`(1) MIXED USE PROPERTY OR SERVICE DEFINED- For purposes of this section, the term `mixed use property or service’ is a taxable property or taxable service used for both taxable use or consumption and for a purpose that would not be subject to tax pursuant to section 102(a)(1).

`(2) TAXABLE THRESHOLD- Mixed use property or service shall be subject to tax notwithstanding section 102(a)(1) unless such property or service is used more than 95 percent for purposes that would give rise to an exemption pursuant to section 102(a)(1) during each calendar year (or portions thereof) it is owned.

`(3) MIXED USE PROPERTY OR SERVICES CREDIT- A person registered pursuant to section 502 is entitled to a business use conversion credit (pursuant to section 202) equal to the product of–

`(A) the mixed use property amount; and

`(B) the business use ratio; and

`(C) the rate of tax imposed by section 101.

`(4) MIXED USE PROPERTY AMOUNT- The mixed use property amount for each month (or fraction thereof) in which the property was owned shall be–

`(A) one-three-hundred-sixtieth of the gross payments for real property for 360 months or until the property is sold;

`(B) one-eighty-fourth of the gross payments for tangible personal property for 84 months or until the property is sold;

`(C) one-sixtieth of the gross payments for vehicles for 60 months or until the property is sold; or

`(D) for other types of taxable property or services, a reasonable amount or in accordance with regulations prescribed by the Secretary.

`(5) BUSINESS USE RATIO- For purposes of this section, the term `business use ratio’ means the ratio of business use to total use for a particular calendar month (or portion thereof if the property was owned for only part of said calendar month). For vehicles, the business use ratio will be the ratio of business purpose miles to total miles in a particular calendar month. For real property, the business use ratio is the ratio of floor space used primarily for business purposes to total floor space in a particular calendar month. For tangible personal property (except for vehicles), the business use ratio is the ratio of total time used for business purposes to total time used in a particular calendar year. For other property or services, the business ratio shall be calculated using a reasonable method. Reasonable records must be maintained to support a person’s business use of the mixed use property or service.

`(b) Timing of Business Use Conversion Credit Arising Out of Ownership of Mixed Use Property- A person entitled to a credit pursuant to subsection (a)(3) arising out of the ownership of mixed use property must account for the mixed use on a calendar year basis, and may file for the credit with respect to mixed use property in any month following the calendar year giving rise to the credit.