by adding paragraph (b)(1)(iv) to read as follows:


Sec. 53.179  Supporting evidence required in case of manufacturers tax 
involving exportations, uses, sales, or resales.

* * * * *
    (b) * * *
    (1) * * *
    (iii) Certificate of ultimate vendor. Any certificate executed and 
signed by an ultimate vendor as evidence to be retained by the person 
who paid the tax as provided in paragraph (a)(4) of this section may be 
executed with respect to any one or more overpayments by the person 
which arose under section 6416(b)(2) and Sec. 53.178 by reason of 
exportations, uses, sales or resales, occurring within any period of 
not more than 12 consecutive calendar quarters, the beginning and 
ending dates of which are specified in the certificate. A certificate 
supporting a claim for credit or refund under this section shall 
contain the following:
    (A) Name of ultimate vendor if other than person executing the 
certificate.
    (B) Statement that article(s) was purchased by the ultimate vendor 
tax-paid and was thereafter exported, used, sold, or resold.
    (C) Description of proof which supports exportation or certificate 
as to use executed by ultimate purchaser.
    (D) Statement that ultimate vendor retains such proof for 3 years 
from the date of the statement and will, upon request, supply such 
proof at any time within such 3 year period to the taxpayer to 
establish that credit or refund is due in respect of the article.
    (E) Statement that to the best knowledge and belief of the person 
executing the certificate, no statement in respect of the proof of 
exportation or certificate has previously been executed and that the 
person executing the certificate understands that any fraudulent use of 
the certificate may subject the person executing the certificate or any 
other party to all applicable criminal penalties under the Code.
    (F) Name, title, address and signature of person executing 
certificate and date signed.
    (G) Description of all articles covered by the certificate, with 
the corresponding vendor's invoice number, date of resale of article, 
quantity, whether articles were exported or used and the use made of 
article or to be made of article.
    (iv) ATF I 5600.33. ATF I 5600.33, Statement of Ultimate Vendor, is 
available from the Bureau's Distribution Center which, when completed, 
contains all necessary information for a properly executed certificate. 
Additional copies may be reproduced as needed.
* * * * *
    Signed: May 30, 1996.
Bradley A. Buckles,
Acting Director.

    Approved: June 10, 1996.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 96-17995 Filed 7-15-96; 8:45 am]
BILLING CODE 4810-31-P