Lease Payment Excise Tax Deferral

§ 4217. Leases(a) Lease considered as saleFor purposes of this chapter, the lease of an article (including any renewal or any extension of a lease or any subsequent lease of such article) by the manufacturer, producer, or importer shall be considered a sale of such article. (b) Limitation on taxIn the case of any lease described in subsection (a) of an article taxable under this chapter, if the tax under this chapter is based on the price for which such articles are sold, there shall be paid on each lease payment with respect to such article a percentage of such payment equal to the rate of tax in effect on the date of such payment, until the total of the tax payments under such lease and any prior lease to which this subsection applies equals the total tax. (c) Definition of total taxFor purposes of this section, the term “total tax” means—(1) except as provided in paragraph (2), the tax computed on the constructive sale price for such article which would be determined under section 4216(b) if such article were sold at retail on the date of the first lease to which subsection (b) applies; or (2) if the first lease to which subsection (b) applies is not the first lease of the article, the tax computed on the fair market value of such article on the date of the first lease to which subsection (b) applies. Any such computation of tax shall be made at the applicable rate specified in this chapter in effect on the date of the first lease to which subsection (b) applies. (d) Special rules(1) Lessor must also be engaged in sellingSubsection (b) shall not apply to any lease of an article unless at the time of making the lease, or any prior lease of such article to which subsection (b) applies, the person making the lease or prior lease was also engaged in the business of selling in arm’s length transactions the same type and model of article. (2) Sale before total tax becomes payableIf the taxpayer sells an article before the total tax has become payable, then the tax payable on such sale shall be whichever of the following is the smaller:(A) the difference between (i) the tax imposed on lease payments under leases of such article to which subsection (b) applies, and (ii) the total tax, or (B) a tax computed, at the rate in effect on the date of the sale, on the price for which the article is sold. For purposes of subparagraph (B), if the sale is at arm’s length, section 4216(b) shall not apply. (3) Sale after total tax has become payableIf the taxpayer sells an article after the total tax has become payable, no tax shall be imposed under this chapter on such sale. (e) Leases of automobiles subject to gas guzzler tax(1) In generalIn the case of the lease of an automobile the sale of which by the manufacturer would be taxable under section 4064, the foregoing provisions of this section shall not apply, but, for purposes of this chapter—(A) the first lease of such automobile by the manufacturer shall be considered to be a sale, and