(a) Prior to January 1, 1988, the special (occupational) tax rates were as follows: ------------------------------------------------------------------------
Per year or
fraction
thereof------------------------------------------------------------------------Class 1--Importer of firearms.............................. $500Class 2--Manufacturer of firearms.......................... 500Class 3--Dealer in firearms................................ 200Class 4--Importer only of weapons classified as ``any other 25
weapon''..................................................Class 5--Manufacturer only of weapons classified as ``any 25
other weapon''............................................Class 6--Dealer only in weapons classified as ``any other 10
weapon''..................................................------------------------------------------------------------------------
(b) Except as provided in Sec. 479.32a, the special (occupational) tax rates effective January 1, 1988, are as follows: ------------------------------------------------------------------------
Per year or
fraction
thereof------------------------------------------------------------------------Class 1--Importer of firearms (including an importer only $1,000
of weapons classified as ``any other weapon'')............Class 2--Manufacturer of firearms (including a manufacturer 1,000
only of weapons classified as ``any other weapon'').......Class 3--Dealer in firearms (including a dealer only of 500
weapons classified as ``any other weapon'')...............------------------------------------------------------------------------
(c) A taxpayer who was engaged in a business on January 1, 1988, for which a special (occupational) tax was paid for a taxable period which began before January 1, 1988, and included that date, shall pay an increased special tax for the period January 1, 1988, through June 30, 1988. The increased tax shall not exceed one-half the excess (if any) of (1) the rate of special tax in effect on January 1, 1988, over (2) the rate of such tax in effect on December 31, 1987. The increased special tax shall be paid on or before April 1, 1988. [T.D. ATF-271, 53 FR 17550, May 17, 1988] Sec. 479.32a Reduced rate of tax for small importers and manufacturers.
(a) General. Effective January 1, 1988, 26 U.S.C. 5801(b) provides for a reduced rate of special tax with respect to any importer or manufacturer whose gross receipts (for the most recent taxable year ending before the first day of the taxable period to which the special tax imposed by Sec. 479.32 relates) are less than $500,000. The rate of tax for such an importer or manufacturer is $500 per year or fraction thereof. The ``taxable year'' to be used for determining gross receipts is the taxpayer's income tax year. All gross receipts of the taxpayer shall be included, not just the gross receipts of the business subject to special tax. Proprietors of new businesses that have not yet begun a taxable year, as well as proprietors of existing businesses that have not yet ended a taxable year, who commence a new activity subject to special tax, quality for the reduced special (occupational) tax rate, unless the business is a member of a ``controlled group''; in that case, the rules of paragraph (b) of this section shall apply.
(b) Controlled group. All persons treated as one taxpayer under 26 U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of determining gross receipts under paragraph (a) of this section. ``Controlled group'' means a controlled group of corporations, as defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except that the words ``at least 80 percent'' shall be replaced by the words ``more than 50 percent'' in each place they appear in subsection (a) of 26 U.S.C. 1563, as well as in the implementing regulations. Also, the rules for a ``controlled group of corporations'' apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of this section.
(c) Short taxable year. Gross receipts for any taxable year of less than 12 months shall be annualized by multiplying the gross receipts for the short period by 12 and dividing the result by the number of months in the short period, as required by 26 U.S.C. 448(c)(3).
(d) Returns and allowances. Gross receipts for any taxable year shall be reduced by returns and allowances made during that year under 26 U.S.C. 448(c)(3). (26 U.S.C. 448, 5061, 5801) [T.D. ATF-271, 53 FR 17550, May 17, 1988]