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Irs Gov 1040x

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Irs Gov 1040x

Irs gov 1040x 1. Irs gov 1040x   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Irs gov 1040x Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. Irs gov 1040x Reseller statement. Irs gov 1040x Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Irs gov 1040x Deep-draft ocean-going vessels. Irs gov 1040x Passenger vessels. Irs gov 1040x Ocean-going barges. Irs gov 1040x State or local governments. Irs gov 1040x Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel Definitions Excise taxes are imposed on all the following fuels. Irs gov 1040x Gasoline, including aviation gasoline and gasoline blendstocks. Irs gov 1040x Diesel fuel, including dyed diesel fuel. Irs gov 1040x Diesel-water fuel emulsion. Irs gov 1040x Kerosene, including dyed kerosene and kerosene used in aviation. Irs gov 1040x Other Fuels (including alternative fuels). Irs gov 1040x Compressed natural gas (CNG). Irs gov 1040x Fuels used in commercial transportation on inland waterways. Irs gov 1040x Any liquid used in a fractional ownership program aircraft as fuel. Irs gov 1040x The following terms are used throughout the discussion of fuel taxes. Irs gov 1040x Other terms are defined in the discussion of the specific fuels to which they pertain. Irs gov 1040x Agri-biodiesel. Irs gov 1040x   Agri-biodiesel means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats. Irs gov 1040x Approved terminal or refinery. Irs gov 1040x   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Irs gov 1040x Biodiesel. Irs gov 1040x   Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under section 211 of the Clean Air Act, and the requirements of the American Society of Testing Materials (ASTM) D6751. Irs gov 1040x Blended taxable fuel. Irs gov 1040x   This means any taxable fuel produced outside the bulk transfer/terminal system by mixing taxable fuel on which excise tax has been imposed and any other liquid on which excise tax has not been imposed. Irs gov 1040x This does not include a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which the tax has not been imposed. Irs gov 1040x Blender. Irs gov 1040x   This is the person that produces blended taxable fuel. Irs gov 1040x Bulk transfer. Irs gov 1040x   This is the transfer of taxable fuel by pipeline or vessel. Irs gov 1040x Bulk transfer/terminal system. Irs gov 1040x   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Irs gov 1040x Fuel in the supply tank of any engine, or in any tank car, railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system. Irs gov 1040x Cellulosic biofuel. Irs gov 1040x   Cellulosic biofuel means any liquid fuel produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act. Irs gov 1040x Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Irs gov 1040x For fuels sold or used after December 31, 2009, cellulosic biofuel does not include fuel of which more than 4% (determined by weight) is any combination of water and sediment, fuel of which the ash content is more than 1%, or fuel that has an acid number greater than 25. Irs gov 1040x Also see Second generation biofuel below. Irs gov 1040x Diesel-water fuel emulsion. Irs gov 1040x   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Irs gov 1040x The emulsion additive used to produce the fuel must be registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Irs gov 1040x Dry lease aircraft exchange. Irs gov 1040x   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Irs gov 1040x Enterer. Irs gov 1040x   This is the importer of record (under customs law) for the taxable fuel. Irs gov 1040x However, if the importer of record is acting as an agent, such as a customs broker, the person for whom the agent is acting is the enterer. Irs gov 1040x If there is no importer of record, the owner at the time of entry into the United States is the enterer. Irs gov 1040x Entry. Irs gov 1040x   Taxable fuel is entered into the United States when it is brought into the United States and applicable customs law requires that it be entered for consumption, use, or warehousing. Irs gov 1040x This does not apply to fuel brought into Puerto Rico (which is part of the U. Irs gov 1040x S. Irs gov 1040x customs territory), but does apply to fuel brought into the United States from Puerto Rico. Irs gov 1040x Fractional ownership aircraft program and fractional program aircraft. Irs gov 1040x   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Irs gov 1040x Measurement of taxable fuel. Irs gov 1040x   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Irs gov 1040x Other fuels. Irs gov 1040x   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Irs gov 1040x Pipeline operator. Irs gov 1040x   This is the person that operates a pipeline within the bulk transfer/terminal system. Irs gov 1040x Position holder. Irs gov 1040x   This is the person that holds the inventory position in the taxable fuel in the terminal, as reflected in the records of the terminal operator. Irs gov 1040x You hold the inventory position when you have a contractual agreement with the terminal operator for the use of the storage facilities and terminaling services for the taxable fuel. Irs gov 1040x A terminal operator that owns taxable fuel in its terminal is a position holder. Irs gov 1040x Rack. Irs gov 1040x   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Irs gov 1040x Refiner. Irs gov 1040x   This is any person that owns, operates, or otherwise controls a refinery. Irs gov 1040x Refinery. Irs gov 1040x   This is a facility used to produce taxable fuel and from which taxable fuel may be removed by pipeline, by vessel, or at a rack. Irs gov 1040x However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Irs gov 1040x For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Irs gov 1040x Registrant. Irs gov 1040x   This is a taxable fuel registrant (see Registration Requirements, later). Irs gov 1040x Removal. Irs gov 1040x   This is any physical transfer of taxable fuel. Irs gov 1040x It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Irs gov 1040x However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Irs gov 1040x Renewable diesel. Irs gov 1040x   See Renewable Diesel Credits in chapter 2. Irs gov 1040x Sale. Irs gov 1040x   For taxable fuel not in a terminal, this is the transfer of title to, or substantial incidents of ownership in, taxable fuel to the buyer for money, services, or other property. Irs gov 1040x For taxable fuel in a terminal, this is the transfer of the inventory position if the transferee becomes the position holder for that taxable fuel. Irs gov 1040x Second generation biofuel. Irs gov 1040x   This is any liquid fuel derived by, or from, qualified feedstocks, and meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U. Irs gov 1040x S. Irs gov 1040x C. Irs gov 1040x 7545). Irs gov 1040x It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Irs gov 1040x It is not alcohol of less than 150 proof (disregard any added denaturants). Irs gov 1040x See Form 6478 for more information. Irs gov 1040x State. Irs gov 1040x   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Irs gov 1040x An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Irs gov 1040x Taxable fuel. Irs gov 1040x   This means gasoline, diesel fuel, and kerosene. Irs gov 1040x Terminal. Irs gov 1040x   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Irs gov 1040x It does not include a facility at which gasoline blendstocks are used in the manufacture of products other than finished gasoline if no gasoline is removed from the facility. Irs gov 1040x A terminal does not include any facility where finished gasoline, diesel fuel, or kerosene is stored if the facility is operated by a registrant and all such taxable fuel stored at the facility has been previously taxed upon removal from a refinery or terminal. Irs gov 1040x Terminal operator. Irs gov 1040x   This is any person that owns, operates, or otherwise controls a terminal. Irs gov 1040x Throughputter. Irs gov 1040x   This is any person that is a position holder or that owns taxable fuel within the bulk transfer/terminal system (other than in a terminal). Irs gov 1040x Vessel operator. Irs gov 1040x   This is the person that operates a vessel within the bulk transfer/terminal system. Irs gov 1040x However, vessel does not include a deep draft ocean-going vessel. Irs gov 1040x Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Irs gov 1040x A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Irs gov 1040x For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Irs gov 1040x The returns are due the last day of the month following the month in which the transaction occurs. Irs gov 1040x Generally, these returns can be filed on paper or electronically. Irs gov 1040x For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Irs gov 1040x Publication 3536 is only available on the IRS website. Irs gov 1040x Form 720-TO. Irs gov 1040x   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Irs gov 1040x Each terminal operator must file a separate form for each approved terminal. Irs gov 1040x Form 720-CS. Irs gov 1040x   This information return must be filed by bulk transport carriers (barges, vessels, and pipelines) who receive liquid product from an approved terminal or deliver liquid product to an approved terminal. Irs gov 1040x Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Irs gov 1040x See Form 637 for other persons who must register and for more information about registration. Irs gov 1040x Persons that are required to be registered. Irs gov 1040x   You are required to be registered if you are a: Blender; Enterer; Pipeline operator; Position holder; Refiner; Terminal operator; Vessel operator; Producer or importer of alcohol, biodiesel, agri-biodiesel, and renewable diesel; or Producer of cellulosic or second generation biofuel. Irs gov 1040x Persons that may register. Irs gov 1040x   You may, but are not required to, register if you are a: Feedstock user, Industrial user, Throughputter that is not a position holder, Ultimate vendor, Diesel-water fuel emulsion producer, Credit card issuer, or Alternative fuel claimant. Irs gov 1040x Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Irs gov 1040x However, they must be registered to file claims for certain sales and uses of fuel. Irs gov 1040x See Form 637 for more information. Irs gov 1040x Taxable fuel registrant. Irs gov 1040x   This is an enterer, an industrial user, a refiner, a terminal operator, or a throughputter who received a Letter of Registration under the excise tax registration provisions and whose registration has not been revoked or suspended. Irs gov 1040x The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Irs gov 1040x Additional information. Irs gov 1040x   See the Form 637 instructions for the information you must submit when you apply for registration. Irs gov 1040x Failure to register. Irs gov 1040x   The penalty for failure to register if you must register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. Irs gov 1040x Gasoline and Aviation Gasoline Gasoline. Irs gov 1040x   Gasoline means all products commonly or commercially known or sold as gasoline with an octane rating of 75 or more that are suitable for use as a motor fuel. Irs gov 1040x Gasoline includes any gasoline blend other than: Qualified ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from coal, including peat), Partially exempt ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from natural gas), or Denatured alcohol. Irs gov 1040x Gasoline also includes gasoline blendstocks, discussed later. Irs gov 1040x Aviation gasoline. Irs gov 1040x   This means all special grades of gasoline suitable for use in aviation reciprocating engines and covered by ASTM specification D910 or military specification MIL-G-5572. Irs gov 1040x Taxable Events The tax on gasoline is $. Irs gov 1040x 184 per gallon. Irs gov 1040x The tax on aviation gasoline is $. Irs gov 1040x 194 per gallon. Irs gov 1040x When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Irs gov 1040x 141 per gallon. Irs gov 1040x See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Irs gov 1040x Tax is imposed on the removal, entry, or sale of gasoline. Irs gov 1040x Each of these events is discussed later. Irs gov 1040x Also, see the special rules that apply to gasoline blendstocks, later. Irs gov 1040x If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Irs gov 1040x See Refunds of Second Tax in chapter 2. Irs gov 1040x Removal from terminal. Irs gov 1040x   All removals of gasoline at a terminal rack are taxable. Irs gov 1040x The position holder for that gasoline is liable for the tax. Irs gov 1040x Two-party exchanges. Irs gov 1040x   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Irs gov 1040x A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Irs gov 1040x The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Irs gov 1040x The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Irs gov 1040x The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Irs gov 1040x The transaction is subject to a written contract. Irs gov 1040x Terminal operator's liability. Irs gov 1040x   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Irs gov 1040x   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Irs gov 1040x The terminal operator is a registrant. Irs gov 1040x The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Irs gov 1040x The terminal operator has no reason to believe any information on the certificate is false. Irs gov 1040x Removal from refinery. Irs gov 1040x   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Irs gov 1040x It is made by bulk transfer and the refiner, the owner of the gasoline immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Irs gov 1040x It is made at the refinery rack. Irs gov 1040x The refiner is liable for the tax. Irs gov 1040x Exception. Irs gov 1040x   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Irs gov 1040x The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Irs gov 1040x The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Irs gov 1040x The removal from the refinery is by railcar. Irs gov 1040x The same person operates the refinery and the facility at which the gasoline is received. Irs gov 1040x Entry into the United States. Irs gov 1040x   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Irs gov 1040x It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Irs gov 1040x It is not made by bulk transfer. Irs gov 1040x The enterer is liable for the tax. Irs gov 1040x Importer of record's liability. Irs gov 1040x   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Irs gov 1040x   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Irs gov 1040x The importer of record has an unexpired notification certificate (discussed later) from the enterer. Irs gov 1040x The importer of record has no reason to believe any information in the certificate is false. Irs gov 1040x Customs bond. Irs gov 1040x   The customs bond will not be charged for the tax imposed on the entry of the gasoline if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Irs gov 1040x Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Irs gov 1040x   The removal by bulk transfer of gasoline from a terminal is taxable if the position holder for the gasoline or the operator of the pipeline or vessel is not a registrant. Irs gov 1040x The position holder is liable for the tax. Irs gov 1040x The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Irs gov 1040x However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Irs gov 1040x Bulk transfers not received at approved terminal or refinery. Irs gov 1040x   The removal by bulk transfer of gasoline from a terminal or refinery, or the entry of gasoline by bulk transfer into the United States, is taxable if the following conditions apply. Irs gov 1040x No tax was previously imposed (as discussed earlier) on any of the following events. Irs gov 1040x The removal from the refinery. Irs gov 1040x The entry into the United States. Irs gov 1040x The removal from a terminal by an unregistered position holder. Irs gov 1040x Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Irs gov 1040x   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Irs gov 1040x However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Irs gov 1040x The owner is a registrant. Irs gov 1040x The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Irs gov 1040x The owner has no reason to believe any information on the certificate is false. Irs gov 1040x The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Irs gov 1040x The operator is jointly and severally liable if the owner does not meet these conditions. Irs gov 1040x Sales to unregistered person. Irs gov 1040x   The sale of gasoline located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Irs gov 1040x   The seller is liable for the tax. Irs gov 1040x However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Irs gov 1040x   The seller is a registrant. Irs gov 1040x The seller has an unexpired notification certificate (discussed later) from the buyer. Irs gov 1040x The seller has no reason to believe any information on the certificate is false. Irs gov 1040x The buyer of the gasoline is liable for the tax if the seller meets these conditions. Irs gov 1040x The buyer is jointly and severally liable if the seller does not meet these conditions. Irs gov 1040x Exception. Irs gov 1040x   The tax does not apply to a sale if all of the following apply. Irs gov 1040x The buyer's principal place of business is not in the United States. Irs gov 1040x The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Irs gov 1040x The seller is a registrant and the exporter of record. Irs gov 1040x The fuel was exported. Irs gov 1040x Removal or sale of blended gasoline. Irs gov 1040x   The removal or sale of blended gasoline by the blender is taxable. Irs gov 1040x See Blended taxable fuel under Definitions, earlier. Irs gov 1040x   The blender is liable for the tax. Irs gov 1040x The tax is figured on the number of gallons not previously subject to the tax on gasoline. Irs gov 1040x   Persons who blend alcohol with gasoline to produce an alcohol fuel mixture outside the bulk transfer/terminal system must pay the gasoline tax on the volume of alcohol in the mixture. Irs gov 1040x See Form 720 to report this tax. Irs gov 1040x You also must be registered with the IRS as a blender. Irs gov 1040x See Form 637. Irs gov 1040x   However, if an untaxed liquid is sold as taxed taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Irs gov 1040x Notification certificate. Irs gov 1040x   The notification certificate is used to notify a person of the registration status of the registrant. Irs gov 1040x A copy of the registrant's letter of registration cannot be used as a notification certificate. Irs gov 1040x A model notification certificate is shown in the Appendix as Model Certificate C. Irs gov 1040x A notification certificate must contain all information necessary to complete the model. Irs gov 1040x   The certificate may be included as part of any business records normally used for a sale. Irs gov 1040x A certificate expires on the earlier of the date the registrant provides a new certificate, or the date the recipient of the certificate is notified that the registrant's registration has been revoked or suspended. Irs gov 1040x The registrant must provide a new certificate if any information on a certificate has changed. Irs gov 1040x Additional persons liable. Irs gov 1040x   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax is imposed on: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty, or Anyone who willfully causes the person to fail to pay the tax. Irs gov 1040x Gasoline Blendstocks Gasoline blendstocks may be subject to $. Irs gov 1040x 001 per gallon LUST tax as discussed below. Irs gov 1040x Gasoline includes gasoline blendstocks. Irs gov 1040x The previous discussions apply to these blendstocks. Irs gov 1040x However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Irs gov 1040x 001 per gallon or are not subject to the excise tax. Irs gov 1040x Blendstocks. Irs gov 1040x   Gasoline blendstocks are: Alkylate, Butane, Butene, Catalytically cracked gasoline, Coker gasoline, Ethyl tertiary butyl ether (ETBE), Hexane, Hydrocrackate, Isomerate, Methyl tertiary butyl ether (MTBE), Mixed xylene (not including any separated isomer of xylene), Natural gasoline, Pentane, Pentane mixture, Polymer gasoline, Raffinate, Reformate, Straight-run gasoline, Straight-run naphtha, Tertiary amyl methyl ether (TAME), Tertiary butyl alcohol (gasoline grade) (TBA), Thermally cracked gasoline, and Toluene. Irs gov 1040x   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Irs gov 1040x Not used to produce finished gasoline. Irs gov 1040x   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Irs gov 1040x Removals and entries not connected to sale. Irs gov 1040x   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Irs gov 1040x Removals and entries connected to sale. Irs gov 1040x   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant, and at the time of the sale, meets the following requirements. Irs gov 1040x The person has an unexpired certificate (discussed later) from the buyer. Irs gov 1040x The person has no reason to believe any information in the certificate is false. Irs gov 1040x Sales after removal or entry. Irs gov 1040x   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Irs gov 1040x The seller is liable for the tax. Irs gov 1040x However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Irs gov 1040x The seller has an unexpired certificate (discussed next) from the buyer. Irs gov 1040x The seller has no reason to believe any information in the certificate is false. Irs gov 1040x Certificate of buyer. Irs gov 1040x   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Irs gov 1040x The certificate may be included as part of any business records normally used for a sale. Irs gov 1040x A model certificate is shown in the Appendix as Model Certificate D. Irs gov 1040x The certificate must contain all information necessary to complete the model. Irs gov 1040x   A certificate expires on the earliest of the following dates. Irs gov 1040x The date 1 year after the effective date (not earlier than the date signed) of the certificate. Irs gov 1040x The date a new certificate is provided to the seller. Irs gov 1040x The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Irs gov 1040x The buyer must provide a new certificate if any information on a certificate has changed. Irs gov 1040x   The IRS may withdraw the buyer's right to provide a certificate if that buyer uses the gasoline blendstocks in the production of finished gasoline or resells the blendstocks without getting a certificate from its buyer. Irs gov 1040x Received at approved terminal or refinery. Irs gov 1040x   The nonbulk removal or entry of gasoline blendstocks received at an approved terminal or refinery is not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) meets all the following requirements. Irs gov 1040x The person is a registrant. Irs gov 1040x The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Irs gov 1040x The person has no reason to believe any information on the certificate is false. Irs gov 1040x Bulk transfers to registered industrial user. Irs gov 1040x   The removal of gasoline blendstocks from a pipeline or vessel is not taxable (other than LUST) if the blendstocks are received by a registrant that is an industrial user. Irs gov 1040x An industrial user is any person that receives gasoline blendstocks by bulk transfer for its own use in the manufacture of any product other than finished gasoline. Irs gov 1040x Credits or Refunds. Irs gov 1040x   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Irs gov 1040x For more information, see chapter 2. Irs gov 1040x Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Irs gov 1040x However, special rules (discussed later) apply to dyed diesel fuel and dyed kerosene, and to undyed diesel fuel and undyed kerosene sold or used in Alaska for certain nontaxable uses and undyed kerosene used for a feedstock purpose. Irs gov 1040x 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 train, and Transmix. Irs gov 1040x A liquid is suitable for this use if the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Irs gov 1040x A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Irs gov 1040x However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Irs gov 1040x Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Irs gov 1040x 5 and No. Irs gov 1040x 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Irs gov 1040x An excluded liquid is either of the following. Irs gov 1040x A liquid that contains less than 4% normal paraffins. Irs gov 1040x A liquid with all the following properties. Irs gov 1040x Distillation range of 125 degrees Fahrenheit or less. Irs gov 1040x Sulfur content of 10 ppm or less. Irs gov 1040x Minimum color of +27 Saybolt. Irs gov 1040x Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Irs gov 1040x Kerosene. Irs gov 1040x   This means any of the following liquids. Irs gov 1040x One of the two grades of kerosene (No. Irs gov 1040x 1-K and No. Irs gov 1040x 2-K) covered by ASTM specification D3699. Irs gov 1040x Kerosene-type jet fuel covered by ASTM specification D1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-DTL-83133E (Grade JP-8). Irs gov 1040x See Kerosene for Use in Aviation, later. Irs gov 1040x   However, kerosene does not include excluded liquid, discussed earlier. Irs gov 1040x   Kerosene also includes any liquid that would be described above but for the presence of a dye of the type used to dye kerosene for a nontaxable use. Irs gov 1040x Diesel-powered highway vehicle. Irs gov 1040x   This is any self-propelled vehicle designed to carry a load over public highways (whether or not also designed to perform other functions) and propelled by a diesel-powered engine. Irs gov 1040x Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Irs gov 1040x For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Irs gov 1040x 2) in chapter 2. Irs gov 1040x Diesel-powered train. Irs gov 1040x   This is any diesel-powered equipment or machinery that rides on rails. Irs gov 1040x The term includes a locomotive, work train, switching engine, and track maintenance machine. Irs gov 1040x Taxable Events The tax on diesel fuel and kerosene is $. Irs gov 1040x 244 per gallon. Irs gov 1040x It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Irs gov 1040x Each of these events is discussed later. Irs gov 1040x Only the $. Irs gov 1040x 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Irs gov 1040x If the tax is paid on the diesel fuel or kerosene in more than one event, a refund may be allowed for the “second” tax paid. Irs gov 1040x See Refunds of Second Tax in chapter 2. Irs gov 1040x Use in certain intercity and local buses. Irs gov 1040x   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Irs gov 1040x A claim for $. Irs gov 1040x 17 per gallon may be made by the registered ultimate vendor (under certain conditions) or the ultimate purchaser for undyed diesel fuel or undyed kerosene sold for use in certain intercity or local buses. Irs gov 1040x An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Irs gov 1040x The bus must be engaged in one of the following activities. Irs gov 1040x Scheduled transportation along regular routes regardless of the size of the bus. Irs gov 1040x Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Irs gov 1040x A bus is available to the general public if the bus is available for hire to more than a limited number of persons, groups, or organizations. Irs gov 1040x Removal from terminal. Irs gov 1040x   All removals of diesel fuel and kerosene at a terminal rack are taxable. Irs gov 1040x The position holder for that fuel is liable for the tax. Irs gov 1040x Two-party exchanges. Irs gov 1040x   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Irs gov 1040x A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Irs gov 1040x The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Irs gov 1040x The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Irs gov 1040x The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Irs gov 1040x The transaction is subject to a written contract. Irs gov 1040x Terminal operator's liability. Irs gov 1040x   The terminal operator is jointly and severally liable for the tax if the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that diesel fuel or kerosene is dyed (discussed later). Irs gov 1040x   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Irs gov 1040x However, a terminal operator will not be liable for the tax in this situation if, at the time of the removal, the following conditions are met. Irs gov 1040x The terminal operator is a registrant. Irs gov 1040x The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Irs gov 1040x The terminal operator has no reason to believe any information on the certificate is false. Irs gov 1040x Removal from refinery. Irs gov 1040x   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Irs gov 1040x It is made by bulk transfer and the refiner, the owner of the fuel immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Irs gov 1040x It is made at the refinery rack. Irs gov 1040x The refiner is liable for the tax. Irs gov 1040x Exception. Irs gov 1040x   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Irs gov 1040x The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Irs gov 1040x The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Irs gov 1040x The removal from the refinery is by: Railcar and the same person operates the refinery and the facility at which the diesel fuel or kerosene is received, or For diesel fuel only, a trailer or semi-trailer used exclusively to transport the diesel fuel from a refinery (described in (1)) to a facility (described in (2)) less than 20 miles from the refinery. Irs gov 1040x Entry into the United States. Irs gov 1040x   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Irs gov 1040x It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Irs gov 1040x It is not made by bulk transfer. Irs gov 1040x The enterer is liable for the tax. Irs gov 1040x Importer of record's liability. Irs gov 1040x   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Irs gov 1040x   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Irs gov 1040x The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Irs gov 1040x The importer of record has no reason to believe any information in the certificate is false. Irs gov 1040x Customs bond. Irs gov 1040x   The customs bond will not be charged for the tax imposed on the entry of the diesel fuel or kerosene if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Irs gov 1040x Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Irs gov 1040x   The removal by bulk transfer of diesel fuel or kerosene from a terminal is taxable if the position holder for that fuel or the operator of the pipeline or vessel is not a registrant. Irs gov 1040x The position holder is liable for the tax. Irs gov 1040x The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Irs gov 1040x However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Irs gov 1040x Bulk transfers not received at approved terminal or refinery. Irs gov 1040x   The removal by bulk transfer of diesel fuel or kerosene from a terminal or refinery or the entry of diesel fuel or kerosene by bulk transfer into the United States is taxable if the following conditions apply. Irs gov 1040x No tax was previously imposed (as discussed earlier) on any of the following events. Irs gov 1040x The removal from the refinery. Irs gov 1040x The entry into the United States. Irs gov 1040x The removal from a terminal by an unregistered position holder. Irs gov 1040x Upon removal from the pipeline or vessel, the diesel fuel or kerosene is not received at an approved terminal or refinery (or at another pipeline or vessel). Irs gov 1040x   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Irs gov 1040x However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Irs gov 1040x The owner is a registrant. Irs gov 1040x The owner has an unexpired notification certificate (discussed under Gasoline) from the operator of the terminal or refinery where the diesel fuel or kerosene is received. Irs gov 1040x The owner has no reason to believe any information on the certificate is false. Irs gov 1040x The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Irs gov 1040x The operator is jointly and severally liable if the owner does not meet these conditions. Irs gov 1040x Sales to unregistered person. Irs gov 1040x   The sale of diesel fuel or kerosene located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Irs gov 1040x   The seller is liable for the tax. Irs gov 1040x However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Irs gov 1040x The seller is a registrant. Irs gov 1040x The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Irs gov 1040x The seller has no reason to believe any information on the certificate is false. Irs gov 1040x The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Irs gov 1040x The buyer is jointly and severally liable if the seller does not meet these conditions. Irs gov 1040x Exception. Irs gov 1040x   The tax does not apply to a sale if all of the following apply. Irs gov 1040x The buyer's principal place of business is not in the United States. Irs gov 1040x The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Irs gov 1040x The seller is a registrant and the exporter of record. Irs gov 1040x The fuel was exported. Irs gov 1040x Removal or sale of blended diesel fuel or kerosene. Irs gov 1040x   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Irs gov 1040x Blended taxable fuel produced using biodiesel is subject to the tax. Irs gov 1040x See Blended taxable fuel under Definitions, earlier. Irs gov 1040x   The blender is liable for the tax. Irs gov 1040x The tax is figured on the number of gallons not previously subject to the tax. Irs gov 1040x   Persons who blend biodiesel with undyed diesel fuel to produce and sell or use a biodiesel mixture outside the bulk transfer/terminal system must pay the diesel fuel tax on the volume of biodiesel in the mixture. Irs gov 1040x Generally, the biodiesel mixture must be diesel fuel (defined earlier). Irs gov 1040x See Form 720 to report this tax. Irs gov 1040x You also must be registered by the IRS as a blender. Irs gov 1040x See Form 637 for more information. Irs gov 1040x   However, if an untaxed liquid is sold as taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Irs gov 1040x Additional persons liable. Irs gov 1040x   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax applies to: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty; or Anyone who willfully causes the person to fail to pay the tax. Irs gov 1040x Credits or Refunds. Irs gov 1040x   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Irs gov 1040x For more information, see chapter 2. Irs gov 1040x Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Irs gov 1040x 001 per gallon LUST tax as discussed below, unless the fuel is for export. Irs gov 1040x The excise tax is not imposed on the removal, entry, or sale of diesel fuel or kerosene (other than the LUST tax) if all the following tests are met. Irs gov 1040x The person otherwise liable for tax (for example, the position holder) is a registrant. Irs gov 1040x In the case of a removal from a terminal, the terminal is an approved terminal. Irs gov 1040x The diesel fuel or kerosene satisfies the dyeing requirements (described next). Irs gov 1040x Dyeing requirements. Irs gov 1040x   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Irs gov 1040x It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Irs gov 1040x 9 pounds of the solid dye standard Solvent Red 26 per thousand barrels of fuel or any dye of a type and in a concentration that has been approved by the Commissioner. Irs gov 1040x Is indelibly dyed by mechanical injection. Irs gov 1040x See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Irs gov 1040x Notice required. Irs gov 1040x   A legible and conspicuous notice stating either: DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE or DYED KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE must be: Provided by the terminal operator to any person that receives dyed diesel fuel or dyed kerosene at a terminal rack of that operator, and Posted by a seller on any retail pump or other delivery facility where it sells dyed diesel fuel or dyed kerosene for use by its buyer. Irs gov 1040x   The notice under item (1) must be provided by the time of the removal and must appear on all shipping papers, bills of lading, and similar documents accompanying the removal of the fuel. Irs gov 1040x   Any seller that fails to post the required notice under item (2) is presumed to know that the fuel will be used for a taxable use (a use other than a nontaxable use listed later). Irs gov 1040x That seller is subject to the penalty described next. Irs gov 1040x Penalty. Irs gov 1040x   A penalty is imposed on a person if any of the following situations apply. Irs gov 1040x Any dyed fuel is sold or held for sale by the person for a use the person knows or has reason to know is not a nontaxable use of the fuel. Irs gov 1040x Any dyed fuel is held for use or used by the person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed. Irs gov 1040x The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Irs gov 1040x The person has knowledge that a dyed fuel that has been altered, as described in (3) above, sells or holds for sale such fuel for any use for which the person knows or has reason to know is not a nontaxable use of the fuel. Irs gov 1040x   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Irs gov 1040x After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Irs gov 1040x   This penalty is in addition to any tax imposed on the fuel. Irs gov 1040x   If the penalty is imposed, each officer, employee, or agent of a business entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with that entity for the penalty. Irs gov 1040x   There is no administrative appeal or review allowed for the third and subsequent penalty imposed by section 6715 on any person except for: Fraud or a mistake in the chemical analysis, or Mathematical calculation of the penalty. Irs gov 1040x   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Irs gov 1040x However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Irs gov 1040x The penalty may apply if the fuel is held for sale or use for a taxable use while the back-up tax does not apply unless the fuel is delivered into a fuel supply tank. Irs gov 1040x Exception to penalty. Irs gov 1040x   The penalty under item (3) will not apply in any of the following situations. Irs gov 1040x Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Irs gov 1040x Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any other liquid (other than diesel fuel or kerosene) that contains the type and amount of dye required to meet the dyeing requirements. Irs gov 1040x The alteration or attempted alteration occurs in an exempt area of Alaska. Irs gov 1040x See Removal for sale or use in Alaska, later. Irs gov 1040x Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with diesel fuel or kerosene not meeting the dyeing requirements and the blending occurs as part of a nontaxable use (other than export), discussed later. Irs gov 1040x Alaska and Feedstocks Tax of $. Irs gov 1040x 001 per gallon is imposed on: Undyed diesel fuel or undyed kerosene sold or used in Alaska for certain nontaxable uses (see Later sales on page 10). Irs gov 1040x Undyed kerosene used for feedstock purposes. Irs gov 1040x Removal for sale or use in Alaska. Irs gov 1040x   No tax is imposed on the removal, entry, or sale of diesel fuel or kerosene in Alaska for ultimate sale or use in certain areas of Alaska for certain nontaxable uses. Irs gov 1040x The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Irs gov 1040x The person otherwise liable for the tax (position holder, refiner, or enterer): Is a registrant, Can show satisfactory evidence of the nontaxable nature of the transaction, and Has no reason to believe the evidence is false. Irs gov 1040x In the case of a removal from a terminal, the terminal is an approved terminal. Irs gov 1040x The owner of the fuel immediately after the removal or entry holds the fuel for its own use in a nontaxable use (discussed later) or is a qualified dealer. Irs gov 1040x   If all three of the requirements above are not met, then tax is imposed at $. Irs gov 1040x 244 per gallon. Irs gov 1040x   A qualified dealer is any person that holds a qualified dealer license from the state of Alaska or has been registered by the IRS as a qualified retailer. Irs gov 1040x Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Irs gov 1040x Later sales. Irs gov 1040x   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Irs gov 1040x The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Irs gov 1040x However, the sale is not taxable (other than the LUST tax at $. Irs gov 1040x 001 per gallon) if all the following requirements are met. Irs gov 1040x The fuel is sold in Alaska for certain nontaxable uses. Irs gov 1040x The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Irs gov 1040x The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Irs gov 1040x Feedstock purposes. Irs gov 1040x   The $. Irs gov 1040x 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Irs gov 1040x The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Irs gov 1040x In the case of a removal from a terminal, the terminal is an approved terminal. Irs gov 1040x Either: The person otherwise liable for tax uses the kerosene for a feedstock purpose, or 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 later) from the buyer and has no reason to believe any information on the certificate is false. Irs gov 1040x   If all of the requirements above are not met, then tax is imposed at $. Irs gov 1040x 244 per gallon. Irs gov 1040x   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Irs gov 1040x For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Irs gov 1040x A feedstock user is a person that uses kerosene for a feedstock purpose. Irs gov 1040x A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Irs gov 1040x See Registration Requirements, earlier. Irs gov 1040x Later sales. Irs gov 1040x   The excise tax ($. Irs gov 1040x 244 per gallon) applies to kerosene sold for use by the buyer for a feedstock purpose (item (3)(b) above) if the buyer in that sale later sells the kerosene. Irs gov 1040x The tax is imposed at the time of the later sale and that seller is liable for the tax. Irs gov 1040x Certificate. Irs gov 1040x   The certificate from the buyer certifies the buyer is a registered feedstock user and the kerosene will be used by the buyer for a feedstock purpose. Irs gov 1040x The certificate may be included as part of any business records normally used for a sale. Irs gov 1040x A model certificate is shown in the Appendix as Model Certificate G. Irs gov 1040x Your certificate must contain all information necessary to complete the model. Irs gov 1040x   A certificate expires on the earliest of the following dates. Irs gov 1040x The date 1 year after the effective date (not earlier than the date signed) of the certificate. Irs gov 1040x The date the seller is provided a new certificate or notice that the current certificate is invalid. Irs gov 1040x The date the seller is notified the buyer's registration has been revoked or suspended. Irs gov 1040x   The buyer must provide a new certificate if any information on a certificate has changed. Irs gov 1040x Back-up Tax Tax is imposed on the delivery of any of the following into the fuel supply tank of a diesel-powered highway vehicle. Irs gov 1040x Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Irs gov 1040x Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Irs gov 1040x Any liquid other than gasoline, diesel fuel, or kerosene. Irs gov 1040x Generally, this back-up tax is imposed at a rate of $. Irs gov 1040x 244 per gallon. Irs gov 1040x Liability for tax. Irs gov 1040x   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Irs gov 1040x In addition, the seller of the diesel fuel or kerosene is jointly and severally liable for the tax if the seller knows or has reason to know that the fuel will be used for other than a nontaxable use. Irs gov 1040x Exemptions from the back-up tax. Irs gov 1040x   The back-up tax does not apply to a delivery of diesel fuel or kerosene for uses 1, 2, 6, 7, 12, 13, 14, and 15 listed under Definitions of Nontaxable Uses in chapter 2. Irs gov 1040x   In addition, since the back-up tax is imposed only on the delivery into the fuel supply tank of a diesel-powered vehicle or train, the tax does not apply to diesel fuel or kerosene used as heating oil or in stationary engines. Irs gov 1040x Diesel-Water Fuel Emulsion Diesel-water fuel emulsion means diesel fuel at least 14% of which is water and for which the emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Irs gov 1040x A reduced tax rate of $. Irs gov 1040x 198 per gallon is imposed on a diesel-water fuel emulsion. Irs gov 1040x To be eligible for the reduced rate, the person who sells, removes, or uses the diesel-water fuel emulsion must be registered by the IRS. Irs gov 1040x If the diesel-water fuel emulsion does not meet the requirements above, or if the person who sells, removes, or uses the fuel is not registered, the diesel-water fuel emulsion is taxed at $. Irs gov 1040x 244 per gallon. Irs gov 1040x Credits or refunds. Irs gov 1040x   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Irs gov 1040x Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Irs gov 1040x 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Irs gov 1040x For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Irs gov 1040x 219. Irs gov 1040x The rate of $. Irs gov 1040x 219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. Irs gov 1040x The airport terminal does not need to be a secured airport terminal for this rate to apply. Irs gov 1040x However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later. Irs gov 1040x For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Irs gov 1040x 044 per gallon. Irs gov 1040x For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Irs gov 1040x 044 rate applies only if the truck, tanker, or tank wagon is loaded at a terminal that is located in a secured area of the airport. Irs gov 1040x See Terminal located within a secured area of an airport, later. Irs gov 1040x In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Irs gov 1040x For kerosene removed directly into the fuel tank of an aircraft for a use exempt from tax under section 4041(c) (such as use in an aircraft for the exclusive use of a state or local government), the rate of tax is $. Irs gov 1040x 001. Irs gov 1040x There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Irs gov 1040x The kerosene must be removed from a qualifying refueler truck, tanker, or tank wagon loaded at a terminal located within a secured area of an airport. Irs gov 1040x See Terminal located within a secured area of an airport, later. Irs gov 1040x In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Irs gov 1040x The position holder is liable for the $. Irs gov 1040x 001 per gallon tax. Irs gov 1040x For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Irs gov 1040x 141 per gallon applies. Irs gov 1040x Certain refueler trucks, tankers, and tank wagons treated as terminals. Irs gov 1040x   For purposes of the tax imposed on kerosene for use in aviation removed directly into the fuel tank of an aircraft for use in commercial aviation, certain refueler trucks, tankers, and tank wagons are treated as part of a terminal if the following conditions are met. Irs gov 1040x Such terminal is located within an area of an airport. Irs gov 1040x Any kerosene for use in aviation that is loaded in a refueler truck, tanker, or tank wagon at a terminal is for delivery into aircraft at the airport in which the terminal is located. Irs gov 1040x Except in exigent circumstances, such as those identified in Notice 2005-80, no vehicle registered for highway use is loaded with kerosene for use in aviation at the terminal. Irs gov 1040x The refueler truck, tanker, or tank wagon meets the following requirements: Has storage tanks, hose, and coupling equipment designed and used for fueling aircraft, Is not registered for highway use, and Is operated by the terminal operator or a person that makes a daily accounting to the terminal operator of each delivery of fuel from the refueler truck, tanker, or tank wagon. Irs gov 1040x Information reporting will be required by terminal operators regarding this provision. Irs gov 1040x Until the format of this information reporting is issued, taxpayers are required to retain records regarding the daily accounting, but are not required to report such information. Irs gov 1040x Terminal located within a secured area of an airport. Irs gov 1040x   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Irs gov 1040x This list refers to fueling operations at airport terminals as it applies to the federal excise tax on kerosene for use in aviation, and has nothing to do with the general security of airports either included or not included in the list. Irs gov 1040x Liability For Tax If the kerosene is removed directly into the fuel tank of an aircraft for use in commercial aviation, the operator of the aircraft in commercial aviation is liable for the tax on the removal at the rate of $. Irs gov 1040x 044 per gallon. Irs gov 1040x However, the position holder is liable for the LUST tax for kerosene for use in aviation removed directly into the fuel tank of an aircraft for use exempt from tax under section 4041(c) (except foreign trade). Irs gov 1040x For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Irs gov 1040x For the aircraft operator to be liable for the tax $. Irs gov 1040x 044 rate, the position holder must meet the following requirements: Is a taxable fuel registrant, Has an unexpired certificate (a model certificate is shown in the Appendix as Model Certificate K) from the operator of the aircraft, and Has no reason to believe any of the information in the certificate is false. Irs gov 1040x Commercial aviation. Irs gov 1040x   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Irs gov 1040x However, commercial aviation does not include any of the following uses. Irs gov 1040x Any use exclusively for the purpose of skydiving. Irs gov 1040x Certain air transportation by seaplane. Irs gov 1040x See Seaplanes under Transportation of Persons by Air in chapter 4. Irs gov 1040x Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Irs gov 1040x For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Irs gov 1040x Any use of an aircraft that has a maximum certificated takeoff weight of 6,000 pounds or less, unless the aircraft is operated on an established line. Irs gov 1040x For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Irs gov 1040x Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Irs gov 1040x See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Irs gov 1040x Surtax on any liquid used in a fractional ownership program aircraft as fuel Fuel used in a fractional ownership program aircraft (as defined below) after March 31, 2012, is subject to a surtax of $. Irs gov 1040x 141 per gallon. Irs gov 1040x The fractional ownership program manager is liable for the tax. Irs gov 1040x The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Irs gov 1040x If the surtax is imposed, the following air transportation taxes do not apply. Irs gov 1040x Transportation of persons by air. Irs gov 1040x Transportation of property by air. Irs gov 1040x Use of international air travel facilities. Irs gov 1040x These taxes are described under Air Transportation Taxes, later. Irs gov 1040x A fractional ownership program aircraft flight is considered noncommercial aviation, for the rules for kerosene used in noncommercial aviation, see Kerosene for Use in Aviation above. Irs gov 1040x Fractional ownership aircraft program    is a program under which:  A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners; There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner; For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager; There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program. Irs gov 1040x Fractional program aircraft. Irs gov 1040x   Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by Federal Aviation Administration under subpart K of part 91 title 14, Code of Federal Regulations, and is registered in the U. Irs gov 1040x S. Irs gov 1040x   Fractional program aircraft are not considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner when they are used for flight demonstration, maintenance or crew training. Irs gov 1040x In such situations, the flight is not commercial aviation. Irs gov 1040x Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Irs gov 1040x Fractional owner. Irs gov 1040x   Any person owning any interest (including the entire interest) in a fractional program aircraft. Irs gov 1040x Dry lease aircraft exchange. Irs gov 1040x   An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner. Irs gov 1040x Special rule relating to deadhead service. Irs gov 1040x   A fractional program aircraft will not be considered to be used on account of a qualified fractional owner when it is used in deadhead service and a person other than a qualified fractional owner is separately charged for such service. Irs gov 1040x More information. Irs gov 1040x   See section 4043 for more information on the surtax. Irs gov 1040x Certificate for Commercial Aviation and Exempt Uses A certificate is required from the aircraft operator: To support aircraft operator liability for tax on removal of kerosene for use in aviation directly into the fuel tank of an aircraft in commercial aviation, or For exempt uses. Irs gov 1040x Certificate. Irs gov 1040x   The certificate may be included as part of any business records normally used for a sale. Irs gov 1040x See Model Certificate K in the Appendix. Irs gov 1040x   A certificate expires on the earliest of the following dates. Irs gov 1040x The date 1 year after the effective date (not earlier than the date signed) of the certificate. Irs gov 1040x The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Irs gov 1040x The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Irs gov 1040x   The buyer must provide a new certificate if any information on a certificate has changed. Irs gov 1040x   The IRS may withdraw the buyer's right to provide a certificate if the buyer uses the kerosene for use in aviation to which a certificate relates other than as stated in the certificate. Irs gov 1040x Exempt use. Irs gov 1040x   The rate on kerosene for use in aviation is $. Irs gov 1040x 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Irs gov 1040x An exempt use includes kerosene for the exclusive use of a state or local government. Irs gov 1040x There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Irs gov 1040x Flash title transaction. Irs gov 1040x   A position holder is not liable for tax if, among other conditions, it obtains a certificate (described above) from the operator of the aircraft into which the kerosene is delivered. Irs gov 1040x In a “flash title transaction” the position holder sells the kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft. Irs gov 1040x In this case, the position holder will be treated as having a certificate from the operator of the aircraft if: The aircraft operator puts the reseller's name, address, and EIN on the certificate in place of the position holder's information; and The reseller provides the position holder with a statement of the kerosene reseller. Irs gov 1040x Reseller statement. Irs gov 1040x   This is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains: The reseller's name, address, and EIN; The position holder's name, address, and EIN; and A statement that the reseller has no reason to believe that any information in the accompanying aircraft operator's certificate is false. Irs gov 1040x Credits or Refunds. Irs gov 1040x   A claim may be made by the ultimate purchaser (the operator) for taxed kerosene for use in aviation used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia). Irs gov 1040x A claim may be made by a registered ultimate vendor for certain sales. Irs gov 1040x For more information, see chapter 2. Irs gov 1040x Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Irs gov 1040x Other Fuels include alternative fuels. Irs gov 1040x Alternative fuels are: Liquefied petroleum gas (LPG), “P Series” fuels, Compressed natural gas (CNG) (discussed later), Liquefied hydrogen, Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, Liquid fuel derived from biomass, Liquefied natural gas (LNG), and Liquefied gas derived from biomass. Irs gov 1040x Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Irs gov 1040x Qualified methanol and ethanol fuels. Irs gov 1040x   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Irs gov 1040x The tax rates are listed in the Instructions for Form 720. Irs gov 1040x Partially exempt methanol and ethanol fuels. Irs gov 1040x   A reduced tax rate applies to these fuels. Irs gov 1040x Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Irs gov 1040x The tax rates are listed in the Instructions for Form 720. Irs gov 1040x Motor vehicles. Irs gov 1040x   Motor vehicles include all types of vehicles, whether or not registered (or required to be registered) for highway use, that have both the following characteristics. Irs gov 1040x They are propelled by a motor. Irs gov 1040x They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t
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IRS Extends Tax Relief to Some New Jersey and New York Victims of Hurricane Sandy; Return Filing and Tax Payment Deadline Extended to April 1, 2013

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IR-2013-16, Feb. 1, 2013

WASHINGTON –– In the aftermath of Hurricane Sandy, the Internal Revenue Service announced additional tax relief to affected individuals and businesses. The IRS today is further extending tax deadlines of that relief until April 1 for the following localities:

  • In New Jersey (starting Oct. 26): Monmouth and Ocean counties.
  • In New York (starting Oct. 27): Nassau, Queens, Richmond and Suffolk counties.

Beyond the relief provided by law to taxpayers in the FEMA-designated counties, the IRS will work with any taxpayer who resides outside the disaster area but whose books, records or tax professional are located in the areas affected by Hurricane Sandy. All workers assisting the relief activities in the covered disaster areas who are affiliated with a recognized government or philanthropic organization are eligible for relief. Taxpayers who live outside of the impacted area and think they may qualify for this relief need to contact the IRS at 866-562-5227.

The IRS also announced today that Taxpayer Assistance Centers in several New York and New Jersey locations will be open additional hours to provide help to taxpayers impacted by Hurricane Sandy. There will also be special assistance available at several New Jersey and New York locations on Saturday, February 23 from 9 a.m. until 2 p.m. More information will be available on irs.gov.

The tax relief postpones various tax filing and payment deadlines that occurred starting in late October. As a result, affected individuals and businesses will have until April 1, 2013, to file these returns and pay any taxes due. This includes the fourth quarter individual estimated tax payment, normally due Jan. 15, 2013. It also includes payroll and excise tax returns and accompanying payments for the third and fourth quarters, normally due on Oct. 31, 2012 and Jan. 31, 2013 respectively, and calendar year corporate income tax returns due March 15. It also applies to tax-exempt organizations required to file Form 990 series returns with an original or extended deadline falling during this period.  

The IRS will abate any interest, late-payment or late-filing penalty that would otherwise apply. The IRS automatically provides this relief to any taxpayer located in the disaster area. Taxpayers need not contact the IRS to get this relief.

The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov

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Page Last Reviewed or Updated: 05-Nov-2013

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