72 S T A T. ]
PUBLIC LAW 8 5 - 8 5 9 - S E P T. 2, 1958
(b) CLERICAL AMENDMENT.—The table of sections for part I of subchapter E of chapter 32 is amended by striking out "Sec. 4192. Exemption for retail sales cash register." and inserting in lieu thereof "Sec. 4192. Exemptions." SEC. 115. CONSTRUCTIVE SALE PRICE FOR MANUFACTURERS EXCISE TAXES. Section 4216(b) (constructive sale price) is amended to read as follows: " (b) CONSTRUCTIVE SALE PRICE.— " (1) IN GENERAL.—If an article is—
" (A) sold at retail, " (B) sold on consignment, or " (C) sold (otherwise than through an arm's length transaction) at less than the fair market price, the tax under this chapter shall (if based on the price for which the article is sold) be computed on the price for which such articles are sold, in the ordinary course of trade, by manufacturers or producers thereof, as determined by the Secretary or his delegate. I n the case of an article sold at retail, the computation under the preceding sentence shall be on \j'hichever of the following prices is the lower: (i) the price for which such article is sold, or (ii) the highest price for which such articles are sold to wholesale (iistributors, in the ordinary course of trade, by manufacturers or producers thereof, as determined by the Secretary or his delegate. This paragraph shall not apply if paragraph (2) applies. "(2) SPECIAL RULE.—If an article is sold at retail, to a retailer, or to a special dealer (as defined in paragraph (3)), and if— " (A) the manufacturer, producer, or importer of such article regularly sells such articles at retail, to retailers, or to special dealers, as the case may be, " (B) the manufacturer, producer, or importer of such article regularly sells such articles to one or more wholesale distributors (other than special dealers) in arm's length transactions and he establishes that his prices in such cases are determined without regard to any tax benefit under this paragraph, " (C) the normal method of sales for such articles within the industry is not to sell such articles at retail or to retailers, or combinations thereof, and " (D) the transaction is an arm's length transaction, the tax under this chapter shall (if based on the price for which the article is sold) be computed on whichever of the following prices is the lower: (i) the price for which such article is sold, or (ii) the highest price for which such articles are sold by such manufacturer, producer, or importer to wholesale distributors (other than special dealers). "(3) SPECIAL DEALER.—For purposes of paragraph (2), the term 'special dealer' means a distributor of articles taxable under section 4121 who does not maintain a sales force to resell the article whose constructive price is established under paragraph (2) but relies on salesmen of the manufacturer, producer, or importer of the article for resale of the article to retailers." 98395-59-PT. 1-81
1279
26 USC 42 le.
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