New ultimate purchaser rule for claims for kerosene sold after September 20, 2005.   If you are an ultimate purchaser of kerosene sold after September 30, 2005, you may claim a credit or payment for kerosene used for a nontaxable use in noncommercial aviation (such as use on a farm for farming purposes, in aircraft engaged in foreign trade, in certain helicopters and fixed-wing air ambulances, or in military aircraft). However, you instead may waive the right to claim this credit or payment to the ultimate vendor.

  This rule does not apply to purchases for nonexempt, noncommercial aviation or for the exclusive use by a state, political subdivision of a state, or the District of Columbia. You are not eligible to make this claim for the period after September 30, 2005, and before December 20, 2006, if the ultimate vendor did not include the tax in the price of the kerosene and has not collected the tax from you, has repaid the tax to you, or has your written consent waiving the right to make this claim.

Claims for purchases during tax years beginning in 2005.   For purchases during your tax year beginning in 2005, amend your 2005 federal income tax return by attaching the 2005 Form 4136 to Form 1040X, Amended U.S. Individual Income Tax Return; Form 1120X, Amended U.S. Corporation Income Tax Return; or the applicable form used to amend your income tax return. Make your claim on line 14b of the 2005 Form 4136. Although line 14b is normally used by registered ultimate vendors, use this line as an ultimate purchaser; you do not need a registration number. Write “Ultimate purchaser” in the space on line 14b. Figure your credit using lines 4 and 5 of the worksheet in the instructions for line 14b. Generally, these claims must be filed within 3 years of the date you filed the original return or within 2 years after the date you paid the tax, whichever is later.

Claims for purchases during tax years beginning in 2006.   For purchases made during your tax year beginning in 2006, use line 9 on the 2006 Form 4136 to make this claim. If you meet the claim requirements, you instead may use lines 5c and 5d on Schedule 1 (Form 8849), Nontaxable Use of Fuels.

Special rule for claims for kerosene used in aviation on a farm and sold after December 31, 2004, and before October 1, 2005.   If you are an ultimate purchaser of kerosene sold after December 31, 2004, and before October 1, 2005, you may make a claim for nontaxable use of kerosene in aviation on a farm for farming purposes. This rule does not apply if the ultimate vendor did not include the tax in the price of the kerosene and has not collected the tax from you, has repaid the tax to you, or has your written consent to make this claim.

  You can make this claim on Schedule 6 (Form 8849), Other Claims. The credit rate per gallon of kerosene is $.219. Use credit reference number (CRN) 369. In the explanation section of the form, show the computation for the amount of the claim (for example, 250 gallons × $.219 = $54.75). You must file this claim no later than March 19, 2007.

For amounts paid during 2006, the tax on the use of international air travel facilities will be $14.50 per person for flights that begin or end in the United States, or $7.30 per person for domestic segments that begin or end in Alaska or Hawaii (applies only to departures). For amounts paid for each domestic segment of taxable transportation of persons by air, the domestic segment tax is $3.30 per segment for transportation that begins in 2006.

The tax on arrow shafts has increased to $.40 per arrow shaft.

Renewable diesel will generally be treated the same as biodiesel for credit purposes. The renewable diesel mixture credit is $1.00 per gallon of renewable diesel.

A reduced rate of tax on a diesel-water fuel emulsion applies if certain conditions are met. IRS No. 104 has been added to Form 720. Claims can be made for nontaxable uses of a diesel-water fuel emulsion and for diesel fuel used to produce a diesel-water fuel emulsion.

Three new IRS numbers have been added to report taxable tires instead of IRS No. 66.

Claims for gasoline, undyed diesel fuel, and undyed kerosene used exclusively by a state or local government or nonprofit educational organization can be made by the registered credit card issuer if the fuel was purchased with a credit card issued to the state or local government or nonprofit educational organization. Other conditions must be met.

The oil spill liability taxes (IRS Nos. 18 and 21) have been reinstated beginning April 1, 2006.

After July 31, 2006, collectors stopped collecting and paying over the tax on nontaxable service. See Publication 510 for the definition of nontaxable service. Information on the credit and refund procedures for collectors is described in Publication 510. For more information, see Notice 2006-50 and Notice 2007-11. You find notice 2006-50 on page 1141 of Internal Revenue Bulletin 2006-25 at
www.irs.gov/pub/irs-irbs/irb06-25.pdf, and Notice 2007-11 on page 405 of Internal Revenue Bulletin 2007-5 at
www.irs.gov/pub/irs-irbs/irb07-05.pdf.

There is a tax on the sale for use or use of any liquid sold for use or used as a fuel in a motor vehicle or motorboat, other than gas oil, fuel oil, or any product taxable under Internal Revenue Code section 4081. You may be liable for tax on alternative fuel delivered into the fuel supply tank of a motor vehicle or motorboat, or on certain bulk sales.

Two new credits are available: the alternative fuel credit and alternative fuel mixture credit. For more information on these credits, see Publication 510.

For amounts paid during 2007, the tax on use of international air travel facilities will be $15.10 per person for flights that begin or end in the United States, or $7.50 per person for domestic segments that begin or end in Alaska or Hawaii (applies only to departures). For amounts paid for each domestic segment of taxable transportation of persons by air, the domestic segment tax is $3.40 per segment for transportation that begins in 2007.

The tax on arrow shafts (IRS No. 106) is $.42 per arrow shaft.

The tax rate on dyed diesel fuel used in trains is $.001. The claim rate for undyed diesel fuel used in trains is $.243.

The inland waterways fuel use tax is $.201.

Meningococcal and human papillomavirus vaccines are taxable for sales or uses after January 31, 2007.

Qualified blood collector organizations are exempt from many federal excise taxes (or a credit or payment relating to the tax is available). These taxes include the tax on fuels, tires, communication services, and for heavy vehicles. Each blood collector organization must be registered by the IRS as a condition for applying for exemption (or credit or payments). To apply for registration, see Form 637, Application for Registration (For Certain Excise Tax Activities).