amount of floor stocks credit or refund which may be claimed by the manufacturer under section 209 (b) of the Act may not exceed an amount equal to the amount of tax paid by the manufacturer on its sale of the automobile part or accessory. For example, X, a dealer, has on hand on January 1, 1966, as floor stocks inventory an automobile carburetor which had a manufacturer's price of $10 on which the tax under section 4061(b) of 8 percent or $.80 was paid. The amount of floor stocks credit or refund which may be claimed by the manufacturer with respect to such carburetor is the $.80 tax paid on the manufacturer's sale of the carburetor (108 of the tax included price of $10.80). For special provisions with respect to the determination of the tax paid by a manufacturer on an automobile part or accessory see paragraph (c) of this section. No interest is allowable with respect to any amount of tax credited or refunded under section 209 (b) of the Act. In applying the floor stocks credit or refund provisions, the time the manufacturer paid the tax with respect to the article held as floor stocks is not relevant. Thus, the period of limitations provided in section 6511 of the Code does not apply.

(3) Limitation. Except as provided in paragraph (c) of this section, no credit or refund is allowable under section 209(b) of the Act for an amount paid as tax which may be credited or refunded under any provisions of law other than section 209 (b) of the Act or which was allowable as a credit or refund under section 209 (b) with respect to an earlier inventory date. See the second and third sentences of paragraph (a) (3) of § 145.2-1 for an example illustrating a situation in which a credit or refund of tax in the amount of two percent may have been allowable under section 209(b) in respect of an earlier inventory date on an automobile radio receiving set held as a floor stock on January 1, 1966.

(4) Relationship between credits or refunds for floor stocks and credits or refunds for price readjustments. The amount which may be credited or refunded for floor stocks and for price readjustments on an automobile part or accessory may not in the aggregate exceed the tax paid in respect of such part or accessory. A credit or refund will be allowed with respect to a price readjustment of an automobile part or accessory

on which a floor stock credit or refund was allowed only if the amount of the floor stock credit or refund was computed by taking into account such price readjustment as a reduction thereto (see paragraph (c) of this section). The manufacturer shall keep readily available for inspection sufficient records to enable examining officers to ascertain the correctness of any claim for credit or refund for a price readjustment of an automobile part or accessory on which a floor stock credit or refund was claimed.

(5) Other provisions applicable. All provisions of law, including penalties, applicable in respect of the tax imposed by section 4061(b) shall, insofar as applicable and not inconsistent with section 209 (b) of the Act, apply in respect of the credits and refunds provided for in section 209 (b) of the Act to the same extent as if the credits and refunds constituted overpayments of the taxes. For provisions relating to the imposition of the tax, see §§ 48.4061(b)-1 48.4061 (b)-2 (Manufacturers and Retailers Excise Taxes) of this chapter. For provisions under which timely mailing is treated as timely filing, and for provisions applicable to the time for performance of acts when the last day falls on Saturday, Sunday, or a legal holiday, see §§ 301.7502-1 and 301.7503-1 (Regulations on Procedure and Administration), respectively, of this chapter.

and

(b) Definitions. For purposes of this section (1) Floor stocks. (i) Except as provided in subdivision (ii) of this subparagraph, the term "floor stocks" means any automobile part or accessory subject to the tax imposed by section 4061(b) which is sold by the manufacturer, held by a dealer on the first moment of January 1, 1966, not used, and intended for sale.

(ii) The term "floor stocks" does not include any part or accessory, which if sold by a manufacturer on or after January 1, 1966, would be subject to the tax under section 4061(b). The fact that the manufacturer, for purposes of its claim for floor stocks credit or refund, treats a part or accessory as being so subject to tax will not be determinative of the status of such part or accessory under section 4061(b) on or after January 1, 1966.

(iii) The term "floor stocks" includes an automobile part or accessory purchased tax-paid, not used, and held on

the first moment of January 1, 1966, for use in repairing, reconditioning, or rebuilding. However, such term does not include an automobile part or accessory which has already been used in a repairing, reconditioning, or rebuilding process.

(iv) Where a dealer's inventory on the first moment of January 1, 1966, of a particular part or accessory consists of both new parts or accessories and rebuilt (including reconditioned and repaired) parts or accessories and the new and rebuilt items cannot be distinguished, the manufacturer may treat as "floor stocks" that proportion of the dealer's inventory of such part or accessory which the manufacturer's sales of new such parts or accessories during the representative period bears to the manufacturer's total sales of such parts or accessories during the representative period.

(2) Dealer. The term "dealer" includes a wholesaler, jobber, distributor, or retailer.

(3) Held by a dealer. The principles set forth and illustrated in subdivisions (i), (iii), (iv), and (v) of paragraph (b) (4) of § 145.2-1 shall be applied in determining whether an automobile part or accessory was "held by a dealer".

(4) Tax paid. A tax is considered paid if it was paid or was offset by an allowable credit on the return on which it was reported.

(c) Methods of determining amount of tax paid on each automobile part or accessory (1) In general. For the purpose of the credits or refunds described in paragraph (a) of this section, the tax paid on each automobile part or accessory must be separately computed, except that the manufacturer may use(1) The procedures described in § 145.2-3,

(ii) The product line method described in subparagraph (2) of this paragraph, (iii) The manufacturer's tax rate method described in subparagraph (3) of this paragraph, or

(iv) Any combination of the above methods or any other method which the manufacturer can demonstrate is reasonable.

Prior approval of the Internal Revenue Service for the method of computation need not be obtained and should not be requested.

(2) Product line method. Where a manufacturer computes its tax on the

basis of product lines and its records are maintained by product lines, the manufacturer may determine the amount of tax paid on a particular automobile part or accessory by dividing the total tax paid for a representative period in respect of the product line which includes the part or accessory by the total number of parts or accessories in the product line sold tax-paid during the representative period (reduced by the number of parts or accessories in the product line which were returned to the manufacturer during the representative period). The resulting tax shall be rounded to the nearest tenth of one cent. In making the computation described in this subparagraph, the manufacturer may include the tax paid in respect of the truck parts and accessories in the product line in the total tax paid on the product line for the representative period. However, if the manufacturer so includes in its computation the tax paid on truck parts and accessories, it must also include the total number of truck parts and accessories in the product line which were sold tax-paid during the representative period in the total number of automobile parts and accessories in the product line which were sold during the representative period.

(3) Manufacturer's tax rate method(i) In general. Where a manufacturer has an established price list for all automobile parts and accessories sold by it, it may determine the amount of tax paid on a particular automobile part or accessory by multiplying (a) the price of such article on the established price list, by (b) the average rate of tax paid (hereinafter referred to as the "manufacturer's tax rate") by it based on the prices (on such established price list) of all parts and accessories sold by it taxpaid during a representative period. The manufacturer's tax rate is computec: by dividing the total tax paid in respect of all automobile parts and accessories sold during the representative period by the total of the prices, computed by multiplying the number of each item sold by the price for such item on one particular established price list (herein referred to in this section as "the established price list"), for all automobile parts and accessories sold tax-paid during the representative period (reduced

by the prices on the established price list of such articles returned to the manufacturer during the representative period). It is immaterial whether the established price list is a price list used at some time during the representative period, or at some later date, but only one such price list may be used and, once chosen by the manufacturer, it must be used both in computing the manufacturer's tax rate and the prices of the floor stocks to which such tax rate is to be applied. The manufacturer's tax rate shall be computed to the nearest thousandth of a percent. In making the computation described in this subdivision, the manufacturer may include the tax paid in respect of truck parts and accessories in the total tax paid during the representative period. However, if the manufacturer so includes in its computation the tax paid on truck parts and accessories, it must also include the total prices of truck parts and accessories which were sold tax-paid during the representative period in the total prices of automobile parts and accessories which were sold during the representative period.

(ii) Use of more than one "manufacturer's tax rate". Where a manufacturer sells more than one product line and its records are sufficient to permit the computation of a separate manufacturer's tax rate for one or more of such product lines, it may use a separate manufacturer's tax rate for each of such product lines.

(4) Definitions. For purposes of this paragraph-(i) Representative period. The term "representative period" has the meaning set forth in paragraph (f) of § 145.2-3.

(ii) Total tax paid. (a) Where a manufacturer computes the tax paid on a particular automobile part or accessory by the method set forth in subparagraph (3) (i) of this paragraph, the term "total tax paid" means the tax reported on the manufacturer's excise tax returns for the representative period, reduced by the amount of all credits claimed on those returns and further reduced by the amount of any refunds claimed and not disallowed in respect of the representative period.

(b) Where a manufacturer computes the tax paid on a particular automobile part or accessory by one of the methods set forth in subparagraph (2) or (3) (ii) of this paragraph, the term "total

tax paid" means the tax in respect of the product line which was reported on the manufacturer's excise tax returns for the representative period, reduced by the amount of all credits claimed in respect of the product line on those returns and further reduced by the amount of any refunds claimed in respect of the product line for the representative period and not disallowed.

(c) Where a second manufacturer sells articles manufactured by a first manufacturer

(i) The second manufacturer shall inIclude such articles in the computations described in subparagraphs (2) and (3) of this paragraph, and

(ii) The total tax described in (a) and (b) of this subdivision (ii) of the second manufacturer also includes the tax paid by the first manufacturer (determined as provided in paragraph (c) (1) of this section in respect of the first manufacturer's representative period) on such articles sold by the second manufacturer during its representative period, if the first manufacturer is willing to obtain a credit or refund of such tax to the extent it has been paid by the first manufacturer in respect of floor stocks held by dealers and agrees to the second manufacturer acting as its agent in receiving requests from dealers in the matter.

For the purpose of determining which of the parts and accessories of the first manufacturer were sold by the second manufacturer during the representative period, a first-in, first-out method may be used.

(d) Participation of dealers. On or before June 30, 1966, a dealer may submit to a manufacturer (at the manufacturer's option either directly or through another dealer in his distribution chain, provided the request is received by the manufacturer or its authorized agent on or before such date) a request with respect to a credit or refund allowable under section 209(b) of the Act for tax paid by such manufacturer with respect to automobile parts and accessories held by such dealer as floor stocks. No amount of credit or refund under section 209(b) of the Act may be claimed by a manufacturer with respect to articles held by a dealer as floor stocks unless

(1) The claim for such amount is based on a request submitted by the dealer to the claimant on or before June 20. 1966;

(2) Such amount is paid by the claimant to the dealer, or the dealer's written consent to allowance of the credit or refund has been received by the claimant, on or before August 10, 1966; and (3) The request by the dealer is supported by an inventory statement declaring it is made under penalties of perjury signed by the dealer or by the dealer's authorized representative setting forth the following information:

(i) The name and address of the dealer and of the applicable manufacturer (except that if unknown to the dealer the name and address of the applicable manufacturer may be inserted by any person in the chain of distribution);

(if

(ii) The identification number ary) of the article, such as a serial, part, stock, model, type, or class number, or some other suitable means of identification;

(iii) The quantity of articles held by the dealer as floor stocks on the inven

(v) A statement that no other request with respect to the attached inventory statement has been made; and

(vi) Such other information or computations as requested by the manufacturer.

Where a dealer addresses his request to the person whom, from markings on the article, the dealer presumes to be the manufacturer, the request may be treated as made to the actual manufacturer if the actual manufacturer accepts the dealer's request. Payment may be made directly to the dealer or to the dealer's authorized agent or representative by the claimant or by the claimant's authorized agent or representative. Where a claimant pays a dealer through the claimant's agent or representative the evidence must show that the dealer actually received the payment. Where a dealer authorizes the claimant to pay him through the dealer's agent or representative, evidence showing receipt of the payment by such agent or representative will be accepted as proof of actual payment to the dealer. Payment shall be made, at the manufacturer's option, in cash, by check, or by credit to the dealer's account as maintained by the claimant. The amount of the pay

ment which may be made by crediting such account may not exceed the undisputed debit balance due at the time the credit is made. However, payment may be made, at the dealer's option (with the concurrence of the manufacturer), in merchandise. The date on which any act described in this paragraph is performed by an agent or representative on behalf of a claimant or dealer shall be deemed to be the date on which the act is performed by the principal. For provisions relating to the record of dealer's inventories to be kept by the claimant, see paragraph (f) (2) of this section.

(e) Procedure for claiming credit or refund (1) In general. Each claim for credit or refund under this section shall be filed on or before August 10, 1966, in the manner and subject to the conditions stated in this section and in § 301.6402-2 of this chapter (Regulations on Procedure and Administration). Either credit or refund, or a combination thereof, may be claimed, but the amount which may be claimed as credit on a return shall not exceed the total tax liability shown on the return, reduced by the amount of any depositary receipts accompanying the return and by any amount of credit claimed on the return pursuant to any provision of law other than section 209 (b) of the Act. If the total amount which may be claimed exceeds the amount that may be claimed as credit on a return, the excess amount may be claimed on or before August 10, 1966, either as a credit on a subsequent return or as a refund. If credit is claimed the amount thereof shall be entered as a credit on a timelv-filed (before the expiration of extensions granted under § 145.1-1) return of tax.

(2) Supporting evidence to be submitted by the manufacturer. No credit or refund shall be allowed unless there is submitted in support of the claim for credit or refund, a statement, signed by the person making the claim, that describes in general terms the automobile parts and accessories covered by the claim, sets forth the method of computation of the amount claimed (including a description of any procedures used pursuant to paragraph (c) of this section), and states that

(i) The claimant paid to the district director the tax for which credit or refund is claimed;

(ii) The total amount claimed represents payments requested by dealers on or before June 30, 1966;

(iii) Before the claim is filed, the total amount claimed either was paid by the claimant to such dealers, or the claimant received the written consent of the dealers to the allowance of the amount claimed;

(iv) The claimant has in his possession, and available for inspection by internal revenue officers, the evidence with respect to inventories required by paragraph (f) of this section and any written consents referred to in subdivision (iii) of this subparagraph; and

(v) No other claim for credit or refund under section 209 (b) of the Act has been, or will be made by the claimant with respect to any amount covered by the claim.

In addition, the statement shall show the amount and date of filing of each previous or concurrent claim for credit or refund under section 209 (b) of the Act with respect to automobile parts or accessories and whether or not any future claims are expected to be filed.

(f) Evidence to be retained in the manufacturer's records-(1) In general. Every person filing a claim for credit or refund pursuant to this section shall support the claim by keeping as part of his records the evidence required by this paragraph.

(2) Inventories. Every person filing a claim under section 209(b) of the Act shall retain the dealer's inventory statements required by paragraph (d) of this section to be submitted to the manufacturer (to the extent that the automobile parts and accessories are covered by the claim). In addition, the claimant shall retain records in respect of the articles held by each dealer, showing (i) the name and address of the dealer, (ii) the quantities of each automobile part or accessory held by the dealer as floor stocks by taxable category (for example, by model or type number), (iii) the amount of tax considered as paid with respect to each article held by the dealer (see paragraph (c) of this section for rules relating to determination of tax paid by the manufacturer), (iv) the total amount of reimbursement due the dealer, (v) the date on which the claimant received from the dealer a request as set forth in paragraph (d) of this section (unless payment to the dealer

is made prior to June 30, 1966), and (vi) the date and amount of each payment to a dealer, or the date of receipt by the claimant from the dealer of written consent, as set forth in paragraph (d) of this section. In addition, the claimant shall retain any written consents received from dealers as a part of his records.

(3) Sample written consent. No particular form is prescribed or required for the written consent of the dealer. However, the following is an example of an acceptable consent statement by a dealer:

(g) Special rules where the presumed manufacturer is the agent of the actual manufacturer. For purposes of this section, if a manufacturer sells automobile parts and accessories tax-paid to a second manufacturer for resale by the second manufacturer under its own brand name or other identification, the second manufacturer may perform any acts and keep any records which are a prerequisite to the first manufacturer filing a claim for floor stocks credit or refund with respect to such automobile parts and accessories. If such a procedure is followed, the claim filed by the first manu facturer shall include a statement indicating the name and address of the second manufacturer and the amount of its claim which relates to automobile parts and accessories sold to such second manufacturer. If by reason of the provisions of paragraph (c) (4) (ii) (c), tax paid by the first manufacturer is included in the