Rev. Proc. 73-21

Section 1. Purpose.

The purpose of this Revenue Procedure is to provide district offices and persons affected by the Commissioner's revocation of Forms 637, effective December 31, 1973, with instructions and procedures for reregistering on Form 637, Registration for Tax-Free Transactions Under Chapter 32 of the Internal Revenue Code.

Sec. 2. Background.

01. The revocation of all Certificates of Registry, issued prior to January 23, 1970, was announced by the Commissioner of Internal Revenue in the Federal Register on June 11, 1973, and in Announcement 73-68, 1973-26 I.R.B. 20, dated June 25, 1973, and will become effective December 31, 1973.

02. The revocation is necessary for several reasons. For example, examinations of certain manufacturer's excise tax returns disclosed that sales were made on a tax-free basis by vendors who were improperly registered and did not qualify for registration. Also, pre-numbered registration forms were being used by vendors and vendees without validation by the District Director. Further, legislative changes repealing various taxes on many products, for which Forms 637 were originally issued, have made the files obsolete.

03. This action was taken to remove from the district office files ineligible registrants and simultaneously have eligible vendors and vendees reregister under procedures in effect since January 23, 1970. These procedures require the District Director to issue a validated registration form, bearing a coded number. A person whose registration is revoked will be required to reregister in order to sell or purchase tax-free under an exemption provision to which section 4222 of the Code applies. A Form 637 will be used for the reregistration, and should be filed as soon as possible to prevent any interruption in making tax-free sales or purchases.

04. Persons who have registered on or after January 23, 1970 are excluded from the blanket revocations.

Sec. 3. Who May Apply for Registration.

01. Any person who qualifies in one of the categories mentioned below may register:

1. Manufacturer of articles.

2. Vendee purchasing articles (other than tires or inner tubes) for use by him in further manufacture or for resale by him to a vendee who will so use the articles.

3. Vendee purchasing tires or inner tubes for use by such vendee for sale on or in connection with the sale of another article manufactured by him and such other article (taxable or nontaxable) is to be sold by him for any of the tax-free purposes indicated in Section 4221 except for use or for resale for use in further manufacture.

4. Vendee with a place of business in the United States purchasing articles for export or for resale to a second purchaser for export.

5. Vendee purchasing articles for use as supplies for vessels or aircraft.

6. Nonprofit educational organization.

7. Vendee purchasing bicycle tires or tubes for such tires for use in the manufacture by him of new bicycles.

8. Vendee purchasing gasoline, for nonfuel purposes, as a material in the manufacture of another article to be manufactured by him.

9. Vendee purchasing buses for use exclusively by him in transporting students and employees of schools operated by State or local governments or by non-profit educational organizations.

10. Producer of gasoline (including a wholesale distributor) purchasing gasoline for resale; or manufacturer or producer of lubricating oil purchasing lubricating oil for resale to a manufacturer or producer of lubricating oil.

11. State or local government. 12. Vendee purchasing container for use by him as a trash container, and such container is not designed for the transportation of freight other than trash.

13. Vendee purchasing buses which are to be used by him predominantly in urban mass transit.

02. Under prescribed regulations, the following purchasers may, in lieu of registering as provided in this procedure, make tax-free purchases through the use of properly executed exemption certificates:

1. States or local governments.

2. First or second purchasers for export who are located in a foreign country or a possession of the United States.

3. The United States Government.

4. Purchasers of supplies for vessels or aircraft.

03. Any person who is eligible to sell or purchase articles tax-free and who has not registered, or whose registration has been revoked as a result of the Commissioner's Announcement of June 25, 1973, may make such tax-free sales or purchases in accordance with the following procedure. Such person shall, prior to making a tax-free sale or purchase, file Form 637, in duplicate, executed in accordance with the instructions contained in such form, with the District Director for the district in which is located his principal place of business, or if he has no principal place of business in the United States with the Director of International Operations, Internal Revenue Service, Washington, D.C., 20225. Copies of Form 637 may be obtained from any District Director's Office. The person who receives a Form 637 which has been validated by a District Director shall be considered to be registered for purposes of selling or purchasing tax-free. This section does not apply where, as indicated in section 3.02, tax-free purchases are permitted with properly executed exemption certificates.

Sec. 4. Rejection of Application for Registration.

01. In case the applicant for registry does not agree with the rejection of his application, he may request a District conference. This is the only appeal procedure available to an applicant. A District conference may be arranged by submitting a written request to the District Director.

02. At the conclusion of the District conference, the taxpayer must be formally notified if his application is rejected.

03. If the conferee decides that an application for registration should be accepted, the procedures in Section 3 above will be followed.

Sec. 5. Form to be Used for Registration.

01. Form 637 (Rev. July 1973) must be used by all persons making application for registration. The information required thereon must be complete. The form provides space for the Employer's Identification Number or Social Security Number, whether the applicant is required to file Form 720, Quarterly Federal Excise Tax Return, and class of tax under which tax-free transactions will be made. The instructions on the reverse side require that supporting information be submitted. This information is an integral part of the application and its absence, brevity or lack of information will be cause for denying registration.

Sec. 6. Coded Numbering System.

01. After January 1, 1974, only registrations with coded numbers followed by a suffix letter may be used. The suffix letters which designate the type of registrant are contained in the instruction on Form 637. Included are 15 categories (Letters "A" through "N") in which applicants may qualify.

02. District Offices have been issuing the coded registration numbers consisting of eight digits since January 23, 1970. The first two digits designate the District Office, the second two digits the year issued, and digits five through eight, the sequence number of the registration forms. Each registration number issued also has a suffix letter which indicates the purpose for which it was issued. For example:

 REGISTRATION FORM NUMBER 34-73-0056-F

Sec. 7. Effective Date.

This Revenue Procedure is effective September 24, 1973, the date of its publication in the Internal Revenue Bulletin.