Kerosene Tax; Aviation Fuel Tax; Taxable Fuel Measurement &
Reporting; Tax on Heavy Trucks & Trailers; Highway Vehicle Use Tax
DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Parts 40, 41, 47, 48, 145, and 602
[TD 8879] RIN 1545-AV71; RIN 1545-AT18
TITLE: Kerosene Tax; Aviation Fuel Tax; Taxable Fuel Measurement and
Reporting; Tax on Heavy Trucks and Trailers; Highway Vehicle Use Tax
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations; conforming amendments to temporary
regulations; and removal of temporary regulations.
SUMMARY: This document contains final regulations relating to the
kerosene and aviation fuel excise taxes, the tax on the use of
certain highway vehicles, and the tax on the first retail sale of
certain tractors and truck, trailer, and semitrailer chassis and
bodies (highway vehicles). The regulations relating to kerosene
affect the tax liability of certain refiners, terminal operators,
and persons that sell, buy, or use kerosene. The regulations
relating to aviation fuel affect certain producers and retailers of
aviation fuel. The regulations relating to the taxes on highway
vehicles affect vehicle manufacturers, dealers, and owners.
DATES: Effective Dates: These regulations are effective March 31,
2000. Applicability Dates: For dates of applicability of these
regulations, see ��48.4052-1(c), 48.4081-1(f), 48.4081-2(f),
48.4081-3(j), 48.4082-2(c), 48.4082-4(d), 48.4082-5(h),
48.4082-6(f), 48.4082-7(f), 48.4101-1(l), 48.4101-2(b),
48.6427-8(f), 48.6427-9(g), 48.6427-10(h), and 48.6427-11(g).
FOR FURTHER INFORMATION CONTACT: Frank Boland (202) 622-3130 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information in these final regulations have been
reviewed in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)) and, pending receipt and evaluation of public
comments, approved by the Office of Management and Budget under
control number 1545-1418.
The collections of information in these regulations are in
��48.4052-1, 48.4081-2, 48.4081-3, 48.4081-7, 48.4082-2, 48.4082-6,
48.4082-7, 48.4091-3, 48.4101-1, 48.4101-2, 48.6427-8, 48.6427-9,
48.6427-10, and 48.6427-11. This information is required to support
exempt transactions, claims for credits and refunds, and to inform
consumers of the type of fuel that is being purchased. The likely
respondents are businesses and other for-profit organizations.
Comments on the collections of information should be sent to the
Office of Management and Budget , Attn: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503, with copies to the Internal Revenue
Servi e , Attn: IRS Reports Clearance Officer, OP:FS:FP, Washington,
DC 20224. Comments on the collections of information should be
received by May 30, 2000. Comments are specifically requested
concerning: Whether the collections of information are necessary for
the proper performance of the functions of the Internal Revenue
Service , including whether the information will have practical
utility;
The accuracy of the estimated burden associated with the collections
of information (see below); How the quality, utility, and clarity of
the information to be collected may be enhanced;
How the burden of complying with the collections of information may
be minimized, including through the application of automated
collection techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
Estimated total annual reporting and/or recordkeeping burden: 97,583
hours. The estimated annual burden per respondent is 17 minutes.
Estimated number of respondents: 346, 080.
Estimated annual frequency of responses: On occasion. An agency may
not conduct or sponsor, and a person is not required to respond to,
a collection of information unless the collection of information
displays a valid control number assigned by the Office of Management
and Budget.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns
and tax return information are confidential, as required by 26
U.S.C. 6103.
Background
Section 4081 imposes a tax on certain removals, entries, and sales
of taxable fuel. Before July 1, 1998, taxable fuel meant gasoline
and diesel fuel. As of that date, however, the definition of taxable
fuel was expanded by the Taxpayer Relief Act of 1997 (Public Law
105-34, 111 Stat. 788 (the 1997 Act)) to include kerosene.
Temporary regulations (TD 8774) relating to this change were
published in the Federal Register on July 1, 1998 (63 FR 35799)
along with a notice of proposed rulemaking (REG-119227-97) cross-
referencing the temporary regulations (63 FR 35893). Written
comments responding to these proposed regulations were received and
a public hearing was held on November 4, 1998.
Proposed regulations (REG-209753-95; PS-6-95)) were published in the
Federal Register (61 FR 10490) on March 14, 1996, relating to, among
other things, the measurement of taxable fuel. Written comments
responding to these proposed regulations were received and a public
hearing was held on June 20, 1996.
After consideration of written comments and comments made at the
public hearings, the proposed regulations are adopted as revised by
this Treasury decision. Comments and revisions are discussed below.
Also, a partial withdrawal of the March 14, 1996, proposed
regulations is published in the Proposed Rules section of this issue
of the Federal Register .
Explanation of Provisions
Definition of Kerosene. The temporary regulations define kerosene as
the two grades of kerosene (No. 1-K and No. 2-K) described in ASTM
specification D 3699 and certain kerosene-type jet fuel. This ASTM
specification describes kerosene in terms of several properties
including distillation range, sulfur content, and color. For
example, No. 1-K kerosene has a sulfur content not greater than 400
parts per million.
Several commentators noted, however, that there are many liquids
that are never commercially known or sold as kerosene but that
nevertheless might meet the broad specifications of ASTM
specification D 3699. These liquids, which are used in the
production of products such as paints and coatings, usually cost
more to produce than kerosene that is sold for fuel uses. Because of
these differences, the commentators concluded that it is highly
unlikely that these liquids would be diverted for use in highway
vehicles. Thus, the commentators suggested that these liquids should
not be treated as kerosene.
The final regulations adopt the suggestion of the commentators by
excluding liquids with certain described properties from the
definition of kerosene. Exemption for Aviation-grade Kerosene. The
1997 Act provides that undyed aviation-grade kerosene may be removed
from a terminal tax free if the kerosene is received by a person
that is registered for purposes of the aviation fuel tax imposed by
section 4091. As a transitional rule, the temporary regulations
provide that tax does not apply to a removal of aviation-grade
kerosene that will be used as a fuel in an aircraft, even if the
person receiving the kerosene is not registered.
The IRS Restructuring and Reform Act of 1998 (Public Law 105-206,
112 Stat. 685 (the 1998 Act)), which was enacted after publication
of the temporary regulations, revised the exemption for aviation-
grade kerosene. Under the 1998 Act, tax is not imposed on aviation-
grade kerosene that the Secretary determines is destined for use as
a fuel in an aircraft.
Under the final regulations, existing rules relating to tax-free
transactions within the bulk transfer/terminal system will continue
to apply to aviation-grade kerosene even if the kerosene will be
used as a fuel in an aircraft. Thus, a sale of aviation-grade
kerosene within a pipeline to an airline for aircraft use may be
made tax free only if the airline is a taxable fuel registrant. In
this regard, the final regulations also reflect Announcement 99-40
(1999-16 I.R.B. 10), which provides a transitional registration rule
for certain throughputters and kerosene terminal operators.
Removals and entries of undyed aviation-grade kerosene may be made
tax free under the final regulations if (1) the person otherwise
liable for tax (such as the position holder) delivers the kerosene
into the fuel supply tank of its own aircraft or (2) the kerosene is
sold and the buyer certifies to the person otherwise liable for tax
that the kerosene will be used by the buyer as a fuel in an aircraft
or resold for such use. Any later sale of the aviation-grade
kerosene will be subject to tax unless the subsequent seller
receives a similar certificate from its buyer or delivers the
kerosene into the fuel supply tank of the buyer's aircraft. In
addition, the IRS may withdraw the right of a buyer to provide a
certificate in the future if the buyer uses the aviation-grade
kerosene other than as a fuel in an aircraft.
A commentator noted that airlines often use a small percentage of
their purchases of aviation-grade kerosene as a fuel in airport
ground equipment, thus making it impossible for them to certify that
all of this fuel will be for aircraft use. The commentator suggested
that a buyer should be allowed to certify that only a percentage of
its purchases will be used as a fuel in an aircraft. The final
regulations adopt this suggestion. Thus, if an airline certifies to
a position holder that 99 percent of all of its purchases of
aviation-grade kerosene from a certain terminal will be for use as a
fuel in an aircraft, then the position holder will the liable for
the section 4081 tax on one percent of all its sales to the airline
at that terminal.
A commentator suggested that tax should not be imposed on the
nonbulk removal of aviation-grade kerosene from an approved terminal
if the kerosene is received at another approved terminal or is sold
for use in an aircraft outside the United States. Under the final
regulations, both removals may be made tax free if the proper
certification regarding aircraft use is given by the buyer or the
person otherwise liable for tax delivers the aviation-grade kerosene
into the fuel supply tank of its own aircraft.
A commentator noted that aviation-grade kerosene is aviation fuel
and thus is subject to tax under section 4091 when it is sold by its
producer. Section 4092 exempts a sale from the aviation fuel tax if
the buyer is a registered producer or certifies that it will use the
fuel in a nontaxable use such as use other than as a fuel in an
aircraft.
The commentator suggested that if the section 4081 tax is imposed on
the removal of any aviation-grade kerosene because the buyer of the
kerosene does not certify that it will be used in an aircraft, then
an exemption from the section 4091 tax automatically should apply
regardless of the status of the buyer. Thus, for example, if the
section 4081 tax is imposed on a removal of aviation-grade kerosene
at the terminal rack, the section 4091 tax should not be imposed on
any subsequent sale to an unregistered person that buys the kerosene
for resale for nonaircraft use, such as in highway vehicles or as
heating oil. The commentator contends that this suggestion would
ease compliance and administrative burdens by eliminating the need
to certify for section 4091 purposes.
The final regulations do not adopt this suggestion because section
4092 allows tax-free sales of aviation fuel only to registered
producers and persons buying for their own nontaxable use. This
suggestion, in contrast, would allow tax-free sales to resellers
that are not producers. The IRS has published guidance regarding the
aviation fuel tax imposed by section 4091 in Notice 88-30 (1988-1
C.B. 497), Notice 88- 132 (1988-2 C.B. 552), and Notice 89-38
(1989-1 C.B. 678).
Exemption for Feedstock Purpose. Under the 1997 Act and the
temporary regulations, tax is not imposed on undyed kerosene that is
received from a pipeline or vessel by a registered person for the
person's use as a feedstock; that is, use in the manufacture or
production of any substance other than gasoline, diesel fuel, or
special fuels referred to in section 4041. The 1997 Act also
provides that, to the extent provided in regulations, undyed
kerosene may be removed from a terminal tax free if the kerosene is
removed for use as a feedstock. The temporary regulations do not
implement this latter provision. However, several commentators
suggested that, without the application of this provision, small
feedstock users that buy kerosene at a terminal rack bear the burden
of the tax and then must claim a credit or refund. This puts the
small users at a competitive disadvantage compared to larger users
that may buy bulk quantities of kerosene tax free for their
facilities that are connected to a pipeline.
The final regulations adopt the suggestion of the commentators by
generally allowing tax-free removals of kerosene from a terminal if
the person receiving the kerosene is registered and certifies that
it will use the kerosene for a feedstock purpose. The IRS may revoke
this person's registration if the person uses the kerosene other
than for a feedstock purpose, such as to power machinery in a
factory where paint is produced.
A commentator suggested that the packaging of kerosene into any
container that is less than 55 gallons should be treated as a
feedstock purpose. This suggestion is not adopted in the final
regulations because this activity is not the manufacture or
production of a nonfuel substance.
Exemption for Certain Wholesale Distributors. The 1997 Act provides
that, to the extent provided in regulations, undyed kerosene may be
removed from a terminal tax free if the kerosene is received by a
registered wholesale distributor that sells kerosene exclusively to
ultimate vendors that sell kerosene from a pump that is not suitable
for use in fueling any diesel-powered highway vehicle or train (a
blocked pump). The temporary regulations do not provide rules for
this provision.
A commentator suggested that the final regulations should implement
this provision because it would reduce the number of refund claims
that are filed by ultimate vendors and reduce the costs of the fuel
for these vendors, many of whom are small businesses. Another
commentator suggested, on the other hand, that the provision would
increase the availability of untaxed, undyed kerosene and thus
increase opportunities for diversion of this fuel for taxable
purposes.
The final regulations do not implement this provision because
Treasury and the IRS share the concern of the latter commentator.
Treasury and the IRS will, however, continue to monitor the matter
to determine if it is appropriate to provide rules for the provision
at a later date.
Claims Relating to Sales of Kerosene from Blocked Pumps. Under the
1997 Act, a credit or refund is allowed to a registered ultimate
vendor that sells taxed, undyed kerosene from a blocked pump. The
temporary regulations define a blocked pump as a retail fuel pump at
a fixed location that is used to dispense undyed kerosene for use by
the buyer in a nontaxable use and cannot be used to dispense
kerosene directly into the fuel supply tank of a diesel-powered
highway vehicle or train (because, for example, of its distance from
a road surface or train track or the length of its delivery hose).
In addition, blocked pumps must display a prescribed notice.
Treasury and the IRS received many comments relating to the
definition of blocked pump. Several commentators noted that many
kerosene pumps are on an island next to gasoline pumps so that
vehicular access cannot be restricted. Requiring blocked pumps to be
on a separate island would not be practical because many service
stations do not have the physical space for such an arrangement.
Shortening the delivery hose on these pumps would not be practical
because doing so would prevent a container from resting on the
ground while it is being filled, as safety rules require.
Several commentators suggested expanding the definition to include
pumps that are activated by an on-site attendant before each use and
are within the direct line of sight of the attendant authorizing the
sale to the customer. Other commentators noted that many people who
use kerosene for heating purposes do not buy it from a retail pump.
So that these customers could obtain undyed kerosene at a tax-
excluded price, these commentators suggested that a credit or refund
should be allowed to registered ultimate vendors that make home
deliveries of undyed kerosene for heating purposes and that sell
kerosene in small containers.
Under the final regulations, a blocked pump is a pump that, because
of the pump's physical limitations (for example, a short hose),
cannot be used to fuel a vehicle, or a pump that is locked by the
vendor after each sale and unlocked by the vendor in response to a
request by a buyer for undyed kerosene for use other than as a fuel
in a diesel-powered highway vehicle or train. As a condition to
making a claim with regard to kerosene sold from this latter type of
blocked pump, the vendor must obtain the name and address of anyone
who buys more than five gallons of kerosene in a single sale. A
vendor's registration may be revoked if it allows anyone to fuel a
highway vehicle from a blocked pump.
There is no authority in the Internal Revenue Code (Code) to allow
ultimate vendor refunds for kerosene solely because the kerosene is
delivered to homes for heating purposes or is sold in small
containers. Thus, the final regulations do not contain such a
provision.
Claims Relating to Sales of Kerosene for Blending During Periods of
Extreme Cold. The 1997 Act provides that, to the extent provided in
regulations, a credit or refund is allowed to a registered ultimate
vendor that sells kerosene for blending with heating oil to be used
during periods of extreme or unseasonable cold. The temporary
regulations do not provide rules for this provision.
A commentator suggested that the final regulations should implement
this provision and define the phrase "period of extreme or
unseasonable cold" as including "all the days in November through
February."
Under the final regulations, if the IRS declares an area to be
affected by extremely cold weather conditions, a credit or refund
generally will be allowed to a registered ultimate vendor that sells
undyed kerosene for blending with diesel fuel in that affected area
if the blended fuel is to be used for heating purposes. It is
expected that the periods during which any declaration of extreme
cold issued under this provision will be in effect will be limited.
Registration of Heavy Vehicle Manufacturers and Retailers. The tax
on the sale of heavy vehicles imposed by section 4051 applies to the
first retail sale by the manufacturer, importer, or retailer of a
vehicle. The tax is not imposed if a vehicle is sold for resale or
for leasing on a long-term basis. Under regulations issued in 1988,
this tax-free treatment applied only if both the seller and the
buyer were registered by the IRS. The 1997 Act provides, however,
that the Secretary shall prescribe regulations so that sales between
unregistered parties may be made tax-free if the buyer states under
penalties of perjury that the vehicle will be resold. This provision
of the 1997 Act is effective January 1, 1998. The temporary
regulations implementing the provision are effective on July 1,
1998, the publication date of the temporary regulations.
Several commentators suggested that the final regulations should be
effective on January 1, 1998, because the commentators believe that
the 1997 Act eliminated the registration requirement as of that
date.
The IRS and Treasury are concerned that the suggested change might
disqualify sales that would have been tax free under the 1988
regulations. Accordingly, the final regulations retain the July 1,
1998, effective date. They provide, however, that sales (including
sales between unregistered parties) that occurred after December 31,
1997, and before July 1, 1998, and otherwise satisfy the
requirements of the final regulations may be made tax free.
Measurement of Taxable Fuel. Existing regulations provide that
gallons of taxable fuel may be measured on the basis of actual
volumetric gallons, gallons adjusted to 60 degrees Fahrenheit, or
any other temperature adjustment method approved by the
Commissioner.
The March 14, 1996, proposed regulations proposed to modify this
rule so that taxable fuel would be measured on the basis of actual
volumetric gallons or gallons adjusted to 60 degrees Fahrenheit,
whichever is the basis for measurement under the position holder's
terminaling agreement with the terminal operator. A commentator
suggested that measurement at a particular terminal should be
applied consistently on an annual basis.
Under the final regulations, annual consistency is required, on a
terminal-by-terminal basis, within each one year period beginning on
July 1. Thus, a position holder may use only one of the above
described bases of measurement with respect to all taxable fuel
removed from any particular terminal during each one year period.
Highway Use Tax. Section 4481 imposes a tax on the use of certain
highway vehicles. A State to which an application is made to
register a highway vehicle generally must receive from the applicant
proof of payment of this tax. Proof of payment consists of a
receipted Schedule 1 of Form 2290, "Heavy Highway Vehicle Use Tax
Return," that is returned to the taxpayer by the IRS after the
taxpayer has paid tax on the vehicle. In most cases, the Schedule 1
must include the vehicle identification number (VIN) of each vehicle
for which the taxpayer is reporting tax.
However, existing regulations provide that a taxpayer reporting tax
on more than 21 vehicles need not list the VIN of any vehicle.
Effective July 1, 2000, the final regulations remove this provision.
In addition, the instructions for Form 2290 will be changed to
require the listing of the VIN of each vehicle reported. The final
regulations also remove several obsolete provisions relating to the
highway use tax.
Information Reporting. Section 4101(d) allows the IRS to require
information reporting by (1) any person registered under section
4101 and (2) such other persons as the IRS deems necessary to
administer the taxes on taxable fuel and aviation fuel.
The IRS is developing an information reporting program (Excise
Summary Terminal Activity Reporting System (ExSTARS)) for terminal
operators and pipeline and vessel operators. The IRS anticipates
that ExSTARS will begin later in 2000.
Under the final regulations, information reports to be required by
the IRS under section 4101(d) will cover a one month period and a
report will be due by the end of the month following the month to
which it relates. As a transitional rule, reports under the new
rules relating to any month in 2000 will not be due until February
28, 2001.
Registration of pipeline and vessel operators. Effective April 1,
2001, operators of pipelines and vessels in the bulk
transfer/terminal system will be required to be registered by the
IRS.
Effect on Other Documents
The following publications are obsolete as of March 31, 2000:
Rev. Rul. 57-259, 1957-1 C.B. 423.
Rev. Rul. 57-499, 1957-2 C.B. 788.
Rev. Rul. 73-292, 1973-2 C.B. 376.
Rev. Rul. 78-218, 1978-1 C.B. 367.
Rev. Rul. 86-62, 1986-1 C.B. 325.
Announcement 99-40, 1999-16 I.R.B. 10.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It also has been
determined that section 553(b) of the Administrative Procedure Act
(5 U.S.C. chapter 5) does not apply to these regulations.
It is hereby certified that the collection of information in these
regulations will not have a significant economic impact on a
substantial number of small entities. This certification is based
upon the fact that the time required to prepare and submit the
exemption certificates described in these regulations (many of which
are similar to certificates that are already in use) is minimal and
will not have a significant impact on those small entities that
choose to provide the certificates. Therefore, a Regulatory
Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C.
chapter 6) is not required.
Pursuant to section 7805(f) of the Code, the notices of proposed
rulemaking preceding these regulations were submitted to the Chief
Counsel for Advocacy of the Small Business Administration for
comment on their impact on small business.
Drafting Information The principal author of these regulations is
Frank Boland, Office of Assistant Chief Counsel (Passthroughs and
Special Industries). However, other personnel from the IRS and
Treasury Department participated in their development. List of
Subjects 26 CFR Parts 40, 48, and 145 Excise taxes, Reporting and
recordkeeping requirements.
26 CFR Part 41 Excise taxes, Motor vehicles, Reporting and
recordkeeping requirements
26 CFR Part 47 Biologics, Excise taxes, Gasoline, Reporting and
recordkeeping requirements.
26 CFR Part 602 Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations Accordingly, under the
authority of 26 U.S.C. 7805, 26 CFR Chapter I is amended as follows:
PART 40-EXCISE TAX PROCEDURAL REGULATIONS
Paragraph 1. The authority citation for part 40 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * * �40.6011(a)-1 [Amended ] Par. 2.
Section 40.6011(a)-1 is amended as follows:
1. In paragraph (b)(2) introductory text, the language "Effective
January 1, 1994, the" is removed and "The" is added in its place.
2. In paragraph (b)(2)(v), the language "and kerosene" is added
after "diesel fuel".
PART 41-EXCISE TAX ON USE OF CERTAIN HIGHWAY MOTOR VEHICLES
Par. 3. The authority citation for part 41 continues to read in part
as follows: Authority: 26 U.S.C. 7805 * * *
Par. 4. Section 41.0-1 is revised to read as follows: �41.0-1
Introduction. The regulations in this part are designated "Highway
Use Tax Regulations." The regulations in this part relate to the tax
on the use of certain highway vehicles imposed by section 4481 and
to certain associated administrative provisions. ��41.0-2 and 41.0-3
[Removed ] Par. 5. Sections 41.0-2 and 41.0-3 are removed. Par. 6.
Section 41.4481-1 is amended as follows:
1. Paragraphs (a) and (b) are revised.
2. Paragraph (c)(1) introductory text, is amended by removing the
language "taxable periods beginning after June 30, 1984," and adding
"a taxable period" in its place.
3. Paragraph (c)(3) is amended by revising the introductory text.
4. Paragraph (d)(1) is amended by removing from the last sentence
the language "Form 843 (Claim)" and adding "Form 8849 (or such other
form as the Commissioner may designate)" in its place.
5. Paragraph (e) introductory text, is amended by adding the
language "section 4481 and" after "The application of".
The revisions read as follows: �41.4481-1 Imposition of tax.
(a) In general. Tax is imposed on the use during a taxable period of
any registered highway motor vehicle that (together with the
semitrailers and trailers customarily used in connection with
highway motor vehicles of the same type as such highway motor
vehicle) has a taxable gross weight of at least 55,000 pounds.
(b) Rate of tax. For the rate of tax generally, see section 4481(a).
For the rate of tax for certain vehicles used in logging, see
section 4483(e). For the rate of tax for certain vehicles base-
plated in Canada or Mexico, see section 4483(f). For a special rule
for the taxable period in which the tax terminates, see section
4482(d).
(c) * * *
(3) If the taxable gross weight of a vehicle increases during the
month in which the vehicle is first used in a taxable period, the
tax for the vehicle for the taxable period is computed on the basis
of the increased weight. If the taxable gross weight of a vehicle
increases after the month in which the vehicle was first used in a
taxable period, the additional tax liability, if any, that results
from the increased weight is calculated according to the following
formula:
* * * * *
�41.4481-1T [Removed ]
Par. 7. Section 41.4481-1T is removed.
Par. 8. In �41.4481-2, paragraph (a)(1) is revised to read as
follows:
�41.4481-2 Persons liable for tax.
(a) * * * (1)(i) A person is liable for the tax imposed by section
4481 with respect to the use of a highway motor vehicle in a taxable
period if the vehicle is registered in the person's name--
(A) At the time of the first use of the vehicle in the taxable
period;
(B) In the case of a vehicle under a suspension of tax described in
�41.4483- 3(a), at the time the use on the public highways during
the taxable period exceeds 5,000 miles (7,500 miles for agricultural
vehicles);
(C) At the time that an increase in the taxable gross weight of the
vehicle results in an additional tax liability (as computed under
�41.4481-1(c)(3)) if the increase occurs after the month in which
the vehicle was first used in the taxable period; or
(D) At the time of any use during the taxable period that is after
the first use during the period, but only to the extent that the tax
or any installment payment of the tax has not previously been paid.
(ii) In any case in which more than one person is liable for the tax
for a taxable period, the liability of all persons is satisfied to
the extent that the tax is paid by any person liable for the tax.
* * * * * �41.4482(a)-1 [Amended ] Par. 9. Section 41.4482(a)-1 is
amended as follows:
1. Paragraph (a)(2) is amended by removing the language "paragraph
(c) of this section" and adding "�48.4061(a)-1(d) of this chapter"
in its place.
2. Paragraph (c) is removed.
Par. 10. Section 41.4482(b)-1 is amended as follows: 1. Paragraph
(a) is revised.
2. Paragraphs (b), (c), and (d) are removed.
3. Paragraph (e) is redesignated as paragraph (b) and amended as
follows: a. The heading is revised.
b. In newly designated paragraph (b)(1), the first sentence is
revised and the second sentence is removed.
c. In newly designated paragraph (b)(2), the language "paragraph
(a)" is removed and "paragraph (b)(1)" is added in its place.
4. Paragraph (f) is redesignated as paragraph (c).
5. The undesignated authority citation at the end of the section is
removed.
The revisions read as follows: �41.4482(b)-1 Definition of taxable
gross weight.
(a) Actual unloaded weight--(1) In general. Actual unloaded weight
means the empty (or tare) weight of the truck, truck-tractor, or
bus, fully equipped for service.
(2) Trucks and truck-tractors. A truck or truck-tractor fully
equipped for service includes the body (whether or not designed and
adapted primarily for transporting cargo, as for example, concrete
mixers); all accessories; all equipment attached to or carried on
such truck or truck-tractor for use in connection with the movement
of the vehicle by means of its own motor or for use in the
maintenance of the vehicle; and a full complement of lubricants,
fuel, and water. It does not include the driver, any equipment (not
including the body) attached to or carried on the vehicle for use in
handling, protecting, or preserving cargo, or any special equipment
(such as an air compressor, crane, specialized oilfield machinery,
etc.) mounted on the vehicle for use on construction jobs, in
oilfield operations, etc.
(3) Buses. A bus fully equipped for service includes the body; all
accessories; all equipment attached to or carried on such bus for
use in connection with the movement of the vehicle by means of its
own motor, for use in the maintenance of the vehicle, or for the
accommodation of passengers or others (such as air conditioning
equipment and sanitation facilities, etc.); and a full complement of
lubricants, fuel, and water. It does not include the driver.
(b) Determination of taxable gross weight--(1) In general. The
taxable gross weight of a highway motor vehicle is the sum of the
actual unloaded weight of the vehicle fully equipped for service,
the actual unloaded weight of any semitrailers or trailers fully
equipped for service customarily used in combination with the
vehicle, and the weight of the maximum load customarily carried on
the vehicle and on any semitrailers or trailers customarily used in
combination with the vehicle. * * *
* * * * *
�41.4482(b)-1T [Removed ] Par. 11. Section 41.4482(b)-1T is removed.
Par. 12. Section 41.4482(c)-1 is amended as follows: 1. The section
heading is revised.
2. Paragraphs (a), (b), and (d) are revised.
The revisions read as follows: �41.4482(c)-1 Definition of State,
taxable period, use, and customarily used.
(a) State. State includes any State, any political subdivision of a
State, the District of Columbia, and, to the extent provided by
section 7871, any Indian tribal government.
(b) Taxable period. For the definition of taxable period, see
section 4482(c).
* * * * *
(d) Customarily used. A semitrailer or trailer is treated as
customarily used in connection with a highway motor vehicle if the
vehicle is equipped to tow the semitrailer or trailer.
Par. 13. Section 41.4483-1 is revised to read as follows: �41.4483-1
State exemption.
Use of a highway motor vehicle by a State is exempt from the tax
imposed by section 4481. For this purpose, the term use by a State
means the operation by a State on the public highways in the United
States of any highway motor vehicle, whether or not such highway
motor vehicle is owned by the State.
Par. 14. Section 41.4483-2 is amended as follows:
1. Paragraph (a) is amended by removing the language "section
6421(b)(2), as set forth in".
2. Paragraph (e) is amended as follows:
a. Paragraph (e) introductory text, is amended by removing the
language "set forth in section 6421(b)(2)".
b. Paragraph (e)(1) is amended by removing the language "(rather
than any different period prescribed in section 6421(b)(2))".
c. Paragraph (e)(2), first sentence, is amended by removing the
language "(see section 4263(a))".
d. Paragraph (e)(2), last sentence, is revised.
3. Paragraph (f) Example (1), penultimate sentence, is amended by
removing the language "(not including any tax on the transportation
of persons imposed by section 4261)".
The revision reads as follows: �41.4483-2 Exemption for certain
transit-type buses.
* * * * *
(e) * * *
(2) * * * In determining the total of such passenger fare revenue,
revenue from sources such as charter fees, rentals of property,
advertising receipts, etc., is not taken into account.
* * * * *
�41.4483-3 [Amended ] Par. 15. Section 41.4483-3 is amended as
follows:
1. Paragraph (a)(2) is amended by removing the language "(Federal
Heavy Vehicle Use Tax Return)".
2. Paragraph (b) is amended as follows:
a. The first sentence is amended by removing the language "shall
pay" and adding "is liable for" in its place.
b. The last two sentences are removed.
3. Paragraph (f) is amended as follows:
a. The second sentence is removed.
b. The last sentence is amended by adding the language "and
�41.6011(a)-1 (a)(3) for a requirement that certain transferees
described in this paragraph (f) must file a return" after
"suspension from tax".
�41.4483-5 [Removed ] Par. 16. Section 41.4483-5 is removed.
�41.4484-1 [Removed ] Par. 17. Section 41.4484-1 is removed.
�41.6001-1 [Amended ] Par. 18. Section 41.6001-1 is amended as
follows:
1. Paragraph (a)(6) is amended by removing the language "for taxable
periods after June 30, 1984".
2. Paragraph (a)(7) is amended as follows:
a. The first sentence is amended by removing the language "or, for
taxable periods after June 30, 1984," and adding "or" in its place.
b. The last sentence is removed.
3. Paragraph (b) is amended by removing the language "whether he
meets" and adding "whether it meets" in its place.
�41.6001-2 [Amended ] Par. 19. Section 41.6001-2 is amended as
follows:
1. Paragraph (a), second sentence, is amended by removing the
language "104(b)(5)" and adding "104(b)(4)" in its place.
2. Paragraph (c)(1)(ii) introductory text, is amended by removing
the language "If a receipted" and adding "With respect to taxable
periods beginning before July 1, 2000, if a receipted" in its place.
3. Paragraph (c)(1)(iii), first sentence, is amended by removing the
language "If
a Schedule 1" and adding "With respect to taxable periods beginning
before July 1, 2000, if a Schedule 1" in its place.
4. Paragraph (d) is amended as follows:
a. Example (1), seventh sentence, is amended by removing the
language "�41.4482(b)-1(e)" and adding "�41.4482(b)-1" in its place.
5. Example (2), second sentence, is amended by removing the language
"�41.4482(b)-1(e)" and adding "�41.4482(b)-1" in its place.
6. Example (4) is removed.
Par. 20. Section 41.6011(a)-1 is revised to read as follows:
�41.6011(a)-1 Returns.
(a) In general. (1) A person that is liable for tax under
�41.4481-2(a)(1)(i)(A),
(B), or (C) must file a return for the taxable period with respect
to the tax imposed by section 4481.
(2) A person that is liable for tax under �41.4481-2(a)(1)(i)(D)
must file a return for a taxable period with respect to the tax
imposed by section 4481 if the Commissioner notifies the person that
the tax for the taxable period has not been paid in full.
(3) A transferee of a vehicle that receives a statement described in
the first sentence of �41.4483-3(f) must file a return with the
statement attached.
(b) Form 2290. The return required under paragraph (a) of this
section is Form 2290, "Heavy Highway Vehicle Use Tax Return," or
such other return as the Commissioner may prescribe. The return is
made in accordance with the instructions applicable to the form.
Par. 21. Section 41.6071(a)-1 is amended as follows:
1. Paragraph (a) is revised.
2. Paragraph (b) is removed.
3. Paragraph (c) is redesignated as paragraph (b).
4. Newly designated paragraph (b) is amended by removing the
language "(but in no event earlier than the time prescribed in
paragraph (a)(1) of this section for filing a return)".
5. Paragraphs (d), (e), and (f) are removed.
The revision reads as follows.
�41.6071(a)-1 Time for filing returns.
(a) In general. Except as provided in paragraph (b) of this section,
a return described in �41.6011(a)-1 must be filed by the last day of
the month following the month in which--
(1) A person becomes liable for tax under �41.4481-2(a)(1)(i)(A),
(B), or (C);
(2) A person that is liable for tax under �41.4481-2(a)(1)(i)(D) is
notified by the Commissioner that the tax has not been paid in full;
or
(3) A transferee described in �41.4483-3(f) acquires the vehicle.
* * * * *
�41.6081(a)-1 [Removed ] Par. 22. Section 41.6081(a)-1 is removed.
Par. 23. Section 41.6091-1 is revised to read as follows: �41.6091-1
Place for filing returns.
(a) In general. Except as provided in paragraph (b) of this section,
returns must be filed in accordance with the instructions applicable
to the form on which the return is made.
(b) Hand-carried returns--(1) Persons other than corporations.
Returns of persons other than corporations that are filed by hand
carrying must be filed with the Commissioner in the internal revenue
district in which is located the principal place of business or
legal residence of the person.
(2) Corporations. Returns of corporations that are filed by hand
carrying must be filed with the Commissioner in the internal revenue
district in which is located the principal place of business or
principal office or agency of the corporation.
Par. 24. Section 41.6101-1 is revised to read as follows: �41.6101-1
Period covered by returns.
Each return is for a taxable period as defined in section 4482.
Par. 25. Section 41.6109-1 is revised to read as follows: �41.6109-1
Identifying numbers.
Every person required under �41.6011(a)-1 to make a return must
provide the identifying number required by the instructions to the
form on which the return is made.
Par. 26. Section 41.6151(a)-1 is revised to read as follows:
�41.6151(a)-1 Time and place for paying tax.
The tax must be paid at the time prescribed in �41.6071(a)-1 for
filing the return and at the place prescribed in �41.6091-1 for
filing the return. ��41.6161(a)(1)-1,41.6302(b)-1,and 41.7805-1
[Removed ] Par. 27. Sections 41.6161(a)(1)-1, 41.6302(b)-1, and
41.7805-1 are removed.
PART 47--[REMOVED ] Par. 28. Part 47 is removed.
PART 48-MANUFACTURERS AND RETAILERS EXCISE TAXES
Par. 29. The authority citation for part 48 is amended by removing
the entries for sections 48.4081-7 and 48.4081-9(e); 48.4082-6T,
48.4082-7T, and 4082- 8T; 48.4101-2; 48.4101-3T; 48.6427-8;
48.6427-9; and 48.6427-10T and 48.6427-11T and adding entries in
numerical order to read in part as follows: Authority: 26 U.S.C.
7805 * * *
Section 48.4052-1 also issued under 26 U.S.C. 4052(g). * * *
Section 48.4081-7 also issued under 26 U.S.C. 4081(e). * * *
Section 48.4082-6 also issued under 26 U.S.C. 4082(d).
Section 48.4082-7 also issued under 26 U.S.C. 4082(d). * * *
Section 48.4101-2 also issued under 26 U.S.C. 6071(a). * * *
Section 48.6427-8 also issued under 26 U.S.C. 6427(m).
Section 48.6427-9 also issued under 26 U.S.C. 6427(m).
Section 48.6427-10 also issued under 26 U.S.C. 6427(m).
Section 48.6427-11 also issued under 26 U.S.C. 6427(m).
Par. 30. The undesignated editorial note and its authority citation
at the end of the authority citation are removed.
�48.0-2 [Amended ] Par. 31 In �48.0-2, paragraph (a)(2) is removed
and reserved.
�48.4041-21 [Amended ] Par. 32. Section 48.4041-21, paragraph (c)
(1), first sentence, is amended by removing the language
"�48.4082-4(c)(1) through (c)(4)(i) or (c)(5) through (c)(10)." and
adding "section 4041(a)(3)(B), (b)(1), (f), (g), or (h)." in its
place.
Par. 33. In Subpart H, �48.4052-1 is added under the undesignated
center heading "Motor Vehicles" to read as follows: �48.4052-1 Heavy
trucks and trailers; certification requirement.
(a) In general. Tax is not imposed by section 4051 on the sale of an
article for resale or leasing in a long-term lease if, by the time
of sale, the seller has in good faith accepted from the buyer a
statement that the buyer executed in good faith and that is in
substantially the same form, and subject to the same conditions, as
the certificate described in �145.4052-1(a)(6) of this chapter,
except that the certificate must be signed under penalties of
perjury and need not refer to Form 637 or include a registration
number.
(b) References to �145.4052-1(a)(2) of this chapter. References to
�145.4052- 1(a)(2) of this chapter appearing in �145.4052-1 of this
chapter apply also to paragraph (a) of this section.
(c) Effective date. This section is applicable after June 30, 1998.
In addition, tax is not imposed on a sale occurring after December
31, 1997, and before July 1, 1998, if the conditions of paragraph
(a) of this section are satisfied. Par. 34. Section 48.4081-1 is
amended as follows:
1. Paragraph (b) is amended by:
a. Revising the definition of Aviation gasoline.
b. Removing the definition of Diesel-powered boat.
c. Adding the definition of Excluded liquid in alphabetical order.
d. Adding the definition of Kerosene in alphabetical order.
e. Revising the definition of Rack.
f. Removing the language "(as defined in �48.4041-8(f))" in the
definition of Removal, first sentence.
g. Removing the language "subject to the limitations of section
7871, any Indian tribal government." and adding "to the extent
provided by section 7871, any Indian tribal government." in its
place in the definition of State.
h. Revising the definition of Taxable fuel.
i. Adding the language "as such" after "is registered" in the
definition of Taxable fuel registrant.
j. Removing the language "operated by a taxable fuel registrant if
all of the finished gasoline and diesel fuel (other than diesel fuel
dyed in accordance with �48.4082-1(b))" and adding "where finished
gasoline, undyed diesel fuel, or undyed kerosene is stored if the
facility is operated by a taxable fuel registrant and all such
taxable fuel" in its place in the definition of Terminal, last
sentence.
2. Paragraph (c)(1)(i) introductory text, is amended by removing the
language "and (c)(iii)" and adding "and (c)(1)(iii)" in its place.
3. Paragraph (c)(1)(i)(A) is amended by adding the language "(other
than taxable fuel for which a credit or payment has been allowed)"
after "4081(a)".
4. Paragraphs (c)(2) and (d) are revised.
5. Paragraphs (e) and (f) are added.
The revisions and additions read as follows: �48.4081-1 Taxable
fuel; definitions.
* * * * *
(b) * * *
Aviation gasoline means all special grades of gasoline that are
suitable for use in aviation reciprocating engines and covered by
ASTM specification D 910 or military specification MIL-G-5572. For
availability of ASTM and military specifications, see paragraph (d)
of this section.
* * * * *
Excluded liquid means any liquid that--
(1) Contains less than four percent normal paraffins; or
(2) Has a--
(i) Distillation range of 125
E
F. or less;
(ii) Sulfur content of 10 ppm or less; and
(iii) Minimum color of +27 Saybolt.
* * * * * Kerosene means any liquid that meets the specifications
for kerosene or would meet those specifications but for the presence
in the liquid of a dye of the type described in �48.4082-1(b). A
liquid meets the specifications for kerosene if it is one of the two
grades of kerosene (No. 1-K and No. 2-K) covered by ASTM
specification D 3699, or kerosene-type jet fuel covered by ASTM
specification D 1655 or military specification MIL-DTL-5624T (Grade
JP-5) or MIL-DTL-83133E (Grade JP-8). For availability of ASTM and
military specifications, see paragraph (d) of this section.
However, the term does not include excluded liquid.
* * * * *
Rack means a mechanism capable of delivering taxable fuel into a
means of transport other than a pipeline or vessel.
* * * * *
Taxable fuel means gasoline, diesel fuel, and kerosene.
* * * * *
(c) * * *
(2) Diesel fuel--(i) In general. Except as provided in paragraph (c)
(2)(ii) of this section, diesel fuel means any liquid that, without
further processing or blending, is suitable for use as a fuel in a
diesel-powered highway vehicle or diesel-powered train.
(ii) Exclusion. Diesel fuel does not include gasoline, kerosene,
excluded liquid, No. 5 and No. 6 fuel oils covered by ASTM
specification D 396, or F-76 (Fuel Naval Distillate) covered by
military specification MIL-F-16884. For availability of ASTM and
military specifications, see paragraph (d) of this section.
* * * * *
(d) ASTM and military specifications. ASTM specifications may be
obtained from the American Society for Testing and Materials, 100
Barr Harbor Drive, West Conshohocken, PA 19428. Military
specifications may be obtained from the Standardization Document
Order Desk, Building 4, Section D, 700 Robbins Avenue, Philadelphia,
PA 19111.
(e) Other definitions. For other definitions relating to taxable
fuel, see ��48.4081-6(b), 48.4082-5(b), 48.4082-6(b), 48.4082-7(b),
48.4101-1(b), 48.6427-9(b), 48.6427-10(b), and 48.6427-11(b).
(f) Effective date. (1) Except as provided in paragraph (f)(2) of
this section, this section is applicable after December 31, 1993.
(2) In paragraph (b) of this section, the definition of aviation
gasoline and the third sentence in the definition of terminal are
applicable after January 1, 1998, and the definitions of kerosene,
excluded liquid, and taxable fuel are applicable after June 30,
1998. Paragraph (c)(2) of this section is applicable after December
31, 1997.
�48.4081-1T [Removed ] Par. 35. Section 48.4081-1T is removed.
Par. 36. Section 48.4081-2 is amended as follows:
1. Paragraph (b) is amended by removing the language "Except as
provided in �48.4081-4 (relating to gasoline blendstocks) and
�48.4082-1 (relating to dyed diesel fuel), tax" and adding "Tax" in
its place.
2. Paragraph (c)(3) is amended by adding the language "or kerosene"
after "diesel fuel" each place it appears.
3. Paragraph (e) is revised.
4. Paragraph (f) is added.
The addition and revision read as follows: �48.4081-2 Taxable fuel;
tax on removal at a terminal rack.
* * * * *
(e) Exemptions. For exemptions from the tax imposed under this
section, see ��48.4081-4 (relating to gasoline blendstocks),
48.4082-1 (relating to dyed diesel fuel and dyed kerosene),
48.4082-5 (relating to diesel fuel and kerosene used in Alaska),
48.4082-6 (relating to aviation-grade kerosene), and 48.4082-7
(relating to kerosene used for a feedstock purpose).
(f) Effective date. This section is applicable after December 31,
1993.
Par. 37. Section 48.4081-3 is amended as follows:
1. Paragraph (a) is amended by removing the last sentence.
2. Paragraph (b)(1) is amended as follows:
a. In the introductory text, the language "Except as provided in
paragraph (b)(2) of this section (relating to an exemption for
certain refineries), �48.4081-4 (relating to gasoline blendstocks),
and �48.4082-1 (relating to dyed diesel fuel), tax" is removed and
"Tax" is added in its place.
b. In paragraph (b)(1)(i), the language "of taxable fuel" is added
after "A removal".
c. In paragraph (b)(1)(ii), the language "of taxable fuel" is added
after "A removal".
d. In paragraph (b)(1)(iii), third sentence, the language
"�40.6302(c)-1(e)(4)" is removed and "�40.6302(c)-1(f)(4)" is added
in its place.
3. In paragraph (c)(1) introductory text, the language "Except as
provided in �48.4081-4 (relating to gasoline blendstocks) and
�48.4082-1 (relating to dyed diesel fuel), a tax" is removed and
"Tax" is added in its place.
4. In paragraph (d)(1), the language "A tax is imposed" is removed
and "Tax is imposed" is added in its place.
5. In paragraph (e)(1) introductory text, the language "Except as
provided in �48.4081-4 (relating to gasoline blendstocks) and
�48.4082-1 (relating to dyed diesel fuel), a tax" is removed and
"Tax" is added in its place.
6. In paragraph (f)(1), the language "Except as provided in
paragraph (f)(2) of this section and �48.4082-1 (relating to dyed
diesel fuel), a tax" is removed and "Tax" is added in its place.
7. Paragraph (i) is revised.
8. Paragraph (j) is added.
The revision and addition read as follows: �48.4081-3 Taxable fuel;
taxable events other than removal at the terminal rack.
* * * * *
(i) Exemptions. For exemptions from the taxes imposed under this
section, see ��48.4081-4 (relating to gasoline blendstocks),
48.4082-1 (relating to dyed diesel fuel and dyed kerosene),
48.4082-5 (relating to diesel fuel and kerosene used in Alaska),
48.4082-6 (relating to aviation-grade kerosene), and 48.4082-7
(relating to kerosene used for a feedstock purpose).
(j) Effective date. This section is applicable January 1, 1994.
Par. 38. In �48.4081-6, paragraph (b)(3) is revised to read as
follows: �48.4081-6 Gasoline; gasohol.
* * * * *
(b) * * *
(3) Gasohol blender. Gasohol blender means any person that regularly
produces gasohol outside of the bulk transfer/terminal system for
sale or use in its trade or business.
* * * * *
�48.4081-7 [Amended ] Par. 39. Section 48.4081-7 is amended as
follows:
1. In paragraph (c)(2), First Taxpayer's Report, the following
language is removed:
"7. _________________________________ Location of IRS service center
where this report is filed"
2. In paragraph (c)(4)(v), the language "gasoline" is removed each
place it appears and "taxable fuel" is added in its place.
3. In paragraph (f) Example 1, the language "gasoline registrant" is
removed and "taxable fuel registrant" is added in its place in the
following locations:
a. Paragraph (i), first sentence.
b. Paragraph (i), second sentence.
c. Paragraph (ii), first sentence. Par. 40. In �48.4081-8, paragraph
(a) is revised to read as follows: �48.4081-8 Taxable fuel;
measurement.
(a) In general. Volumes of taxable fuel may be measured on the basis
of actual volumetric gallons or gallons adjusted to 60 degrees
Fahrenheit. However, beginning July 1, 2000, for each period from
July 1 through the following June 30--
(1) A person liable for the tax on removal may use only one of the
two bases of measurement with respect to all taxable fuel removed
during the period from any particular terminal, refinery, or
blending facility;
(2) A person liable for the tax on entry may use only one of the two
bases of measurement with respect to all taxable fuel entered into
the United States during the period at any particular point of
entry; and
(3) A person liable for the tax on sale may use only one of the two
bases of measurement with respect to all taxable fuel sold during
the period to any particular buyer.
* * * * * �48.4081-9 [Removed ] Par. 41. Section 48.4081-9 is
removed.
Par. 42. Section 48.4082-1 is amended as follows:
1. The section heading is revised.
2. In paragraph (a) introductory text, the language "or kerosene" is
added after "diesel fuel".
3. In paragraph (a)(3), the language "or kerosene" is added after
"diesel fuel".
4. In paragraph (b), the introductory text is revised.
5. In paragraph (b)(1), the language "or kerosene" is added after
"diesel fuel".
The revisions read as follows: �48.4082-1 Diesel fuel and kerosene;
exemption for dyed fuel.
* * * * *
(b) * * * Diesel fuel or kerosene satisfies the dyeing requirement
of this paragraph (b) only if the diesel fuel or kerosene contains--
* * * * *
Par. 43. Sections 48.4082-2 and 48.4082-3 are revised to read as
follows: �48.4082-2 Diesel fuel and kerosene; notice required for
dyed fuel.
(a) In general. A legible and conspicuous notice stating "DYED
DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE" must be
posted by a seller on any retail pump or other delivery facility
where it sells dyed diesel fuel for use by its buyer. A legible and
conspicuous notice stating "DYED KEROSENE, NONTAXABLE USE ONLY,
PENALTY FOR TAXABLE USE" must be posted by a seller on any retail
pump or other delivery facility where it sells dyed kerosene for use
by its buyer. Any seller that fails to post the required notice on
any retail pump or other delivery facility where it sells dyed fuel
is, for purposes of the penalty imposed by section 6715, presumed to
know that the fuel will not be used for a nontaxable use.
(b) Cross reference; terminal operators. For the requirement that
terminal operators provide a notice with respect to dyed fuel, see
�48.4101-1(h)(3) (relating to terms and conditions of registration
for terminal operators). (c) Effective date. This section is
applicable with respect to diesel fuel after December 31, 1993, and
with respect to kerosene after June 30, 1998.
�48.4082-3 Diesel fuel and kerosene; visual inspection devices.
[Reserved] Par. 44. Section 48.4082-4 is amended as follows:
1. The section heading is revised.
2. Paragraph (a)(1) is revised.
3. Paragraph (a)(2)(i) is amended by removing the language "or
boat".
4. Paragraphs (b) heading and (b)(1) are revised.
5. Paragraph (c) is amended by:
a. Removing paragraphs (c)(4) and (c)(10);
b. Redesignating paragraphs (c)(5), (c)(6), (c)(7), (c)(8), and (c)
(9) as paragraphs (c)(4), (c)(5), (c)(6), (c)(7), and (c)(8),
respectively.
c. Adding the language "or" at the end of newly designated paragraph
(c)(7).
d. Removing the language "highway; or" at the end of newly
designated paragraph (c)(8) and adding "highway." in its place.
6. Paragraph (d) is revised.
The revisions read as follows: �48.4082-4 Diesel fuel and kerosene;
back-up tax.
(a) Imposition of tax--(1) In general. Tax is imposed by section
4041 on the delivery into the fuel supply tank of the propulsion
engine of a diesel-powered highway vehicle (other than a diesel-
powered bus) of--
(i) Any diesel fuel or kerosene on which tax has not been imposed by
section 4081;
(ii) Any diesel fuel or kerosene for which a credit or payment has
been allowed under section 6427; or
(iii) Any liquid (other than taxable fuel) for use as fuel.
* * * * *
(b) Tax on diesel fuel and kerosene; buses and trains--(1) In
general. Tax is imposed by section 4041 on the delivery into the
fuel supply tank of the propulsion engine of a diesel-powered bus or
a diesel-powered train of--
(i) Any diesel fuel or kerosene on which tax has not been imposed by
section 4081;
(ii) Any diesel fuel or kerosene for which a credit or payment has
been allowed under section 6427; or
(iii) Any liquid (other than taxable fuel) for use as fuel.
* * * * * (d) Effective date. This section is applicable after
December 31, 1993, except that references to kerosene are applicable
after June 30, 1998.
Par. 45. Section 48.4082-5 is amended as follows:
1. The section heading is revised.
2. Paragraph (a) is amended by adding "or kerosene" after "diesel
fuel".
3. Paragraph (b), definition of Exempt area of Alaska, is amended by
removing the language "Clear" and adding "Clean" in its place.
4. Paragraphs (b), (c), (d), and (g) are amended by adding "or
kerosene" after "diesel fuel" in the following locations:
a. Paragraph (b), definition of Qualified dealer, paragraph (1).
b. Paragraph (c) introductory text.
c. Paragraph (c)(3).
d. Paragraph (d)(1) introductory text.
e. Paragraph (d)(2).
f. Paragraph (g).
5. Paragraph (h), first sentence, is revised.
The revisions read as follows: �48.4082-5 Diesel fuel and kerosene;
Alaska.
* * * * *
(h) Effective date. This section is applicable with respect to
diesel fuel removed or entered after December 31, 1996, and with
respect to kerosene removed or entered after June 30, 1998. * * *
Par. 46. Sections 48.4082-6 and 48.4082-7 are added to read as
follows: �48.4082-6 Kerosene; exemption for aviation-grade kerosene.
(a) Overview. This section prescribes the conditions under which tax
does not apply to the removal or entry of aviation-grade kerosene
that is destined for use as a fuel in an aircraft.
(b) Definition. For purposes of this section, aviation-grade
kerosene means kerosene-type jet fuel covered by ASTM specification
D 1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-
DTL-83133E (Grade JP-8). For availability of ASTM and military
specifications, see �48.4081-1(d).
(c) Exemption for certain removals and entries. Tax is not imposed
under �48.4081-2(b), 48.4081-3(b)(1)(ii), or 48.4081-3(c)(1)(ii) on
the removal or entry of aviation-grade kerosene if--
(1) The person otherwise liable for tax is a taxable fuel
registrant;
(2) In the case of a removal from a terminal, the terminal is an
approved terminal; and
(3)(i) The person otherwise liable for tax delivers the kerosene
into the fuel supply tank of an aircraft and this delivery is not in
connection with a sale; or
(ii) The kerosene is sold for use as a fuel in an aircraft and, at
the time of the sale, the person otherwise liable for tax has an
unexpired certificate (described in paragraph (e) of this section)
from the buyer and has no reason to believe any information in the
certificate is false.
(d) Certain later sales--(1) In general. Paragraph (c) of this
section does not apply with respect to kerosene that is sold as
described in paragraph (c)(3)(ii) of this section if there is a
later disqualifying sale of the kerosene. A later disqualifying sale
is any later sale other than a later sale--
(i) By a person that, at the time of the sale, has an unexpired
certificate (described in paragraph (e) of this section) from the
buyer and has no reason to believe that any information in the
certificate is false; or
(ii) In connection with the delivery of the kerosene into the fuel
supply tank of an aircraft. (2) Imposition of tax; liability for
tax. Notwithstanding ��48.4081-2 and 48.4081-3, in any case in which
paragraph (d)(1) of this section applies, tax is imposed with
respect to that kerosene at the time of the first later
disqualifying sale and the seller in that sale is liable for the
tax.
(3) Rate of tax. For the rate of tax, see section 4081.
(e) Certificate--(1) In general. The certificate described in this
paragraph (e) is a statement by a buyer that is signed under
penalties of perjury by a person with authority to bind the buyer,
is in substantially the same form as the model certificate provided
in paragraph (e)(3) of this section, and contains all information
necessary to complete the model certificate. A new certificate or
notice that the current certificate is invalid must be given if any
information in the current certificate changes. The certificate may
be included as part of any business records normally used to
document a sale. The certificate expires on the earliest of the
following dates:
(i) The date one year after the effective date of the certificate
(which may be no earlier than the date it is signed).
(ii) The date the buyer provides the seller a new certificate or
notice that the current certificate is invalid.
(iii) The date the Internal Revenue Service or the buyer notifies
the seller that the buyer's right to provide a certificate has been
withdrawn.
(2) Withdrawal of the right to provide a certificate. The Internal
Revenue Service may withdraw the right of a buyer of aviation-grade
kerosene to provide a certificate under this section if the buyer
uses the aviation-grade kerosene to which a certificate relates
other than as a fuel in an aircraft or sells the kerosene without
first obtaining a certificate from its buyer. The Internal Revenue
Service may notify any seller to whom the buyer has provided a
certificate that the buyer's right to provide a certificate has been
withdrawn.
(3) Model certificate.
CERTIFICATE OF PERSON BUYING AVIATION-GRADE KEROSENE FOR USE AS A
FUEL IN AN AIRCRAFT (To support tax-free removals and entries of
aviation-grade kerosene under section 4082 of the Internal Revenue
Code.) (Buyer) certifies the following under penalties of perjury:
Name of Buyer The aviation-grade kerosene to which this certificate
applies will be used by Buyer as a fuel in an aircraft or resold by
Buyer for that use.
This certificate applies to ______ percent of Buyer's purchases from
________________________ (name, address, and employer identification
number of seller) as follows (complete as applicable): 1. A single
purchase on invoice or delivery ticket number __________.
2. All purchases between __________ (effective date) and __________
(expiration date) (period not to exceed one year after the effective
date) under account or order number(s) __________. If this
certificate applies only to Buyer's purchases for certain locations,
check here _____ and list the locations.
____________________________________________________________________
_
____________________________________________________________________
_
____________________________________________________________________
_ Buyer is buying the kerosene for (check either or both as
applicable): Buyer's use as a fuel in an aircraft.
Resale for use as a fuel in an aircraft.
Buyer will provide a new certificate to the seller if any
information in this certificate changes.
If Buyer sells the aviation-grade kerosene to which this certificate
relates and does not deliver it into the fuel supply tank of an
aircraft, Buyer will be liable for tax unless Buyer obtains a
certificate from its buyer stating that the aviation-grade kerosene
will be used as a fuel in an aircraft.
If Buyer violates the terms of this certificate, the Internal
Revenue Service may withdraw Buyer's right to provide a certificate.
Buyer has not been notified by the Internal Revenue Service that its
right to provide a certificate has been withdrawn.
The fraudulent use of this certificate may subject Buyer and all
parties making any fraudulent use of this certificate to a fine or
imprisonment, or both, together with the costs of prosecution.
Printed or typed name of person signing Title of person signing
Employer identification number Address of Buyer Signature and date
signed (f) Effective date. This section is applicable after March
30, 2000, except that paragraph (d) of this section is applicable
after June 30, 2000.
�48.4082-7 Kerosene; exemption for feedstock purposes.
(a) Overview. This section prescribes the conditions under which tax
does not apply to the removal or entry of kerosene for use for a
feedstock purpose.
(b) Definitions. The following definitions apply to this section:
Feedstock purpose means the use of kerosene for nonfuel purposes in
the manufacture or production of any substance other than gasoline,
diesel fuel, or special fuels referred to in section 4041. Thus, for
example, kerosene is used for a feedstock purpose when it is used as
an ingredient in the production of paint and is not used for a
feedstock purpose when it is used to power machinery at a factory
where paint is produced.
Feedstock user means a person that uses kerosene for a feedstock
purpose.
Registered feedstock user means a feedstock user that is--
(1) Registered under section 4101 as a feedstock user; or
(2) With respect to removals and entries before October 1, 2000, a
taxable fuel registrant.
(c) Exemption for removals and entries. Tax is not imposed on the
removal or entry of kerosene if--
(1) The person otherwise liable for tax is a taxable fuel
registrant;
(2) In the case of a removal from a terminal, the terminal is an
approved terminal; and
(3)(i) The person otherwise liable for tax uses the kerosene for a
feedstock purpose; or
(ii) The kerosene is sold for use by the buyer for a feedstock
purpose and, at the time of the sale, the person otherwise liable
for tax has an unexpired certificate (described in paragraph (e) of
this section) from the buyer and has no reason to believe any
information in the certificate is false.
(d) Later sale--(1) In general. Paragraph (c) of this section does
not apply with respect to kerosene that is sold as described in
paragraph (c)(3)(ii) of this section if the buyer in that sale (the
certifying buyer) sells the kerosene.
(2) Imposition of tax; liability for tax. Notwithstanding
��48.4081-2 and 48.4081-3, in any case in which paragraph (d)(1) of
this section applies, tax with respect to that kerosene is imposed
at the time of the sale by the certifying buyer and the certifying
buyer is liable for the tax.
(3) Rate of tax. For the rate of tax, see section 4081. (e)
Certificate--(1) In general. The certificate described in this
paragraph (e) is a statement by a buyer that is signed under
penalties of perjury by a person with authority to bind the buyer,
is in substantially the same form as the model certificate provided
in paragraph (e)(2) of this section, and contains all information
necessary to complete the model certificate. A new certificate or
notice that the current certificate is invalid must be given if any
information in the current certificate changes. The certificate may
be included as part of any business records normally used to
document a sale. The certificate expires on the earliest of the
following dates:
(i) The date one year after the effective date of the certificate
(which may be no earlier than the date it is signed).
(ii) The date the buyer provides the seller a new certificate or
notice that the current certificate is invalid.
(iii) The date the seller is notified by the Internal Revenue
Service or the buyer that the buyer's registration has been revoked
or suspended.
(2) Model certificate.
CERTIFICATE OF REGISTERED FEEDSTOCK USER
(To support tax-free removals and entries of kerosene under section
4082 of the Internal Revenue Code.)
(Buyer) certifies the following under penalties of perjury:
Name of Buyer
Buyer is a registered feedstock user with registration number .
Buyer's registration has not been revoked or suspended.
The kerosene to which this certificate applies will be used by Buyer
for a feedstock purpose.
This certificate applies to _____ percent of Buyer's purchases from
________________________ (name, address, and employer identification
number of seller as follows (complete as applicable):
1. A single purchase on invoice or delivery ticket number
__________.
2. All purchases between __________ (effective date) and __________
(expiration date) (period not to exceed one year after the effective
date) under account or order number(s) __________. If this
certificate applies only to Buyer's purchases for certain locations,
check here _____ and list the locations.
____________________________________________________________________
_
____________________________________________________________________
_
____________________________________________________________________
_
If Buyer sells the kerosene to which this certificate relates, Buyer
will be liable for tax on that sale.
Buyer will provide a new certificate to the seller if any
information in this certificate changes.
If Buyer violates the terms of this certificate, the Internal
Revenue Service may revoke Buyer's registration.
Buyer understands that the fraudulent use of this certificate may
subject Buyer and all parties making any fraudulent use of this
certificate to a fine or imprisonment, or both, together with the
costs of prosecution.
Printed or typed name of person signing Title of person signing
Employer identification number Address of Buyer Signature and date
signed (f) Effective date. This section is applicable after March
30, 2000, except that paragraph (d) of this section is applicable
after June 30, 2000.
��48.4082-6T,48.4082-7T,48.4082-8T,48.4082-9T,and 48.4082-10T
[Removed ] Par. 47. Sections 48.4082-6T, 48.4082-7T, 48.4082-8T,
48.4082-9T, and 48.4082-10T are removed.
Par. 48. Section 48.4083-1 is amended as follows:
1. In paragraph (c)(2), first sentence, the language "vehicle,
train, or boat" is removed and "vehicle or train" is added in its
place.
2. Paragraph (d) is revised.
The revision reads as follows: �48.4083-1 Taxable fuel;
administrative authority.
* * * * *
(d) Refusal to submit to inspection. For the penalty for any refusal
to permit an entry or inspection authorized by this section, see
section 4083(c)(3). This penalty is in addition to any tax that may
be imposed by section 4041 or 4081 and any penalty that may be
imposed by section 6715.
* * * * *
�48.4091-3T [Redesignated as �48.4091-3 ]
�48.4091-3 [Amended ]
Par. 49. Section 48.4091-3T is redesignated as �48.4091-3 and the
language "(temporary)" is removed from the section heading.
Par. 50. Section 48.4101-1 is amended as follows:
1. The section heading is revised.
2. Paragraph (a)(1) is amended by removing the language "registered
ultimate vendors of diesel fuel" and adding "certain ultimate
vendors of diesel fuel and kerosene" in its place.
3. Paragraph (a)(2) is amended by adding a sentence to the end of
the paragraph.
4. Paragraph (a)(6) is added.
5. Paragraphs (b)(7), (b)(8), and (b)(9) are added.
6. Paragraph (c)(1) is revised.
7. Paragraph (d) is revised.
8. Paragraph (f)(1)(i) heading is revised.
9. Paragraph (f)(1)(ii) heading and introductory text are revised.
10. Paragraph (h)(1)(iii) is amended by removing the language "and
�48.4101-2".
11. Paragraph (h)(2)(iii) is revised.
12. Paragraph (h)(2)(iv) is added.
13. Paragraph (h)(3)(i) is revised.
14. Paragraph (h)(3)(ii) is amended by adding "or kerosene" after
"diesel fuel" in the heading and the introductory text.
15. Paragraph (h)(3)(v) is amended by adding "or kerosene" after
"diesel fuel" each place it appears.
16. Paragraphs (i)(2)(ii) and (i)(2)(iii) are amended by removing
the language "vendor" and adding "vendor or an ultimate vendor
(blocked pump)" in its place.
17. Paragraph (k) is amended by adding a sentence to the end of the
paragraph.
18. Paragraph (l)(2) is amended by adding the language ",except that
paragraphs (c)(1)(iii) and (c)(1)(vi) of this section are applicable
after March 31, 2001" after "January 1, 1995".
19. Paragraph (l)(4) is added.
The revisions and additions read as follows: �48.4101-1 Taxable
fuel; registration.
(a) * * *
(2) * * * However, the United States is treated as registered under
section 4101.
* * * * *
(6)(i) A person is treated as a taxable fuel registrant if on June
30, 1998, the person--
(A) Is an enterer, refiner, terminal operator, or throughputter with
respect to kerosene and is registered under section 4101 as a
producer or importer of aviation fuel;
(B) Operates one or more terminals that store kerosene (and no other
type of taxable fuel); or
(C) Is a commercial airline, an operator of aircraft in
noncommercial aviation, or a fixed base operator and is also a
position holder with respect to kerosene.
(ii) A person treated as registered under paragraph (a)(6)(i) of
this section is treated as registered from July 1, 1998, until the
earlier of--
(A) The date of a subsequent denial of an application for
registration under paragraph (g)(2) of this section;
(B) The effective date of a subsequent registration issued under
paragraph (g)(3) of this section;
(C) The effective date of a subsequent revocation or suspension of
registration under paragraph (i) of this section; or
(D) July 1, 1999.
(b) * * *
(7) Pipeline operator. A pipeline operator is any person that
operates a pipeline within the bulk transfer/terminal system.
(8) Vessel operator. A vessel operator is any person that operates a
vessel within the bulk transfer/terminal system. However, for
purposes of this definition, vessel does not include a deep draft
ocean-going vessel (as defined in �48.4042-3(a)).
(9) Other definitions. For other definitions relating to taxable
fuel, see ��48.4081-1, 48.4081-6(b), 48.4082-5(b), 48.4082-6(b),
48.4082-7(b), 48.6427-9(b), 48.6427-10(b), and 48.6427-11(b).
(c) * * * (1) In general. A person is required to be registered
under section 4101 if the person is-
(i) A blender;
(ii) An enterer;
(iii) A pipeline operator;
(iv) A position holder;
(v) A terminal operator; or
(vi) A vessel operator.
* * * * *
(d) Persons that may, but are not required to, be registered. A
person may, but is not required to, be registered under section 4101
if the person is--
(1) A feedstock user;
(2) A gasohol blender;
(3) An industrial user;
(4) A throughputter that is not a position holder;
(5) An ultimate vendor; or
(6) An ultimate vendor (blocked pump).
* * * * *
(f) * * * (1) * * * (i) Persons other than ultimate vendors,
pipeline operators, and vessel operators. * * *
* * * * *
(ii) Ultimate vendors, pipeline operators, and vessel operators. The
district director will register an applicant as an ultimate vendor,
ultimate vendor (blocked pump), pipeline operator, or vessel
operator only if the district director--
* * * * *
(h) * * *
(2) * * *
(iii) Make any false statement on, or violate the terms of, any
certificate given to another person to support an exemption from, or
a reduced rate of, the tax imposed by section 4081; or (iv) In the
case of an ultimate vendor (blocked pump), deliver kerosene (or
allow kerosene to be delivered) into the fuel supply tank of a
diesel-powered highway vehicle or diesel-powered train from a
blocked pump.
(3) * * * (i) Notice required with respect to dyed diesel fuel and
dyed kerosene. A legible and conspicuous notice stating "DYED DIESEL
FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE" must be
provided by each terminal operator to any person that receives dyed
diesel fuel at a terminal rack of that operator. A legible and
conspicuous notice stating "DYED KEROSENE, NONTAXABLE USE ONLY,
PENALTY FOR TAXABLE USE" must be provided by each terminal operator
to any person that receives dyed kerosene at a terminal rack of that
operator. These notices must be provided by the time of the removal
and must appear on all shipping papers, bills of lading, and similar
documents that are provided by the terminal operator to accompany
the removal of the fuel.
* * * * *
(k) * * * For rules relating to claims by registered ultimate
vendors (blocked pump), see �48.6427-10.
(l) * * *
(4) References in this section to kerosene are applicable after June
30, 1998.
Par. 51. Section 48.4101-2 is revised to read as follows: �48.4101-2
Information reporting.
(a) In general. Each information report under section 4101(d) must
be--
(1) Made in the form required by the Commissioner;
(2) Made for a period of one calendar month; and
(3) Filed by the last day of the first month following the month for
which the report is made, except that a report relating to any month
during 2000 must be filed by February 28, 2001.
(b) Effective date. This section is applicable after March 30,
2000 ��48.4102-2T and 48.4101-3T [Removed ] Par. 52. Sections
48.4102-2T and 48.4101-3T are removed.
�48.4221-1 [Amended ] Par. 53. In �48.4221-1, paragraph (a)(2)(ii)
is amended by removing the language "(gasoline and diesel fuel tax)"
and adding "(taxable fuel tax)" in its place.
�48.4222(b)-1 [Amended ] Par. 54. In �48.4222(b)-1, paragraph (c),
first sentence, is amended by removing the language "paragraph (f)"
and adding "paragraph (b)" in its place.
�48.6416(b)(2)-1 [Amended ] Par. 55. Section 48.6416(b)(2)-1 is
amended by removing the third sentence.
Par. 56. In �48.6416(b)(2)-2, paragraph (a) is revised to read as
follows: �48.6416(b)(2)-2 Exportations, uses, sales, and resales
included.
(a) In general. The tax paid under chapter 32 (or under section
4041(a) or (d) in respect of sales or under section 4051) with
respect to any article is considered to be an overpayment in the
case of any exportation, use, sale, or resale described in this
section. This section applies only in those cases in which the
exportation, use, sale, or resale (or any combination thereof)
referred to in this section occurs before any other use. In
addition, the following restrictions must be taken into account in
applying the regulations under section 6416(b)(2):
(1) Sections 6416(b)(2)(C) and (D) do not apply to any tax paid
under section 4064 (gas guzzler tax).
(2) Sections 6416(b)(2)(B), (C), and (D) do not apply to any tax
paid under section 4131 (vaccine tax) and section 6416(b)(2)(A)
applies only to the extent prescribed in paragraph (b)(2) of this
section.
(3) Section 6416(b)(2) does not apply to any tax paid under section
4041(a)(1) or 4081 on diesel fuel or kerosene, section 4091
(aviation fuel tax), or section 4121 (coal tax).
* * * * * �48.6420-7 [Removed ] Par. 57. Section 48.6420-7 is
removed.
�48.6420(c)-2 [Removed ] Par. 58. Section 48.6420(c)-2 is removed.
�48.6421-2 [Amended ] Par. 59. In �48.6421-2, paragraph (a) is
amended by removing the last sentence.
Par. 60. Section 48.6427-8 is amended as follows:
1. The section heading and paragraphs (a) and (b)(1) are revised.
2. Paragraph (b)(2) Example 1, paragraph (i) is amended as follows:
a. In the first and second sentences, the language "1996" is removed
and "2000" is added in its place.
b. In the fourth sentence, the language "�48.4081-1(h)" is removed
and "�48.4081-1(b)" is added in its place.
3. Paragraph (b)(2) Example 1, paragraph (ii) is amended by removing
the language "(b)(1)(vi)(C)" and adding "(b)(1)(vii)(C)" in its
place.
4. Paragraph (b)(2) Example 2, paragraph (i) is amended as follows:
a. In the first sentence, the language "1996" is removed and "2000"
is added in its place.
b. In the third sentence, the language "or diesel-powered boat" is
removed.
5. Paragraph (d) is amended as follows:
a. By removing from paragraph (d)(1) the language "covered by the
claim"
b. By revising paragraphs (d)(2) and (d)(3).
c. By adding the language "or kerosene" after "diesel fuel" in
paragraphs (d)(4) and (d)(5).
6. Paragraph (f) is revised.
The revisions read as follows: �48.6427-8 Diesel fuel and kerosene;
claims by ultimate purchasers.
(a) Overview. This section provides rules under which ultimate
purchasers of taxed diesel fuel and kerosene may claim the income
tax credits or payments allowed by section 6427(l). Generally, these
claims relate to diesel fuel and kerosene used in nontaxable uses.
Claims relating to diesel fuel and kerosene sold for use on a farm
for farming purposes and by a State are made by registered ultimate
vendors under �48.6427-9; claims relating to kerosene sold from a
blocked pump are made by registered ultimate vendors (blocked pump)
under �48.6427-10; and claims relating to kerosene sold during
certain periods of extreme cold for blending with diesel fuel to be
used for heating purposes are made by registered ultimate vendors
(blending) under �48.6427-11.
(b) Conditions to allowance of credit or payment--(1) In general.
Except as provided in section 6427(l)(5), a claim for an income tax
credit or payment with respect to diesel fuel or kerosene is allowed
under section 6427(l) only if--
(i) Tax was imposed by section 4081 on the diesel fuel or kerosene
to which the claim relates;
(ii) The claimant produced or bought the diesel fuel or kerosene and
did not sell it in the United States;
(iii) The claimant has filed a timely claim for a credit or payment
that contains the information required under paragraph (d) of this
section;
(iv) The diesel fuel or kerosene was not bought under a certificate
described in �48.6427-9(e)(2) (relating to Certificate of Farming
Use or State Use);
(v) The diesel fuel or kerosene was not used on a farm for farming
purposes (as defined in �48.6420-4) or by a State;
(vi) With respect to kerosene, the kerosene was not sold from a
blocked pump or sold for blending with diesel fuel under the
conditions described in �48.6427-11; and
(vii) The diesel fuel or kerosene was either--
(A) Used in a use described in �48.4082-4(c)(3) through (c)(8);
(B) Exported;
(C) Used other than as a fuel in a propulsion engine of a diesel-
powered highway vehicle; or
(D) Used as a fuel in the propulsion engine of a diesel-powered bus
if the bus was engaged in a use described in section 6427(b)(1)
(after the application of section 6427(b)(3)).
* * * * *
(d) * * *
(2) A statement by the claimant that--
(i) The diesel fuel or kerosene did not contain visible evidence of
dye; or
(ii) In the case of diesel fuel or kerosene that contains visible
evidence of dye, explains the circumstances under which tax was
imposed on that fuel.
(3) The use made of the diesel fuel or kerosene covered by the claim
described by reference to specific categories listed in paragraph
(b)(1)(vii) of this section (such as use in a qualified local bus or
the exclusive use of a nonprofit educational organization).
* * * * * (f) Effective date. This section is applicable with
respect to diesel fuel after December 31, 1993, except for paragraph
(b)(1)(iv) of this section, which is applicable to diesel fuel
bought by ultimate purchasers after June 30, 1994. This section is
applicable with respect to kerosene after June 30, 1998.
Par. 61. Section 48.6427-9 is amended as follows:
1. The section heading and paragraph (a) are revised.
2. Paragraph (b) is amended by:
a. Adding the language "or undyed kerosene" after "diesel fuel" in
the introductory text.
b. Revising paragraph (b)(2).
3. Paragraph (c) is amended by revising the introductory text,
paragraph (c)(1), and paragraph (c)(2) introductory text.
4. Paragraph (e) is amended by adding "or kerosene" after "diesel
fuel" in the following locations:
a. Paragraph (e)(1) introductory text.
b. Paragraph (e)(1)(iv).
c. Paragraph (e)(1)(v)(A).
5. Paragraphs (e)(1)(i) and (e)(1)(ii) are revised.
6. Paragraph (e)(1)(vi) is amended by removing the language "For
claims relating to sales by the claimant after March 31, 1994, a
statement" and adding "A statement" in its place.
7. Paragraph (e)(1)(vii) is removed.
8. Paragraph (e)(2)(ii), Certificate of Farming Use or State Use, is
amended by adding or "or kerosene" after "diesel fuel" in each place
it appears: 9. Paragraph (g) is revised.
The revisions read as follows: �48.6427-9 Diesel fuel and kerosene;
claims by registered ultimate vendors (farming and State use).
(a) Overview. This section provides rules under which certain
registered ultimate vendors of taxed diesel fuel and kerosene may
claim the income tax credits or payments allowed by section 6427(l)
(5)(A). These claims relate to diesel fuel and kerosene sold for use
on a farm for farming purposes and by a State. Claims relating
to diesel fuel and kerosene used for other nontaxable purposes are
made by ultimate purchasers under �48.6427-8; claims relating to
kerosene sold from a blocked pump are made by registered ultimate
vendors (blocked pump) under �48.6427-10; and claims relating to
kerosene sold during certain periods of extreme cold for blending
with diesel fuel to be used for heating purposes are made by
registered ultimate vendors (blending) under �48.6427-11.
(b) * * *
(2) A registered ultimate vendor is an ultimate vendor that is
registered under section 4101 as an ultimate vendor.
(c) * * * A claim for an income tax credit or payment with respect
to diesel fuel or kerosene is allowed by section 6427(l)(5)(A) only
if-
(1) Tax was imposed by section 4081 on the diesel fuel or kerosene
to which the claim relates;
(2) The claimant sold the diesel fuel or kerosene to--
* * * * *
(e) * * *(1) * * *
(i) The total number of gallons.
(ii) A statement by the claimant that--
(A) The diesel fuel or kerosene did not contain visible evidence of
dye; or
(B) In the case of diesel fuel or kerosene that contains visible
evidence of dye, explains the circumstances under which tax was
imposed on that fuel.
* * * * * (g) Effective date. This section is applicable with
respect to diesel fuel after December 31, 1993, and with respect to
kerosene after June 30, 1998.
Par. 62. Sections 48.6427-10 and 48.6427-11 are added to read as
follows: �48.6427-10 Kerosene; claims by registered ultimate vendors
(blocked pumps).
(a) Overview. This section provides rules under which certain
registered ultimate vendors of taxed kerosene may claim the income
tax credits or payments allowed by section 6427(l)(5)(B)(i). These
claims relate to kerosene sold from a blocked pump. Claims relating
to kerosene sold for use on a farm for farming purposes and by a
State are made by registered ultimate vendors under �48.6427-9;
claims relating to kerosene sold during certain periods of extreme
cold for blending with diesel fuel to be used for heating purposes
are made by registered ultimate vendors (blending) under
�48.6427-11; and claims relating to kerosene used for nontaxable
purposes are made by ultimate purchasers under �48.6427-8.
(b) Definitions. The following definitions apply to this section:
(1) A blocked pump is a fuel pump that--
(i) Is used to dispense undyed kerosene that is sold at retail for
use by the buyer in any nontaxable use;
(ii) Is at a fixed location;
(iii) Is identified with a legible and conspicuous notice stating
"UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY"; and
(iv)(A) Cannot reasonably be used to dispense fuel directly into the
fuel supply tank of a diesel-powered highway vehicle or diesel-
powered train (because, for example, of its distance from a
road surface or train track or the length of its delivery hose); or
(B) Is locked by the vendor after each sale and unlocked by the
vendor only in response to a request by a buyer for undyed kerosene
for use other than as a fuel in a diesel-powered highway vehicle or
diesel-powered train.
(2) A registered ultimate vendor (blocked pump) is a person that is
registered under section 4101 as an ultimate vendor (blocked pump).
(3) An ultimate vendor (blocked pump) is a person that sells undyed
kerosene from a blocked pump.
(c) Conditions to allowance of credit or payment. A claim for an
income tax credit or payment with respect to undyed kerosene is
allowed by section 6427(l)(5)(B)(i) only if--
(1) Tax was imposed by section 4081 on the kerosene to which the
claim relates;
(2) The claimant sold the kerosene from a blocked pump for its
buyer's use other than as a fuel in a diesel-powered highway vehicle
or diesel-powered train and the claimant has no reason to believe
that the kerosene will not be so used;
(3) The claimant is a registered ultimate vendor (blocked pump);
(4) With respect to each sale of more than five gallons of kerosene
from a blocked pump that does not meet the conditions of paragraph
(b)(1)(iv)(A) of this section, the claimant has in its possession
the date of the sale, name and address of the buyer, and the
number of gallons sold to the buyer; and
(5) The claimant has filed a timely claim for a credit or payment
that contains the information required under paragraph (e) of this
section.
(d) Form of claim. Each claim for an income tax credit under this
section must be made on Form 4136 (or such other form as the
Commissioner may designate) in accordance with the instructions for
that form. Each claim for a payment under this section must be made
on Form 8849 (or such other form as the Commissioner may designate)
in accordance with the instructions for that form.
(e) Content of claim. Each claim for a credit or payment under this
section must contain the following information with respect to all
of the kerosene covered by the claim:
(1) The claimant's ultimate vendor (blocked pump) registration
number.
(2) The total number of gallons.
(3) A statement by the claimant that--
(i) The kerosene did not contain visible evidence of dye; or
(ii) In the case of kerosene that contains visible evidence of dye,
explains the circumstances under which tax was imposed on that
kerosene.
(4) With respect to each sale of more than five gallons of kerosene
from a blocked pump that does not meet the conditions of paragraph
(b)(1)(iv)(A) of this section, a statement by the claimant that it
has in its possession the date of the sale, name and address of the
buyer, and the number of gallons sold to the buyer.
(5) A statement by the claimant that it--
(i) Has not included the amount of the tax in its sales price of the
kerosene and has not collected the amount of the tax from its buyer;
(ii) Has repaid the amount of the tax to its buyer; or
(iii) Has obtained the written consent of its buyer to the allowance
of the claim.
(f) Time and place for filing claim. For rules relating to the time
for filing a claim under section 6427, see section 6427(i). A claim
under this section is not filed unless it contains all the
information required by paragraph (e) of this section and is filed
at the place required by the form.
(g) Cross reference. For a rule prohibiting a registered ultimate
vendor (blocked pump) from delivering kerosene from a blocked pump
into the fuel supply tank of a diesel-powered highway vehicle or
diesel-powered train, see �48.4101-1(h)(2)(iv).
(h) Effective date. This section is applicable after March 30, 2000.
�48.6427-11 Kerosene; claims by registered ultimate vendors
(blending).
(a) Overview. This section provides rules under which certain
registered ultimate vendors of taxed kerosene may claim the income
tax credits or payments allowed by section 6427(l)(5)(B)(ii). These
claims relate to kerosene sold during certain periods of extreme
cold for blending with diesel fuel to be used for heating purposes.
Claims relating to kerosene sold for use on a farm for farming
purposes and by a State are made by registered ultimate vendors
under �48.6427-9; claims relating to kerosene sold from a blocked
pump for nontaxable uses are made by registered ultimate vendors
(blocked pump) under �48.6427-10; and other claims relating to
kerosene used for nontaxable purposes are made by ultimate
purchasers under �48.6427-8.
(b) Definitions. The following definitions apply to this section:
(1) A declaration of extreme cold is a declaration by the
Commissioner that a specific geographic area (such as a state or a
county within a state) is affected by extremely or unseasonably cold
weather conditions. A declaration will be in effect during the
period determined by the Commissioner.
(2) A cold weather blend is a blend of kerosene and diesel fuel that
is produced in an area described in a declaration of extreme cold
and that is sold for use or used for heating purposes.
(3) A registered ultimate vendor (blending) is a taxable fuel
registrant, a registered ultimate vendor, or a registered ultimate
vendor (blocked pump).
(c) Conditions to allowance of credit or payment. A claim for an
income tax credit or payment with respect to kerosene is allowed by
section 6427(l)(5)(B)(ii) only if--
(1) Tax was imposed by section 4081 on the kerosene to which the
claim relates;
(2) The claimant sold the kerosene in an area described in a
declaration of extreme cold for the production of a cold weather
blend;
(3) The claimant is a registered ultimate vendor (blending); and
(4) The claimant has filed a timely claim for an income tax credit
or payment that contains the information required under paragraph
(e) of this section.
(d) Form of claim. Each claim for an income tax credit under this
section must be made on Form 4136 (or such other form as the
Commissioner may designate) in accordance with the instructions for
that form. Each claim for a payment under this section must be made
on Form 8849 (or such other form as the Commissioner may designate)
in accordance with the instructions for that form.
(e) Content of claim--(1) In general. Each claim for credit or
payment under this section must contain the following information
with respect to all of the kerosene covered by the claim:
(i) The claimant's registration number.
(ii) The total number of gallons.
(iii) A statement by the claimant that--
(A) The kerosene did not contain visible evidence of dye; or
(B) In the case of kerosene that contains visible evidence of dye,
explains the circumstances under which tax was imposed on that
kerosene.
(iv) A statement by the claimant that it--
(A) Has not included the amount of the tax in its sales price of the
kerosene and has not collected the amount of the tax from its buyer;
(B) Has repaid the amount of the tax to its buyer; or
(C) Has obtained the written consent of its buyer to the allowance
of the claim.
(v) A statement that the claimant has in its possession an unexpired
certificate described in paragraph (e)(2) of this section and the
claimant has no reason to believe any information in the certificate
is false.
(2) Certificate--(i) In general. The certificate described in this
paragraph (e) is a statement by a buyer that is signed under
penalties of perjury by a person with authority to bind the buyer,
is in substantially the same form as the model certificate provided
in paragraph (e)(2)(iii) of this section, and contains all
information necessary to complete the model certificate. A
certificate must be given for each purchase of kerosene. The
certificate may be included as part of any business records normally
used to document a sale.
(ii) Withdrawal of the right to provide a certificate. The Internal
Revenue Service may withdraw the right of a buyer of kerosene to
provide a certificate under this section if the buyer uses the
kerosene to which a certificate relates other than for producing a
cold weather blend. The Internal Revenue Service may notify any
seller to whom the buyer has provided a certificate that the buyer's
right to provide a certificate has been withdrawn.
(iii) Model certificate.
CERTIFICATE OF BUYER FOR PRODUCTION OF A COLD WEATHER BLEND
(To support vendor's claim for a credit or payment under section
6427 of the Internal Revenue Code.)
(Buyer) certifies the following under penalties of perjury:
Name of Buyer
The kerosene to which this certificate applies will be used by Buyer
to produce a blend of kerosene and diesel fuel in an area described
in a declaration of extreme cold and the blend will be sold for use
or used for heating purposes.
This certificate applies to _____ percent of Buyer's purchases from
_______________________________ (name, address, and employer
identification number of seller) as follows (complete as
applicable): 1. A single purchase on invoice or delivery ticket
number __________.
2. All purchases between __________ (effective date) and __________
(expiration date) (period not to exceed one year after the effective
date) under account or order number(s) __________. If this
certificate applies only to Buyer's purchases for certain locations,
check here _____ and list the locations.
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
If Buyer violates the terms of this certificate, the Internal
Revenue Service may withdraw Buyer's right to provide a certificate.
Buyer has not been notified by the Internal Revenue Service that its
right to provide a certificate has been withdrawn.
Buyer understands that the fraudulent use of this certificate may
subject Buyer and all parties making such fraudulent use of this
certificate to a fine or imprisonment, or both, together with the
costs of prosecution.
Printed or typed name of person signing
Title of person signing
Name of Buyer
Employer identification number
Address of Buyer
Signature and date signed
(f) Time and place for filing claim. For rules relating to the time
for filing a claim under section 6427, see section 6427(i). A claim
under this section is not filed unless it contains all the
information required by paragraph (e) of this section and is filed
at the place required by the form.
(g) Effective date. This section is applicable after March 30, 2000.
��48.6427-10T and 48.6427-11T [Removed ] Par. 63. Sections
48.6427-10T and 48.6427-11T are removed.
�48.6715-1 [Amended ] Par. 64. Section 48.6715-1 is amended as
follows:
1. The section heading is amended by removing the language "diesel".
2. Paragraph (a) is amended by adding "or kerosene" after "diesel
fuel" in the following locations:
a. Paragraph (a)(1).
b. Paragraph (a)(2), each place it appears.
c. Paragraph (a)(4), each place it appears.
3. Paragraph (a)(4) is amended by removing the language "�48.6427-
8(b)(vi)(C), (D), or (E)" and adding "�48.6427-8(b)(1)(vii)(C) or
(D)" in its place.
PART 145-TEMPORARY EXCISE TAX REGULATIONS UNDER THE HIGHWAY REVENUE
ACT OF 1982 (PUB. L. 97-424)
Par. 65. The authority citation for part 145 continues to read in
part as follows: Authority: 26 U.S.C. 7805 * * *
�145.4051-1 [Amended ] Par. 66. In �145.4051-1, paragraph (f), the
first sentence is removed.
Par. 67. Section 145.4052-1 is amended as follows:
1. Paragraph (a)(2)(ii) is revised.
2. Paragraph (a)(7) is removed.
The revision reads as follows: �145.4052-1 Special rules and
definitions.
(a) * * *
(2) * * *
(ii) [Reserved]. For sales after June 30, 1998, see �48.4052-1 of
this chapter,
* * * * *
PART 602-OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT
Par. 68. The authority citation for part 602 continues to read as
follows: Authority: 26 U.S.C. 7805.
Par. 69. In �602.101, paragraph (b) is amended by: 1. Removing the
following entries from the table:
41.4481-1T
41.4482(b)-1T
48.4081-2(c)(3)
48.4081-3(d)(2)(ii)
48.4081-3(e)(2)(ii)
48.4081-3(f)(2)(ii)
48.4081-9
48.4082-7T
48.4082-8T
48.4091-3T
48.4101-2T
48.4101-3T
48.6420(c)-2
48.6420-7
48.6427-11T
2. Revising the entries for 48.4081-7 and 145.4052-1 and adding
entries in numerical order to the table to read as follows: �602.101
OMB Control numbers.
* * * * *
(b) * * *
CFR part or section where Current OMB identified and described
control No.
* * * * *
48.4052-1................................................ 1545-1418
* * * * *
48.4081-2.................................................1545-1270
1545-1418
48.4081-3.................................................1545-1270
1545-1418
* * * * *
48.4081-7.................................................1545-1270
1545-1418
* * * * *
48.4082-6.................................................1545-1418
48.4082-7.................................................1545-1418
48.4091-3.................................................1545-1418
* * * * *
48.6427-10............................................... 1545-1418
48.6427-11............................................... 1545-1418
* * * * *
145.4052-1.............................................. 1545-0120
1545-0745
1545-1076
* * * * *
Robert E. Wenzel
Deputy Commissioner of Internal Revenue
Approved: 3/15/00
Jonathan Talisman
Acting Assistant Secretary of the Treasury
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