Fuels Used in Off-Highway Business Use

You may be eligible to claim a credit or refund for the excise tax on fuel used in an off-highway business use.

Off-highway business use. This is any use of fuel in a trade or business or in an income-producing activity. The use must not be in a highway vehicle registered or required to be registered for use on public highways. Off-highway business use generally does not include any use in a motorboat.

Note. If undyed diesel fuel or undyed kerosene is used on a farm for farming purposes (discussed earlier), the fuel is not used in an off-highway business use. Farmers cannot claim a credit or refund for the tax on diesel fuel or kerosene used on a farm for farming purposes. See How To Buy Diesel Fuel and Kerosene Tax Free, earlier.

Farmers also cannot claim a credit or refund for the tax on undyed kerosene used in an off-highway business use if the kerosene was sold from a blocked pump or for blending with diesel fuel in an area described in an IRS declaration of extreme cold if the blended fuel is used for heating purposes. Only the registered ultimate vendor that sold the kerosene can claim the credit or refund under these circumstances. For more information, see Publication 378.

Examples. Off-highway business use includes the use of fuels in any of the following ways.

• In stationary machines such as generators, compressors, power saws, and similar equipment.
• For cleaning purposes.
• In forklift trucks, bulldozers, and earthmovers.
• In vehicles engaged in construction, mining, or timbering activities if the vehicles are neither registered nor required to be registered.

Generally, it does not include nonbusiness, off-highway use of fuel, such as use by minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment.

For more information about the credit or refund for fuels used in an off-highway business use, see Publication 378.

Table 18-3

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