§ 4001. Imposition of tax
(a)
Imposition of tax
(1)
In general
There is hereby imposed on the 1st retail sale of any passenger vehicle a tax equal to 10 percent of the price for which so sold to the extent such price exceeds the applicable amount.
(2)
Applicable amount
(B)
Qualified clean-fuel vehicle property
In the case of a passenger vehicle which is propelled by a fuel which is not a clean-burning fuel and to which is installed qualified clean-fuel vehicle property (as defined in section
179A
(c)(1)(A)) for purposes of permitting such vehicle to be propelled by a clean-burning fuel, the applicable amount is equal to the sum of—
(ii)
the increase in the price for which the passenger vehicle was sold (within the meaning of section
4002) due to the installation of such property.
(b)
Passenger vehicle
(c)
Exceptions for taxicabs, etc.
The tax imposed by this section shall not apply to the sale of any passenger vehicle for use by the purchaser exclusively in the active conduct of a trade or business of transporting persons or property for compensation or hire.
(d)
Exemption for law enforcement uses, etc.
No tax shall be imposed by this section on the sale of any passenger vehicle—
(e)
Inflation adjustment
(f)
Phasedown
For sales occurring in calendar years after 1995 and before 2003, subsection (a)(1) and section
4003
(a) shall be applied by substituting for “10 percent”, each place it appears, the percentage determined in accordance with the following table:
If the calendar year is:
The percentage is:
1996 9 percent
1997 8 percent
1998 7 percent
1999 6 percent
2000 5 percent
2001 4 percent
2002 3 percent .
(g)
Termination
The taxes imposed by this section and section
4003 shall not apply to any sale, use, or installation after December 31, 2002.