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Treasury Regulations · 26 CFR

§ 48.4216(b)-1. Constructive sale price; scope and application.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 4216(b)

Cite as 26 CFR § 48.4216(b)-1

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
April 23, 1979 by T.D. 7613
Issued under
26 U.S.C. § 4216(b)
Length
459 words · about 2 min to read
Defines
1 term
Cross-references
cites 2 Code sections and 1 regulation; cited by 0
(a) In general. Section 4216(b) pertains to those taxes imposed under Chapter 32 that are based on the price for which an article is sold, and contains the provisions for constructing a tax base other than the actual sale price of the article, under certain defined conditions.
(b) Specific applications.
(1) Section 4216(b)(1) applies to:
(i) Arm's-length sales at retail or on consignment, other than those sales at retail and to retailers to which section 4216(b)(2) and § 48.4216(b)-3 apply; and
(ii) Sales otherwise than at arm's length, and at less than fair market price.
(2) Section 4216(b)(2) applies generally to arm's-length sales of an article at retail or to retailers, or both, where the manufacturer also sells the same article to wholesale distributors.
(3) Section 4216(b)(3) provides a formula for determining a constructive sale price for sales of taxable articles between members of an affiliated group of corporations (as “affiliated group” is defined in section 1504(a)) in those instances where the purchasing corporation regularly resells to retailers but does not regularly resell to wholesale distributors, and except for situations where section 4216(b) (4) or (5) applies.
(4) Section 4216(b)(4) provides a special method for computing a constructive sale price for sales of taxable articles between affiliated corporations where the purchasing corporation sells only to retailers, and the normal method of selling within the industry is for manufacturers to sell to wholesale distributors.
(5) Section 4216(b)(5) provides a special method for computing a constructive sale price for sales of articles subject to a tax imposed by section 4061(a) (trucks, buses, tractors, etc.) between affiliated corporations, where the purchasing corporation regularly sells such articles in arm's-length transactions to independent retailers.
(c) Definitions. For purposes of section 4216(b) and the regulations thereunder and unless otherwise indicated:
(1) Sale at retail. A “sale at retail,” or a “retail sale”, is a sale of an article to a purchaser who intends to use or lease the article rather than resell it. The fact that articles are sold in wholesale lots, or at wholesale prices, will not change the character of such sales as “sales at retail” if the purchaser is not engaged in the business of reselling such articles, and acquires them for the purpose of using them rather than reselling them.
(2) Retail dealers. A “retail dealer”, or “retailer”, is a person engaged in the business of selling articles at retail.
(3) Wholesale distributor. The term “wholesale distributor” means a person engaged in the business of selling articles to persons engaged in the business of reselling such articles.

[T.D. 7613, 44 FR 23824, Apr. 23, 1979]

Terms defined here

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Other regulations under § 4216

Cross-references

Computed from the citations in the text of 26 CFR.

Code sections it cites

Regulations it cites

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Issued by T.D. 7613 (44 FR 23824)

Where it sits in 26 CFR

  1. Subchapter D Miscellaneous excise taxes
  2. Part 48 Manufacturers and retailers excise taxes
  3. Subpart M Special Provisions Applicable to Manufacturers Taxes

Nearby sections