August 25, 1993
Luxury Tax Repealed for
Auto Equipment for Disabled Persons
WASHINGTON - The new tax law has completely repealed the luxury
tax on equipment installed to help disabled persons enter, exit or
operate a vehicle. The law also indexes for inflation the $30,000
cost threshold at which the luxury tax on vehicles begins, but the
indexing formulas does not result in any change for 1993.
The repeal of the tax covers equipment on passenger vehicles
sold since the beginning of 1991, when the tax first went into
effect. The person who filed the excise tax return reporting the
tax should claim a refund from the IRS. This will usually be the
retailer who installed the part or accessory. The customer--the
owner, lessee or operator of the vehicle--should contact the
retailer for reimbursement of the tax paid.
Retailers who paid luxury tax on equipment installed for
disabled persons must file Form 843, Claim for Refund and Request
for Abatement, to get a refund of this tax.
They must certify that they have refunded the tax to the
consumer, that they have a signed consent from the consumer, or
that they did not include the tax in the selling price nor collect
it from the consumer.
Any luxury taxes collected that have not yet been deposited
with the IRS must be refunded to customers who paid the tax.
Although taxpayers must usually file refund claims within three
years after the due date of the original returns, or two years
after the taxes are paid, whichever is later, refund claims for
luxury taxes on equipment for disabled persons bought in the first
half of 1991 may be filed until August 10, 1994.
IRS Notice 93-44 gives specific technical guidance on claiming
refunds or credits repealed luxury taxes. It will be published in
Internal Revenue Bulletin 1993-29, dated September 20, 1993.
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