(g) Cross references. For provisions relating to penalties for failure to make deposit of taxes, see section 6656.

[T.D. 8442, 57 FR 48177, Oct. 22, 1992, as amended by T.D. 8609, 60 FR 40081, Aug. 7, 1995; T.D. 8685, 61 FR 58005, Nov. 12, 1996; T.D. 8723, 62 FR 37494, July 14, 1997]

§40.6302(c)-1T Use of Government depositaries (temporary).

(a)–(c)(2)(iii) [Reserved]

(iv) Modification for new or reinstated taxes—(A) Applicability. The safe harbor rule of § 40.6302(c)-1(c)(2)(i) is modified for any calendar quarter in which a person's liability for a class of tax includes liability for any new or reinstated tax. For this purpose, a new or reinstated tax is—

(1) Any tax (including an alternative method tax) that was not in effect at all times during the look-back quarter; and

(2) Any alternative method tax that was not in effect at all times during the month preceding the look-back quarter.

(B) Modification. The safe harbor rule of § 40.6302(c)−1(c)(2)(i) does not apply to a class of tax unless the deposit of taxes in that class for each semimonthly period in the calendar quarter is not less than the greater of

(1) % of the net tax liability reported for the class of tax for the look-back quarter; or

(2) The sum of—

(i) 95 percent of the net tax liability incurred with respect to new or reinstated taxes during the semimonthly period; and

(ii) % of the net tax liability reported for all other taxes in the class for the look-back quarter.

(C) Effective date. This paragraph (c)(2)(iv) applies to tax liabilities for new or reinstated taxes incurred after February 28, 1997, except that paragraph (c)(2)(iv)(A)(2) of this section applies only for calendar quarters beginning after December 31, 1997.

(3)-(f)(4) [Reserved]

(5) Taxes excluded; floor stocks taxes. No deposit is required in the case of any floor stocks tax described in § 40.01T(g), beginning April 1, 1991.

[T.D. 8740, 62 FR 67569, Dec. 29, 1997]

§40.6302(c)-2 Special rules for use of Government depositaries under section 4681.

(a) Overview. This section sets forth special rules for deposits of tax imposed by section 4681 (relating to ozone-depleting chemicals), including rules relating to the time to deposit and safe harbors. The general rules relating to deposits are set forth in § 40.6302(c)-1 and apply unless inconsistent with the rules set forth below.

(b) In general-(1) Time to deposit. In the case of tax imposed by section 4681 (section 4681 tax), the deposit of tax for a semimonthly period must be made by the last day of the second following semimonthly period (the "30-day rule"). Thus, under the 30-day rule generally, the deposit of tax for the first semimonthly period in a month is due by the 15th day of the following month and the deposit of tax for the second semimonthly period in a month is due by the end of the following month.

(2) Amount of deposit; safe harbor rule based on look-back quarter liability—(i) In general. Except as provided in paragraph (b)(2)(ii) of this section, any person that made a return of section 4681 tax for the second preceding calendar quarter (the "look-back quarter") is considered to have complied with the requirement of this part 40 for deposit of that tax for the current calendar quarter if—

(A) The deposit of that tax for each semimonthly period in the current calendar quarter is not less than % of the net tax liability under section 4681 reported for the look-back quarter;

(B) Each deposit is made on time; and (C) The amount of any underpayment of that tax for the current calendar quarter is paid by the due date of the return.

(ii) Modification for tax rate increases(A) Applicability. The safe harbor rule of paragraph (b)(2)(i) of this section is modified for the first and second calendar quarters beginning on or after the effective date of―

(1) An increase in the base tax amount under section 4681(b); or

(2) A change in the tax treatment of ozone-depleting chemicals that are described in section 4682(g).

(B) Modification. The safe harbor rule in paragraph (b)(2)(i) of this section

does not apply for those calendar quarters unless the deposit of section 4681 taxes for each semimonthly period in the calendar quarter is not less than 1% of the tax liability the person would have had under section 4681 for the look-back quarter if the increased base tax amount or the change in treatment had been in effect for that look-back quarter.

(3) Amount of deposit; safe harbor rule based on current liability—(i) In general. A person is considered to have complied with the requirement of this part 40 for deposit of section 4681 tax for a calendar quarter if—

(A) The deposit of that tax for each semimonthly period in the calendar quarter is not less than 95 percent of the net tax liability incurred under section 4681 during the semimonthly period;

(B) Each deposit is made on time; and (C) The amount of any underpayment of that tax for the calendar quarter is paid by the due date of the return.

(ii) Effective date. This paragraph (b)(3) is effective for deposits that relate to calendar quarters beginning after December 31, 1992.

(c) Special rules for September—(1) Deposits required. In the case of deposits of 30-day rule taxes for the first semimonthly period in September, separate deposits are required for the period September 1st-11th and the period September 12th-15th.

(2) Amount of deposit. The deposits of 30-day rule taxes for the period September 1st-11th and the period September 12th-15th must be not less than the amount of net tax liability for 30day rule taxes incurred during the respective periods. The net tax liability incurred during these periods may be computed by—

(i) Determining the amount of net tax liability incurred during the first semimonthly period in September (or, if semimonthly liability is computed by dividing monthly liability by two, the amount reasonably expected to be incurred);

(ii) Treating 115 of that amount as the net tax liability incurred during the period September 1st-11th; and

(iii) Treating the remainder of the amount determined under paragraph (c)(2)(i) of this section (adjusted, if that

amount is based on reasonable expectations, to reflect net tax liability actually incurred through the end of September) as the net tax liability incurred during the period September 12th-15th.

(3) Time to deposit―(i) In general. The deposit required for the period beginning September 1st and the deposit for the second semimonthly period in August must be made by September 29. The deposit required for the period ending September 15th must be made at the time prescribed in paragraph (b)(1)(i) of this section for making deposits for the first semimonthly period in September.

(ii) Due date on Saturday or Sunday. A deposit that would otherwise be due on September 29 must be made by September 28 if September 29 is a Saturday and by September 30 if September 29 is a Sunday.

(4) Safe harbor rule based on look-back quarter liability. The safe harbor rule of paragraph (b)(2)(i) of this section does not apply for the third calendar quarter unless

(i) The deposit of 30-day rule taxes for the period September 1st-11th is not less than 10 of the net tax liability reported for 30-day rule taxes for the look-back quarter; and

(ii) The total deposit of 30-day rule taxes for the first semimonthly period in September is not less than 1% of the net tax liability reported for 30-day rule taxes for the look-back quarter.

(5) Safe harbor rule based on current liability. The safe harbor rule of paragraph (b)(3) of this section does not apply for the third calendar quarter unless

(i) The deposit of 30-day rule taxes for the period September 1st-11th is not less than 69.67 percent of the net tax liability for 30-day rule taxes for the first semimonthly period in September; and

(ii) The total deposit of 30-day rule taxes for the first semimonthly period in September is not less than 95 percent of the net tax liability for 30-day rule taxes for that semimonthly period.

(6) Persons not required to use electronic funds transfer. In the case of a person that is not required to deposit excise taxes by electronic funds transfer (a non-EFT depositor), the rules of

this paragraph (c) apply with the following modifications:

(i) The periods for which separate deposits must be made are September 1st10th and September 11th-15th.

(ii) The deposit required for the period beginning September 1st and the deposit required for the second semimonthly period in August must be made by September 28. A deposit that would otherwise be due on September 28 must be made by September 27 if September 28 is a Saturday and by September 29 if September 28 is a Sunday. (iii) The generally applicable fractions and percentage are modified to reflect the different deposit periods in accordance with the following table:

Generally applicable fractions and percentage

11/15

11/90

69.67 percent

Modifications for nonEFT depositors

10/15.

10/90.

63.33 percent.

(7) Effective date. This paragraph (c) is effective August 1, 1995.

[T.D. 8442, 57 FR 48177, Oct. 22, 1992, as amended by T.D. 8685, 61 FR 58005, Nov. 12, 1996]

§ 40.6302(c)-2T Special rule for use of Government depositaries under section 4681 (temporary). (a)–(b)(2)(ii) [Reserved]

(iii) Modification for new chemicals— (A) Applicability. The safe harbor rule of §40.6302(c)-2(b)(2)(i) is modified for any calendar quarter in which a person's liability for section 4681 tax inIcludes liability with respect to any new chemical. For this purpose, a new chemical is any chemical that was not subject to tax at all times during the look-back quarter.

(B) Modification. The safe harbor rule of §40.6302(c)-2(b)(2)(i) does not apply unless the deposit of section 4681 taxes for each semimonthly period in the calendar quarter is not less than the greater of

(1) % of the net tax liability reported under section 4681 for the look-back quarter; or

(2) The sum of—

(i) 95 percent of the net tax liability incurred under section 4681 with respect to the new chemical during the semimonthly period; and

(ii) % of the net tax liability reported under section 4681 with respect to all other chemicals for the look-back quarter.

(C) Effective date. This paragraph (b)(2)(iii) applies to tax liabilities for new chemicals incurred after February 28, 1997.

[T.D. 8740, 62 FR 67569, Dec. 29, 1997]

§ 40.6302(c)-3 Special rules for use of Government depositaries under chapter 33.

(a) Overview. This section sets forth an alternative method for computing the amount of deposits of taxes imposed by chapter 33, and provides rules relating to the time for making a deposit and the amount of tax to be reported on the return of tax for each quarter by persons using the alternative method. The safe harbor rules for computing deposits of tax using the alternative method and the general rules relating to deposits are set forth in § 40.6302(c)-1 and apply unless inconsistent with the rules set forth below.

(b) Alternative method for computing deposits (1) In general-(i) Alternative method. Any person required to collect and pay over any tax imposed by chapter 33 may compute the amount of that tax to be deposited on the basis of amounts considered as collected (the "alternative method") instead of on the basis of actual collections of tax.

(ii) Using more than one method to compute deposits. A person may compute deposits of tax imposed by one or more sections of chapter 33 using the alternative method provided by this section and compute deposits of taxes imposed by other sections of chapter 33 on the basis of amounts actually collected using the 9-day rule of §40.6302(c)— 1(b)(6). For purposes of this paragraph (b)(1)(ii), the taxes imposed by section 4261(a) and (b) are treated as taxes imposed by the same section.

(2) Applicability—(i) In general. A person may use the alternative method with respect to a tax only if the per

son

(A) Separately accounts for the tax in accordance with paragraph (b)(2)(ii) of this section; and

(B) Makes a return of the tax on the basis of the amount of the tax that is considered as collected.

(ii) Separate account. The account required under paragraph (b)(2)(i)(A) of this section (the "separate account") must reflect for each month

(A) All items of the tax that are included in amounts billed or tickets sold to customers during the month; and

(B) Items of adjustment (including bad debts and errors) relating to the tax for prior months within the period of limitations on credits or refunds.

(iii) Change of method. The method of computing deposits of tax imposed by a section of chapter 33 (as described in paragraph (b)(1)(ii) of this section) may be changed only at the beginning of a calendar quarter. Before a person changes the method used to compute the amount of tax to be deposited and reported for a calendar quarter, the person must notify the Commissioner so that proper adjustments may be made in order to properly reflect that person's collections of excise tax.

(3) Period during which tax is considered as collected. For purposes of this section, the tax included in amounts billed or tickets sold during a semimonthly period (as defined in §40.01(c)) is considered as collected during the first seven days of the second following semimonthly period. Thus, the tax included in amounts billed or tickets sold during the first semimonthly period of a calendar month is considered as collected during the period of the 1st day through the 7th day of the following month; the tax included in amounts billed or tickets sold during the second semimonthly period of a calendar month is considered as collected during the period of the 6th day through the 22nd day of the following month.

(4) When amounts are billed. For purposes of this section, an amount is billed on the earlier of the date the amount is received or the date a bill for the amount is rendered.

(c) Time to deposit. Under the alternative method, the deposit of tax for any semimonthly period must be made by the third banking day after the seventh day of that semimonthly period. Thus, for example, the deposit for the semimonthly period beginning on January 1, 1993 (relating to amounts billed between December 1st and December

15, 1992) is due by January 12, 1993, three banking days after January 7, the seventh day of the semimonthly period.

(d) Amount of deposit. Under the alternative method, the deposit of tax for any semimonthly period must be not less than the net amount of tax that is considered as collected during that semimonthly period. The net amount of tax that is considered as collected during the semimonthly period must be either the net amount of tax reflected in the separate account for the corresponding semimonthly period of the preceding month or one-half the net amount of tax reflected in the separate account for the preceding month.

(e) Reporting of tax. If a tax is deposited under the alternative method for a calendar quarter, the return of tax for the the quarter must report net amount of the tax that is considered as collected during the quarter and not the amount of the tax that is actually collected during the quarter. The amount to be reported for each month is the net amount of tax reflected in the separate account for the preceding month. For example, amounts billed in December, January, and February are considered as collected during January, February, and March, and are reported as the collections of tax for January, February, and March (the first calendar quarter). Thus, the net amount of tax reflected in the separate accounts for December, January, and February is the amount reported as collections for the first quarter.

(f) Special rules for September-(1) Deposits required. In the case of alternative method taxes charged (that is, included in amounts billed or tickets sold) during the first semimonthly period in September, separate deposits are required for the taxes charged during the period September 1st-11th and the period September 12th-15th.

(2) Time to deposit—(i) In general. The deposit required for alternative method taxes charged during the period beginning September 1st must be made by September 29. The deposit required for alternative method taxes charged during the period ending September 15th must be made at the time prescribed in

paragraph (c) of this section for making deposits for the first semimonthly period in October.

(ii) Due date on Saturday or Sunday. A deposit that would otherwise be due on September 29 must be made by September 28 if September 29 is a Saturday and by September 30 if September 29 is a Sunday.

(3) Amount of deposit. The deposits of alternative method taxes required for the period September 1st-11th and the period September 12th-15th must be not less than the amount of alternative method taxes charged during the respective periods. The amount of alternative method taxes charged during these periods may be computed by—

(i) Determining the net amount of alternative method taxes reflected in the separate account for the first semimonthly period in September (or onehalf of the net amount of alternative method taxes reasonably expected to be reflected in the separate account for the month of September);

(ii) Treating 115 of that amount as the amount of taxes charged during the period September 1st-11th; and

(iii) Treating the remainder of the amount determined under paragraph (f)(3)(i) of this section (adjusted, if that amount is based on reasonable expectations, to reflect actual taxes charged through the end of September) as the amount charged during the period September 12th-15th.

(4) Safe harbor rule based on look-back quarter liability. The safe harbor rule of § 40.6302(c)-1(c)(2)(i) does not apply for the fourth calendar quarter unless

(i) The deposit for alternative method taxes charged during the period September 1st-11th is not less than 110 of the net tax liability reported for alternative method taxes for the look-back quarter; and

(ii) The total deposit for alternative method taxes charged during the first semimonthly period in September is not less than 1% of the net tax liability reported for alternative method taxes for the look-back quarter.

(5) Safe harbor rule based on current liability. The safe harbor rule of § 40.6302(c)-1(c)(3)(i) does not apply for the fourth calendar quarter unless

(i) The deposit for alternative method taxes charged during the period Sep

tember 1st-11th is not less than 69.67 percent of the alternative method taxes charged during the first semimonthly period in September; and

(ii) The total deposit for alternative method taxes charged during the first semimonthly period in September is not less than 95 percent of the alternative method taxes charged during that semimonthly period.

(6) Persons not required to use electronic funds transfer. In the case of a person that is not required to deposit excise taxes by electronic funds transfer (a non-EFT depositor), the rules of this paragraph (f) apply with the following modifications:

(i) The taxes for which separate deposits must be made are the taxes charged during the periods September 1st-10th and September 11th-15th.

(ii) The deposit required for taxes charged during the period beginning September 1st must be made by September 28. A deposit that would otherwise be due on September 28 must be made by September 27 if September 28 is a Saturday and by September 29 if September 28 is a Sunday.

(iii) The generally applicable fractions and percentage are modified to reflect the different deposit periods in accordance with the following table:

Generally applicable fractions and percentage

11/15 11/90 69.67 percent

Modifications for nonEFT depositors

10/15. 10/90. 63.33 percent.

(7) Effective date. This paragraph (f) is effective August 1, 1995, for all taxes except those imposed by section 4261 or 4271. For taxes imposed by section 4261 or 4271, this paragraph (f) applies beginning January 1, 1997.

(g) Transitional rule for first calendar quarter of 1993-(1) Applicability. This paragraph (g) applies to a chapter 33 tax if the person

(i) Erroneously applied the "considered collected" method provided under § 49.6302(c)-1(a)(1) of this chapter in the fourth calendar quarter of 1992 by calculating deposits of that tax on the basis of amounts billed or tickets sold during the quarter rather than on the basis of taxes considered as collected during the quarter; and