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Myfreetaxes Com Achr

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Myfreetaxes Com Achr

Myfreetaxes com achr 2. Myfreetaxes com achr   Employees' Pay Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tests for Deducting PayTest 1—Reasonableness Test 2—For Services Performed Kinds of PayAwards Bonuses Education Expenses Fringe Benefits Loans or Advances Property Reimbursements for Business Expenses Sick and Vacation Pay Introduction You can generally deduct the amount you pay your employees for the services they perform. Myfreetaxes com achr The pay may be in cash, property, or services. Myfreetaxes com achr It may include wages, salaries, bonuses, commissions, or other non-cash compensation such as vacation allowances and fringe benefits. Myfreetaxes com achr For information about deducting employment taxes, see chapter 5. Myfreetaxes com achr You can claim employment credits, such as the following, if you hire individuals who meet certain requirements. Myfreetaxes com achr Empowerment zone employment credit (Form 8844). Myfreetaxes com achr Indian employment credit (Form 8845). Myfreetaxes com achr Work opportunity credit (Form 5884). Myfreetaxes com achr Credit for employer differential wage payments (Form 8932). Myfreetaxes com achr Reduce your deduction for employee wages by the amount of employment credits you claim. Myfreetaxes com achr For more information about these credits, see the form on which the credit is claimed. Myfreetaxes com achr Topics - This chapter discusses: Tests for deducting pay Kinds of pay Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits See chapter 12 for information about getting publications and forms. Myfreetaxes com achr Tests for Deducting Pay To be deductible, your employees' pay must be an ordinary and necessary business expense and you must pay or incur it. Myfreetaxes com achr These and other requirements that apply to all business expenses are explained in chapter 1. Myfreetaxes com achr In addition, the pay must meet both of the following tests. Myfreetaxes com achr Test 1. Myfreetaxes com achr It must be reasonable. Myfreetaxes com achr Test 2. Myfreetaxes com achr It must be for services performed. Myfreetaxes com achr The form or method of figuring the pay does not affect its deductibility. Myfreetaxes com achr For example, bonuses and commissions based on sales or earnings, and paid under an agreement made before the services were performed, are both deductible. Myfreetaxes com achr Test 1—Reasonableness You must be able to prove that the pay is reasonable. Myfreetaxes com achr Whether the pay is reasonable depends on the circumstances that existed when you contracted for the services, not those that exist when reasonableness is questioned. Myfreetaxes com achr If the pay is excessive, the excess pay is disallowed as a deduction. Myfreetaxes com achr Factors to consider. Myfreetaxes com achr   Determine the reasonableness of pay by the facts and circumstances. Myfreetaxes com achr Generally, reasonable pay is the amount that a similar business would pay for the same or similar services. Myfreetaxes com achr   To determine if pay is reasonable, also consider the following items and any other pertinent facts. Myfreetaxes com achr The duties performed by the employee. Myfreetaxes com achr The volume of business handled. Myfreetaxes com achr The character and amount of responsibility. Myfreetaxes com achr The complexities of your business. Myfreetaxes com achr The amount of time required. Myfreetaxes com achr The cost of living in the locality. Myfreetaxes com achr The ability and achievements of the individual employee performing the service. Myfreetaxes com achr The pay compared with the gross and net income of the business, as well as with distributions to shareholders if the business is a corporation. Myfreetaxes com achr Your policy regarding pay for all your employees. Myfreetaxes com achr The history of pay for each employee. Myfreetaxes com achr Test 2—For Services Performed You must be able to prove the payment was made for services actually performed. Myfreetaxes com achr Employee-shareholder salaries. Myfreetaxes com achr   If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed, the excessive part of the salary may be treated as a constructive dividend to the employee-shareholder. Myfreetaxes com achr The excessive part of the salary would not be allowed as a salary deduction by the corporation. Myfreetaxes com achr For more information on corporate distributions to shareholders, see Publication 542, Corporations. Myfreetaxes com achr Kinds of Pay Some of the ways you may provide pay to your employees in addition to regular wages or salaries are discussed next. Myfreetaxes com achr For specialized and detailed information on employees' pay and the employment tax treatment of employees' pay, see Publications 15, 15-A, and 15-B. Myfreetaxes com achr Awards You can generally deduct amounts you pay to your employees as awards, whether paid in cash or property. Myfreetaxes com achr If you give property to an employee as an employee achievement award, your deduction may be limited. Myfreetaxes com achr Achievement awards. Myfreetaxes com achr   An achievement award is an item of tangible personal property that meets all the following requirements. Myfreetaxes com achr It is given to an employee for length of service or safety achievement. Myfreetaxes com achr It is awarded as part of a meaningful presentation. Myfreetaxes com achr It is awarded under conditions and circumstances that do not create a significant likelihood of disguised pay. Myfreetaxes com achr Length-of-service award. Myfreetaxes com achr    An award will qualify as a length-of-service award only if either of the following applies. Myfreetaxes com achr The employee receives the award after his or her first 5 years of employment. Myfreetaxes com achr The employee did not receive another length-of-service award (other than one of very small value) during the same year or in any of the prior 4 years. Myfreetaxes com achr Safety achievement award. Myfreetaxes com achr    An award for safety achievement will qualify as an achievement award unless one of the following applies. Myfreetaxes com achr It is given to a manager, administrator, clerical employee, or other professional employee. Myfreetaxes com achr During the tax year, more than 10% of your employees, excluding those listed in (1), have already received a safety achievement award (other than one of very small value). Myfreetaxes com achr Deduction limit. Myfreetaxes com achr   Your deduction for the cost of employee achievement awards given to any one employee during the tax year is limited to the following. Myfreetaxes com achr $400 for awards that are not qualified plan awards. Myfreetaxes com achr $1,600 for all awards, whether or not qualified plan awards. Myfreetaxes com achr   A qualified plan award is an achievement award given as part of an established written plan or program that does not favor highly compensated employees as to eligibility or benefits. Myfreetaxes com achr   A highly compensated employee is an employee who meets either of the following tests. Myfreetaxes com achr The employee was a 5% owner at any time during the year or the preceding year. Myfreetaxes com achr The employee received more than $115,000 in pay for the preceding year. Myfreetaxes com achr You can choose to ignore test (2) if the employee was not also in the top 20% of employees ranked by pay for the preceding year. Myfreetaxes com achr   An award is not a qualified plan award if the average cost of all the employee achievement awards given during the tax year (that would be qualified plan awards except for this limit) is more than $400. Myfreetaxes com achr To figure this average cost, ignore awards of nominal value. Myfreetaxes com achr Deduct achievement awards as a nonwage business expense on your return or business schedule. Myfreetaxes com achr You may not owe employment taxes on the value of some achievement awards you provide to an employee. Myfreetaxes com achr See Publication 15-B. Myfreetaxes com achr Bonuses You can generally deduct a bonus paid to an employee if you intended the bonus as additional pay for services, not as a gift, and the services were performed. Myfreetaxes com achr However, the total bonuses, salaries, and other pay must be reasonable for the services performed. Myfreetaxes com achr If the bonus is paid in property, see Property , later. Myfreetaxes com achr Gifts of nominal value. Myfreetaxes com achr    If, to promote employee goodwill, you distribute food or merchandise of nominal value to your employees at holidays, you can deduct the cost of these items as a nonwage business expense. Myfreetaxes com achr Your deduction for de minimis gifts of food or drink are not subject to the 50% deduction limit that generally applies to meals. Myfreetaxes com achr For more information on this deduction limit, see Meals and lodging , later. Myfreetaxes com achr Education Expenses If you pay or reimburse education expenses for an employee, you can deduct the payments if they are part of a qualified educational assistance program. Myfreetaxes com achr Deduct them on the “Employee benefit programs” or other appropriate line of your tax return. Myfreetaxes com achr For information on educational assistance programs, see Educational Assistance in section 2 of Publication 15-B. Myfreetaxes com achr Fringe Benefits A fringe benefit is a form of pay for the performance of services. Myfreetaxes com achr You can generally deduct the cost of fringe benefits. Myfreetaxes com achr You may be able to exclude all or part of the value of some fringe benefits from your employees' pay. Myfreetaxes com achr You also may not owe employment taxes on the value of the fringe benefits. Myfreetaxes com achr See Table 2-1, Special Rules for Various Types of Fringe Benefits, in Publication 15-B for details. Myfreetaxes com achr Your deduction for the cost of fringe benefits for activities generally considered entertainment, amusement, or recreation, or for a facility used in connection with such an activity (for example, a company aircraft) for certain officers, directors, and more-than-10% shareholders is limited. Myfreetaxes com achr Certain fringe benefits are discussed next. Myfreetaxes com achr See Publication 15-B for more details on these and other fringe benefits. Myfreetaxes com achr Meals and lodging. Myfreetaxes com achr   You can usually deduct the cost of furnishing meals and lodging to your employees. Myfreetaxes com achr Deduct the cost in whatever category the expense falls. Myfreetaxes com achr For example, if you operate a restaurant, deduct the cost of the meals you furnish to employees as part of the cost of goods sold. Myfreetaxes com achr If you operate a nursing home, motel, or rental property, deduct the cost of furnishing lodging to an employee as expenses for utilities, linen service, salaries, depreciation, etc. Myfreetaxes com achr Deduction limit on meals. Myfreetaxes com achr   You can generally deduct only 50% of the cost of furnishing meals to your employees. Myfreetaxes com achr However, you can deduct the full cost of the following meals. Myfreetaxes com achr Meals whose value you include in an employee's wages. Myfreetaxes com achr Meals that qualify as a de minimis fringe benefit as discussed in section 2 of Publication 15-B. Myfreetaxes com achr This generally includes meals you furnish to employees at your place of business if more than half of these employees are provided the meals for your convenience. Myfreetaxes com achr Meals you furnish to your employees at the work site when you operate a restaurant or catering service. Myfreetaxes com achr Meals you furnish to your employees as part of the expense of providing recreational or social activities, such as a company picnic. Myfreetaxes com achr Meals you are required by federal law to furnish to crew members of certain commercial vessels (or would be required to furnish if the vessels were operated at sea). Myfreetaxes com achr This does not include meals you furnish on vessels primarily providing luxury water transportation. Myfreetaxes com achr Meals you furnish on an oil or gas platform or drilling rig located offshore or in Alaska. Myfreetaxes com achr This includes meals you furnish at a support camp that is near and integral to an oil or gas drilling rig located in Alaska. Myfreetaxes com achr Employee benefit programs. Myfreetaxes com achr   Employee benefit programs include the following. Myfreetaxes com achr Accident and health plans. Myfreetaxes com achr Adoption assistance. Myfreetaxes com achr Cafeteria plans. Myfreetaxes com achr Dependent care assistance. Myfreetaxes com achr Education assistance. Myfreetaxes com achr Life insurance coverage. Myfreetaxes com achr Welfare benefit funds. Myfreetaxes com achr   You can generally deduct amounts you spend on employee benefit programs on the applicable line of your tax return. Myfreetaxes com achr For example, if you provide dependent care by operating a dependent care facility for your employees, deduct your costs in whatever categories they fall (utilities, salaries, etc. Myfreetaxes com achr ). Myfreetaxes com achr Life insurance coverage. Myfreetaxes com achr   You cannot deduct the cost of life insurance coverage for you, an employee, or any person with a financial interest in your business, if you are directly or indirectly the beneficiary of the policy. Myfreetaxes com achr See Regulations section 1. Myfreetaxes com achr 264-1 for more information. Myfreetaxes com achr Welfare benefit funds. Myfreetaxes com achr   A welfare benefit fund is a funded plan (or a funded arrangement having the effect of a plan) that provides welfare benefits to your employees, independent contractors, or their beneficiaries. Myfreetaxes com achr Welfare benefits are any benefits other than deferred compensation or transfers of restricted property. Myfreetaxes com achr   Your deduction for contributions to a welfare benefit fund is limited to the fund's qualified cost for the tax year. Myfreetaxes com achr If your contributions to the fund are more than its qualified cost, carry the excess over to the next tax year. Myfreetaxes com achr   Generally, the fund's “qualified cost” is the total of the following amounts, reduced by the after-tax income of the fund. Myfreetaxes com achr The cost you would have been able to deduct using the cash method of accounting if you had paid for the benefits directly. Myfreetaxes com achr The contributions added to a reserve account that are needed to fund claims incurred but not paid as of the end of the year. Myfreetaxes com achr These claims can be for supplemental unemployment benefits, severance pay, or disability, medical, or life insurance benefits. Myfreetaxes com achr   For more information, see sections 419(c) and 419A of the Internal Revenue Code and the related regulations. Myfreetaxes com achr Loans or Advances You generally can deduct as wages an advance you make to an employee for services performed if you do not expect the employee to repay the advance. Myfreetaxes com achr However, if the employee performs no services, treat the amount you advanced as a loan. Myfreetaxes com achr If the employee does not repay the loan, treat it as income to the employee. Myfreetaxes com achr Below-market interest rate loans. Myfreetaxes com achr   On certain loans you make to an employee or shareholder, you are treated as having received interest income and as having paid compensation or dividends equal to that interest. Myfreetaxes com achr See Below-Market Loans in chapter 4. Myfreetaxes com achr Property If you transfer property (including your company's stock) to an employee as payment for services, you can generally deduct it as wages. Myfreetaxes com achr The amount you can deduct is the property's fair market value on the date of the transfer less any amount the employee paid for the property. Myfreetaxes com achr You can claim the deduction only for the tax year in which your employee includes the property's value in income. Myfreetaxes com achr Your employee is deemed to have included the value in income if you report it on Form W-2, Wage and Tax Statement, in a timely manner. Myfreetaxes com achr You treat the deductible amount as received in exchange for the property, and you must recognize any gain or loss realized on the transfer, unless it is the company's stock transferred as payment for services. Myfreetaxes com achr Your gain or loss is the difference between the fair market value of the property and its adjusted basis on the date of transfer. Myfreetaxes com achr These rules also apply to property transferred to an independent contractor for services, generally reported on Form 1099-MISC, Miscellaneous Income. Myfreetaxes com achr Restricted property. Myfreetaxes com achr   If the property you transfer for services is subject to restrictions that affect its value, you generally cannot deduct it and do not report gain or loss until it is substantially vested in the recipient. Myfreetaxes com achr However, if the recipient pays for the property, you must report any gain at the time of the transfer up to the amount paid. Myfreetaxes com achr    “Substantially vested” means the property is not subject to a substantial risk of forfeiture. Myfreetaxes com achr This means that the recipient is not likely to have to give up his or her rights in the property in the future. Myfreetaxes com achr Reimbursements for Business Expenses You can generally deduct the amount you pay or reimburse employees for business expenses incurred for your business. Myfreetaxes com achr However, your deduction may be limited. Myfreetaxes com achr If you make the payment under an accountable plan, deduct it in the category of the expense paid. Myfreetaxes com achr For example, if you pay an employee for travel expenses incurred on your behalf, deduct this payment as a travel expense. Myfreetaxes com achr If you make the payment under a nonaccountable plan, deduct it as wages and include it in the employee's Form W-2. Myfreetaxes com achr See Reimbursement of Travel, Meals, and Entertainment in chapter 11 for more information about deducting reimbursements and an explanation of accountable and nonaccountable plans. Myfreetaxes com achr Sick and Vacation Pay Sick pay. Myfreetaxes com achr   You can deduct amounts you pay to your employees for sickness and injury, including lump-sum amounts, as wages. Myfreetaxes com achr However, your deduction is limited to amounts not compensated by insurance or other means. Myfreetaxes com achr Vacation pay. Myfreetaxes com achr   Vacation pay is an employee benefit. Myfreetaxes com achr It includes amounts paid for unused vacation leave. Myfreetaxes com achr You can deduct vacation pay only in the tax year in which the employee actually receives it. Myfreetaxes com achr This rule applies regardless of whether you use the cash or accrual method of accounting. Myfreetaxes com achr Prev  Up  Next   Home   More Online Publications
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1099-K Reporting Requirements for Payment Settlement Entities

Beginning in January, 2012, payment settlement entities (PSEs) are required by the Housing Assistance Tax Act of 2008 to report on Form 1099-K the following transactions:

  • All payments made in settlement of payment card transactions (e.g., credit card);
  • Payments in settlement of third party network transactions IF:
    -Gross payments to a participating payee exceed $20,000; AND
    -There are more than 200 transactions with the participating payee.

Filing Deadlines & Procedures

Your 1099-Ks are due to merchants by January 31, 2014. Electronically filed 1099-Ks are due to the IRS April 1, 2014 (normally March 31), while paper 1099-Ks are due February 28, 2014.

File your 1099-K electronically through the FIRE (Filing Information Returns Electronically) option. For information, review Publication 1220 (PDF). If you are considering filing on paper, review General Instructions for Certain Information Returns.

Verification Processes

We verify that tax returns are correct and complete using the following processes:

More Information

You can find more about the 1099-K and other information returns at our Third Party Reporting Information Center.

You may also want to see Frequently Asked Question about Backup Withholding

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Page Last Reviewed or Updated: 20-Mar-2014

The Myfreetaxes Com Achr

Myfreetaxes com achr 1. Myfreetaxes com achr   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Myfreetaxes com achr 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. Myfreetaxes com achr Reseller statement. Myfreetaxes com achr Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Myfreetaxes com achr Deep-draft ocean-going vessels. Myfreetaxes com achr Passenger vessels. Myfreetaxes com achr Ocean-going barges. Myfreetaxes com achr State or local governments. Myfreetaxes com achr 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. Myfreetaxes com achr Gasoline, including aviation gasoline and gasoline blendstocks. Myfreetaxes com achr Diesel fuel, including dyed diesel fuel. Myfreetaxes com achr Diesel-water fuel emulsion. Myfreetaxes com achr Kerosene, including dyed kerosene and kerosene used in aviation. Myfreetaxes com achr Other Fuels (including alternative fuels). Myfreetaxes com achr Compressed natural gas (CNG). Myfreetaxes com achr Fuels used in commercial transportation on inland waterways. Myfreetaxes com achr Any liquid used in a fractional ownership program aircraft as fuel. Myfreetaxes com achr The following terms are used throughout the discussion of fuel taxes. Myfreetaxes com achr Other terms are defined in the discussion of the specific fuels to which they pertain. Myfreetaxes com achr Agri-biodiesel. Myfreetaxes com achr   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. Myfreetaxes com achr Approved terminal or refinery. Myfreetaxes com achr   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Myfreetaxes com achr Biodiesel. Myfreetaxes com achr   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. Myfreetaxes com achr Blended taxable fuel. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr Blender. Myfreetaxes com achr   This is the person that produces blended taxable fuel. Myfreetaxes com achr Bulk transfer. Myfreetaxes com achr   This is the transfer of taxable fuel by pipeline or vessel. Myfreetaxes com achr Bulk transfer/terminal system. Myfreetaxes com achr   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Myfreetaxes com achr 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. Myfreetaxes com achr Cellulosic biofuel. Myfreetaxes com achr   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. Myfreetaxes com achr Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Myfreetaxes com achr 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. Myfreetaxes com achr Also see Second generation biofuel below. Myfreetaxes com achr Diesel-water fuel emulsion. Myfreetaxes com achr   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Myfreetaxes com achr 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. Myfreetaxes com achr Dry lease aircraft exchange. Myfreetaxes com achr   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Myfreetaxes com achr Enterer. Myfreetaxes com achr   This is the importer of record (under customs law) for the taxable fuel. Myfreetaxes com achr 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. Myfreetaxes com achr If there is no importer of record, the owner at the time of entry into the United States is the enterer. Myfreetaxes com achr Entry. Myfreetaxes com achr   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. Myfreetaxes com achr This does not apply to fuel brought into Puerto Rico (which is part of the U. Myfreetaxes com achr S. Myfreetaxes com achr customs territory), but does apply to fuel brought into the United States from Puerto Rico. Myfreetaxes com achr Fractional ownership aircraft program and fractional program aircraft. Myfreetaxes com achr   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Myfreetaxes com achr Measurement of taxable fuel. Myfreetaxes com achr   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Myfreetaxes com achr Other fuels. Myfreetaxes com achr   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Myfreetaxes com achr Pipeline operator. Myfreetaxes com achr   This is the person that operates a pipeline within the bulk transfer/terminal system. Myfreetaxes com achr Position holder. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr A terminal operator that owns taxable fuel in its terminal is a position holder. Myfreetaxes com achr Rack. Myfreetaxes com achr   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Myfreetaxes com achr Refiner. Myfreetaxes com achr   This is any person that owns, operates, or otherwise controls a refinery. Myfreetaxes com achr Refinery. Myfreetaxes com achr   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. Myfreetaxes com achr However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Myfreetaxes com achr For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Myfreetaxes com achr Registrant. Myfreetaxes com achr   This is a taxable fuel registrant (see Registration Requirements, later). Myfreetaxes com achr Removal. Myfreetaxes com achr   This is any physical transfer of taxable fuel. Myfreetaxes com achr It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Myfreetaxes com achr However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Myfreetaxes com achr Renewable diesel. Myfreetaxes com achr   See Renewable Diesel Credits in chapter 2. Myfreetaxes com achr Sale. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr Second generation biofuel. Myfreetaxes com achr   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. Myfreetaxes com achr S. Myfreetaxes com achr C. Myfreetaxes com achr 7545). Myfreetaxes com achr It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Myfreetaxes com achr It is not alcohol of less than 150 proof (disregard any added denaturants). Myfreetaxes com achr See Form 6478 for more information. Myfreetaxes com achr State. Myfreetaxes com achr   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Myfreetaxes com achr An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Myfreetaxes com achr Taxable fuel. Myfreetaxes com achr   This means gasoline, diesel fuel, and kerosene. Myfreetaxes com achr Terminal. Myfreetaxes com achr   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr Terminal operator. Myfreetaxes com achr   This is any person that owns, operates, or otherwise controls a terminal. Myfreetaxes com achr Throughputter. Myfreetaxes com achr   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). Myfreetaxes com achr Vessel operator. Myfreetaxes com achr   This is the person that operates a vessel within the bulk transfer/terminal system. Myfreetaxes com achr However, vessel does not include a deep draft ocean-going vessel. Myfreetaxes com achr Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Myfreetaxes com achr A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Myfreetaxes com achr For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Myfreetaxes com achr The returns are due the last day of the month following the month in which the transaction occurs. Myfreetaxes com achr Generally, these returns can be filed on paper or electronically. Myfreetaxes com achr For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Myfreetaxes com achr Publication 3536 is only available on the IRS website. Myfreetaxes com achr Form 720-TO. Myfreetaxes com achr   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Myfreetaxes com achr Each terminal operator must file a separate form for each approved terminal. Myfreetaxes com achr Form 720-CS. Myfreetaxes com achr   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. Myfreetaxes com achr Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Myfreetaxes com achr See Form 637 for other persons who must register and for more information about registration. Myfreetaxes com achr Persons that are required to be registered. Myfreetaxes com achr   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. Myfreetaxes com achr Persons that may register. Myfreetaxes com achr   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. Myfreetaxes com achr Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Myfreetaxes com achr However, they must be registered to file claims for certain sales and uses of fuel. Myfreetaxes com achr See Form 637 for more information. Myfreetaxes com achr Taxable fuel registrant. Myfreetaxes com achr   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. Myfreetaxes com achr The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Myfreetaxes com achr Additional information. Myfreetaxes com achr   See the Form 637 instructions for the information you must submit when you apply for registration. Myfreetaxes com achr Failure to register. Myfreetaxes com achr   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. Myfreetaxes com achr Gasoline and Aviation Gasoline Gasoline. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr Gasoline also includes gasoline blendstocks, discussed later. Myfreetaxes com achr Aviation gasoline. Myfreetaxes com achr   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. Myfreetaxes com achr Taxable Events The tax on gasoline is $. Myfreetaxes com achr 184 per gallon. Myfreetaxes com achr The tax on aviation gasoline is $. Myfreetaxes com achr 194 per gallon. Myfreetaxes com achr When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Myfreetaxes com achr 141 per gallon. Myfreetaxes com achr See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Myfreetaxes com achr Tax is imposed on the removal, entry, or sale of gasoline. Myfreetaxes com achr Each of these events is discussed later. Myfreetaxes com achr Also, see the special rules that apply to gasoline blendstocks, later. Myfreetaxes com achr If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Myfreetaxes com achr See Refunds of Second Tax in chapter 2. Myfreetaxes com achr Removal from terminal. Myfreetaxes com achr   All removals of gasoline at a terminal rack are taxable. Myfreetaxes com achr The position holder for that gasoline is liable for the tax. Myfreetaxes com achr Two-party exchanges. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Myfreetaxes com achr 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. Myfreetaxes com achr The transaction is subject to a written contract. Myfreetaxes com achr Terminal operator's liability. Myfreetaxes com achr   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. Myfreetaxes com achr   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Myfreetaxes com achr The terminal operator is a registrant. Myfreetaxes com achr The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Myfreetaxes com achr The terminal operator has no reason to believe any information on the certificate is false. Myfreetaxes com achr Removal from refinery. Myfreetaxes com achr   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Myfreetaxes com achr 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. Myfreetaxes com achr It is made at the refinery rack. Myfreetaxes com achr The refiner is liable for the tax. Myfreetaxes com achr Exception. Myfreetaxes com achr   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Myfreetaxes com achr The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Myfreetaxes com achr The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Myfreetaxes com achr The removal from the refinery is by railcar. Myfreetaxes com achr The same person operates the refinery and the facility at which the gasoline is received. Myfreetaxes com achr Entry into the United States. Myfreetaxes com achr   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Myfreetaxes com achr It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Myfreetaxes com achr It is not made by bulk transfer. Myfreetaxes com achr The enterer is liable for the tax. Myfreetaxes com achr Importer of record's liability. Myfreetaxes com achr   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. Myfreetaxes com achr   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Myfreetaxes com achr The importer of record has an unexpired notification certificate (discussed later) from the enterer. Myfreetaxes com achr The importer of record has no reason to believe any information in the certificate is false. Myfreetaxes com achr Customs bond. Myfreetaxes com achr   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. Myfreetaxes com achr Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Myfreetaxes com achr   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. Myfreetaxes com achr The position holder is liable for the tax. Myfreetaxes com achr The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Myfreetaxes com achr However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Myfreetaxes com achr Bulk transfers not received at approved terminal or refinery. Myfreetaxes com achr   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. Myfreetaxes com achr No tax was previously imposed (as discussed earlier) on any of the following events. Myfreetaxes com achr The removal from the refinery. Myfreetaxes com achr The entry into the United States. Myfreetaxes com achr The removal from a terminal by an unregistered position holder. Myfreetaxes com achr Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Myfreetaxes com achr   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Myfreetaxes com achr However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Myfreetaxes com achr The owner is a registrant. Myfreetaxes com achr The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Myfreetaxes com achr The owner has no reason to believe any information on the certificate is false. Myfreetaxes com achr The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Myfreetaxes com achr The operator is jointly and severally liable if the owner does not meet these conditions. Myfreetaxes com achr Sales to unregistered person. Myfreetaxes com achr   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. Myfreetaxes com achr   The seller is liable for the tax. Myfreetaxes com achr However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Myfreetaxes com achr   The seller is a registrant. Myfreetaxes com achr The seller has an unexpired notification certificate (discussed later) from the buyer. Myfreetaxes com achr The seller has no reason to believe any information on the certificate is false. Myfreetaxes com achr The buyer of the gasoline is liable for the tax if the seller meets these conditions. Myfreetaxes com achr The buyer is jointly and severally liable if the seller does not meet these conditions. Myfreetaxes com achr Exception. Myfreetaxes com achr   The tax does not apply to a sale if all of the following apply. Myfreetaxes com achr The buyer's principal place of business is not in the United States. Myfreetaxes com achr The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Myfreetaxes com achr The seller is a registrant and the exporter of record. Myfreetaxes com achr The fuel was exported. Myfreetaxes com achr Removal or sale of blended gasoline. Myfreetaxes com achr   The removal or sale of blended gasoline by the blender is taxable. Myfreetaxes com achr See Blended taxable fuel under Definitions, earlier. Myfreetaxes com achr   The blender is liable for the tax. Myfreetaxes com achr The tax is figured on the number of gallons not previously subject to the tax on gasoline. Myfreetaxes com achr   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. Myfreetaxes com achr See Form 720 to report this tax. Myfreetaxes com achr You also must be registered with the IRS as a blender. Myfreetaxes com achr See Form 637. Myfreetaxes com achr   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. Myfreetaxes com achr Notification certificate. Myfreetaxes com achr   The notification certificate is used to notify a person of the registration status of the registrant. Myfreetaxes com achr A copy of the registrant's letter of registration cannot be used as a notification certificate. Myfreetaxes com achr A model notification certificate is shown in the Appendix as Model Certificate C. Myfreetaxes com achr A notification certificate must contain all information necessary to complete the model. Myfreetaxes com achr   The certificate may be included as part of any business records normally used for a sale. Myfreetaxes com achr 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. Myfreetaxes com achr The registrant must provide a new certificate if any information on a certificate has changed. Myfreetaxes com achr Additional persons liable. Myfreetaxes com achr   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. Myfreetaxes com achr Gasoline Blendstocks Gasoline blendstocks may be subject to $. Myfreetaxes com achr 001 per gallon LUST tax as discussed below. Myfreetaxes com achr Gasoline includes gasoline blendstocks. Myfreetaxes com achr The previous discussions apply to these blendstocks. Myfreetaxes com achr However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Myfreetaxes com achr 001 per gallon or are not subject to the excise tax. Myfreetaxes com achr Blendstocks. Myfreetaxes com achr   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. Myfreetaxes com achr   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Myfreetaxes com achr Not used to produce finished gasoline. Myfreetaxes com achr   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Myfreetaxes com achr Removals and entries not connected to sale. Myfreetaxes com achr   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Myfreetaxes com achr Removals and entries connected to sale. Myfreetaxes com achr   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. Myfreetaxes com achr The person has an unexpired certificate (discussed later) from the buyer. Myfreetaxes com achr The person has no reason to believe any information in the certificate is false. Myfreetaxes com achr Sales after removal or entry. Myfreetaxes com achr   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Myfreetaxes com achr The seller is liable for the tax. Myfreetaxes com achr However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Myfreetaxes com achr The seller has an unexpired certificate (discussed next) from the buyer. Myfreetaxes com achr The seller has no reason to believe any information in the certificate is false. Myfreetaxes com achr Certificate of buyer. Myfreetaxes com achr   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Myfreetaxes com achr The certificate may be included as part of any business records normally used for a sale. Myfreetaxes com achr A model certificate is shown in the Appendix as Model Certificate D. Myfreetaxes com achr The certificate must contain all information necessary to complete the model. Myfreetaxes com achr   A certificate expires on the earliest of the following dates. Myfreetaxes com achr The date 1 year after the effective date (not earlier than the date signed) of the certificate. Myfreetaxes com achr The date a new certificate is provided to the seller. Myfreetaxes com achr The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Myfreetaxes com achr The buyer must provide a new certificate if any information on a certificate has changed. Myfreetaxes com achr   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. Myfreetaxes com achr Received at approved terminal or refinery. Myfreetaxes com achr   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. Myfreetaxes com achr The person is a registrant. Myfreetaxes com achr The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Myfreetaxes com achr The person has no reason to believe any information on the certificate is false. Myfreetaxes com achr Bulk transfers to registered industrial user. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr Credits or Refunds. Myfreetaxes com achr   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Myfreetaxes com achr For more information, see chapter 2. Myfreetaxes com achr Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Myfreetaxes com achr 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. Myfreetaxes com achr Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Myfreetaxes com achr 5 and No. Myfreetaxes com achr 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Myfreetaxes com achr An excluded liquid is either of the following. Myfreetaxes com achr A liquid that contains less than 4% normal paraffins. Myfreetaxes com achr A liquid with all the following properties. Myfreetaxes com achr Distillation range of 125 degrees Fahrenheit or less. Myfreetaxes com achr Sulfur content of 10 ppm or less. Myfreetaxes com achr Minimum color of +27 Saybolt. Myfreetaxes com achr Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Myfreetaxes com achr Kerosene. Myfreetaxes com achr   This means any of the following liquids. Myfreetaxes com achr One of the two grades of kerosene (No. Myfreetaxes com achr 1-K and No. Myfreetaxes com achr 2-K) covered by ASTM specification D3699. Myfreetaxes com achr 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). Myfreetaxes com achr See Kerosene for Use in Aviation, later. Myfreetaxes com achr   However, kerosene does not include excluded liquid, discussed earlier. Myfreetaxes com achr   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. Myfreetaxes com achr Diesel-powered highway vehicle. Myfreetaxes com achr   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. Myfreetaxes com achr Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Myfreetaxes com achr For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Myfreetaxes com achr 2) in chapter 2. Myfreetaxes com achr Diesel-powered train. Myfreetaxes com achr   This is any diesel-powered equipment or machinery that rides on rails. Myfreetaxes com achr The term includes a locomotive, work train, switching engine, and track maintenance machine. Myfreetaxes com achr Taxable Events The tax on diesel fuel and kerosene is $. Myfreetaxes com achr 244 per gallon. Myfreetaxes com achr It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Myfreetaxes com achr Each of these events is discussed later. Myfreetaxes com achr Only the $. Myfreetaxes com achr 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Myfreetaxes com achr 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. Myfreetaxes com achr See Refunds of Second Tax in chapter 2. Myfreetaxes com achr Use in certain intercity and local buses. Myfreetaxes com achr   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Myfreetaxes com achr A claim for $. Myfreetaxes com achr 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. Myfreetaxes com achr An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Myfreetaxes com achr The bus must be engaged in one of the following activities. Myfreetaxes com achr Scheduled transportation along regular routes regardless of the size of the bus. Myfreetaxes com achr Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Myfreetaxes com achr 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. Myfreetaxes com achr Removal from terminal. Myfreetaxes com achr   All removals of diesel fuel and kerosene at a terminal rack are taxable. Myfreetaxes com achr The position holder for that fuel is liable for the tax. Myfreetaxes com achr Two-party exchanges. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Myfreetaxes com achr 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. Myfreetaxes com achr The transaction is subject to a written contract. Myfreetaxes com achr Terminal operator's liability. Myfreetaxes com achr   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). Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr The terminal operator is a registrant. Myfreetaxes com achr The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Myfreetaxes com achr The terminal operator has no reason to believe any information on the certificate is false. Myfreetaxes com achr Removal from refinery. Myfreetaxes com achr   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Myfreetaxes com achr 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. Myfreetaxes com achr It is made at the refinery rack. Myfreetaxes com achr The refiner is liable for the tax. Myfreetaxes com achr Exception. Myfreetaxes com achr   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Myfreetaxes com achr The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Myfreetaxes com achr The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Myfreetaxes com achr 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. Myfreetaxes com achr Entry into the United States. Myfreetaxes com achr   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Myfreetaxes com achr It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Myfreetaxes com achr It is not made by bulk transfer. Myfreetaxes com achr The enterer is liable for the tax. Myfreetaxes com achr Importer of record's liability. Myfreetaxes com achr   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. Myfreetaxes com achr   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Myfreetaxes com achr The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Myfreetaxes com achr The importer of record has no reason to believe any information in the certificate is false. Myfreetaxes com achr Customs bond. Myfreetaxes com achr   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. Myfreetaxes com achr Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Myfreetaxes com achr   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. Myfreetaxes com achr The position holder is liable for the tax. Myfreetaxes com achr The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Myfreetaxes com achr However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Myfreetaxes com achr Bulk transfers not received at approved terminal or refinery. Myfreetaxes com achr   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. Myfreetaxes com achr No tax was previously imposed (as discussed earlier) on any of the following events. Myfreetaxes com achr The removal from the refinery. Myfreetaxes com achr The entry into the United States. Myfreetaxes com achr The removal from a terminal by an unregistered position holder. Myfreetaxes com achr 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). Myfreetaxes com achr   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Myfreetaxes com achr However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Myfreetaxes com achr The owner is a registrant. Myfreetaxes com achr 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. Myfreetaxes com achr The owner has no reason to believe any information on the certificate is false. Myfreetaxes com achr The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Myfreetaxes com achr The operator is jointly and severally liable if the owner does not meet these conditions. Myfreetaxes com achr Sales to unregistered person. Myfreetaxes com achr   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. Myfreetaxes com achr   The seller is liable for the tax. Myfreetaxes com achr However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Myfreetaxes com achr The seller is a registrant. Myfreetaxes com achr The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Myfreetaxes com achr The seller has no reason to believe any information on the certificate is false. Myfreetaxes com achr The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Myfreetaxes com achr The buyer is jointly and severally liable if the seller does not meet these conditions. Myfreetaxes com achr Exception. Myfreetaxes com achr   The tax does not apply to a sale if all of the following apply. Myfreetaxes com achr The buyer's principal place of business is not in the United States. Myfreetaxes com achr The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Myfreetaxes com achr The seller is a registrant and the exporter of record. Myfreetaxes com achr The fuel was exported. Myfreetaxes com achr Removal or sale of blended diesel fuel or kerosene. Myfreetaxes com achr   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Myfreetaxes com achr Blended taxable fuel produced using biodiesel is subject to the tax. Myfreetaxes com achr See Blended taxable fuel under Definitions, earlier. Myfreetaxes com achr   The blender is liable for the tax. Myfreetaxes com achr The tax is figured on the number of gallons not previously subject to the tax. Myfreetaxes com achr   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. Myfreetaxes com achr Generally, the biodiesel mixture must be diesel fuel (defined earlier). Myfreetaxes com achr See Form 720 to report this tax. Myfreetaxes com achr You also must be registered by the IRS as a blender. Myfreetaxes com achr See Form 637 for more information. Myfreetaxes com achr   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. Myfreetaxes com achr Additional persons liable. Myfreetaxes com achr   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. Myfreetaxes com achr Credits or Refunds. Myfreetaxes com achr   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Myfreetaxes com achr For more information, see chapter 2. Myfreetaxes com achr Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Myfreetaxes com achr 001 per gallon LUST tax as discussed below, unless the fuel is for export. Myfreetaxes com achr 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. Myfreetaxes com achr The person otherwise liable for tax (for example, the position holder) is a registrant. Myfreetaxes com achr In the case of a removal from a terminal, the terminal is an approved terminal. Myfreetaxes com achr The diesel fuel or kerosene satisfies the dyeing requirements (described next). Myfreetaxes com achr Dyeing requirements. Myfreetaxes com achr   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Myfreetaxes com achr It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Myfreetaxes com achr 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. Myfreetaxes com achr Is indelibly dyed by mechanical injection. Myfreetaxes com achr See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Myfreetaxes com achr Notice required. Myfreetaxes com achr   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. Myfreetaxes com achr   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. Myfreetaxes com achr   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). Myfreetaxes com achr That seller is subject to the penalty described next. Myfreetaxes com achr Penalty. Myfreetaxes com achr   A penalty is imposed on a person if any of the following situations apply. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Myfreetaxes com achr 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. Myfreetaxes com achr   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Myfreetaxes com achr After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Myfreetaxes com achr   This penalty is in addition to any tax imposed on the fuel. Myfreetaxes com achr   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. Myfreetaxes com achr   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. Myfreetaxes com achr   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Myfreetaxes com achr However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Myfreetaxes com achr 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. Myfreetaxes com achr Exception to penalty. Myfreetaxes com achr   The penalty under item (3) will not apply in any of the following situations. Myfreetaxes com achr Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Myfreetaxes com achr 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. Myfreetaxes com achr The alteration or attempted alteration occurs in an exempt area of Alaska. Myfreetaxes com achr See Removal for sale or use in Alaska, later. Myfreetaxes com achr 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. Myfreetaxes com achr Alaska and Feedstocks Tax of $. Myfreetaxes com achr 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). Myfreetaxes com achr Undyed kerosene used for feedstock purposes. Myfreetaxes com achr Removal for sale or use in Alaska. Myfreetaxes com achr   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. Myfreetaxes com achr The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Myfreetaxes com achr 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. Myfreetaxes com achr In the case of a removal from a terminal, the terminal is an approved terminal. Myfreetaxes com achr 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. Myfreetaxes com achr   If all three of the requirements above are not met, then tax is imposed at $. Myfreetaxes com achr 244 per gallon. Myfreetaxes com achr   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. Myfreetaxes com achr Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Myfreetaxes com achr Later sales. Myfreetaxes com achr   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Myfreetaxes com achr The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Myfreetaxes com achr However, the sale is not taxable (other than the LUST tax at $. Myfreetaxes com achr 001 per gallon) if all the following requirements are met. Myfreetaxes com achr The fuel is sold in Alaska for certain nontaxable uses. Myfreetaxes com achr The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Myfreetaxes com achr The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Myfreetaxes com achr Feedstock purposes. Myfreetaxes com achr   The $. Myfreetaxes com achr 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Myfreetaxes com achr The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Myfreetaxes com achr In the case of a removal from a terminal, the terminal is an approved terminal. Myfreetaxes com achr 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. Myfreetaxes com achr   If all of the requirements above are not met, then tax is imposed at $. Myfreetaxes com achr 244 per gallon. Myfreetaxes com achr   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Myfreetaxes com achr For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Myfreetaxes com achr A feedstock user is a person that uses kerosene for a feedstock purpose. Myfreetaxes com achr A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Myfreetaxes com achr See Registration Requirements, earlier. Myfreetaxes com achr Later sales. Myfreetaxes com achr   The excise tax ($. Myfreetaxes com achr 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. Myfreetaxes com achr The tax is imposed at the time of the later sale and that seller is liable for the tax. Myfreetaxes com achr Certificate. Myfreetaxes com achr   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. Myfreetaxes com achr The certificate may be included as part of any business records normally used for a sale. Myfreetaxes com achr A model certificate is shown in the Appendix as Model Certificate G. Myfreetaxes com achr Your certificate must contain all information necessary to complete the model. Myfreetaxes com achr   A certificate expires on the earliest of the following dates. Myfreetaxes com achr The date 1 year after the effective date (not earlier than the date signed) of the certificate. Myfreetaxes com achr The date the seller is provided a new certificate or notice that the current certificate is invalid. Myfreetaxes com achr The date the seller is notified the buyer's registration has been revoked or suspended. Myfreetaxes com achr   The buyer must provide a new certificate if any information on a certificate has changed. Myfreetaxes com achr 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. Myfreetaxes com achr Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Myfreetaxes com achr Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Myfreetaxes com achr Any liquid other than gasoline, diesel fuel, or kerosene. Myfreetaxes com achr Generally, this back-up tax is imposed at a rate of $. Myfreetaxes com achr 244 per gallon. Myfreetaxes com achr Liability for tax. Myfreetaxes com achr   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Myfreetaxes com achr 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. Myfreetaxes com achr Exemptions from the back-up tax. Myfreetaxes com achr   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. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr A reduced tax rate of $. Myfreetaxes com achr 198 per gallon is imposed on a diesel-water fuel emulsion. Myfreetaxes com achr 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. Myfreetaxes com achr 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 $. Myfreetaxes com achr 244 per gallon. Myfreetaxes com achr Credits or refunds. Myfreetaxes com achr   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Myfreetaxes com achr Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Myfreetaxes com achr 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Myfreetaxes com achr For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Myfreetaxes com achr 219. Myfreetaxes com achr The rate of $. Myfreetaxes com achr 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. Myfreetaxes com achr The airport terminal does not need to be a secured airport terminal for this rate to apply. Myfreetaxes com achr 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. Myfreetaxes com achr For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Myfreetaxes com achr 044 per gallon. Myfreetaxes com achr For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Myfreetaxes com achr 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. Myfreetaxes com achr See Terminal located within a secured area of an airport, later. Myfreetaxes com achr In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Myfreetaxes com achr 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 $. Myfreetaxes com achr 001. Myfreetaxes com achr There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Myfreetaxes com achr 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. Myfreetaxes com achr See Terminal located within a secured area of an airport, later. Myfreetaxes com achr In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Myfreetaxes com achr The position holder is liable for the $. Myfreetaxes com achr 001 per gallon tax. Myfreetaxes com achr For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Myfreetaxes com achr 141 per gallon applies. Myfreetaxes com achr Certain refueler trucks, tankers, and tank wagons treated as terminals. Myfreetaxes com achr   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. Myfreetaxes com achr Such terminal is located within an area of an airport. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr Information reporting will be required by terminal operators regarding this provision. Myfreetaxes com achr 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. Myfreetaxes com achr Terminal located within a secured area of an airport. Myfreetaxes com achr   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Myfreetaxes com achr 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. Myfreetaxes com achr 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 $. Myfreetaxes com achr 044 per gallon. Myfreetaxes com achr 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). Myfreetaxes com achr For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Myfreetaxes com achr For the aircraft operator to be liable for the tax $. Myfreetaxes com achr 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. Myfreetaxes com achr Commercial aviation. Myfreetaxes com achr   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Myfreetaxes com achr However, commercial aviation does not include any of the following uses. Myfreetaxes com achr Any use exclusively for the purpose of skydiving. Myfreetaxes com achr Certain air transportation by seaplane. Myfreetaxes com achr See Seaplanes under Transportation of Persons by Air in chapter 4. Myfreetaxes com achr Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Myfreetaxes com achr For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Myfreetaxes com achr 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. Myfreetaxes com achr For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Myfreetaxes com achr Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Myfreetaxes com achr See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Myfreetaxes com achr 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 $. Myfreetaxes com achr 141 per gallon. Myfreetaxes com achr The fractional ownership program manager is liable for the tax. Myfreetaxes com achr The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Myfreetaxes com achr If the surtax is imposed, the following air transportation taxes do not apply. Myfreetaxes com achr Transportation of persons by air. Myfreetaxes com achr Transportation of property by air. Myfreetaxes com achr Use of international air travel facilities. Myfreetaxes com achr These taxes are described under Air Transportation Taxes, later. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr Fractional program aircraft. Myfreetaxes com achr   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. Myfreetaxes com achr S. Myfreetaxes com achr   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. Myfreetaxes com achr In such situations, the flight is not commercial aviation. Myfreetaxes com achr Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Myfreetaxes com achr Fractional owner. Myfreetaxes com achr   Any person owning any interest (including the entire interest) in a fractional program aircraft. Myfreetaxes com achr Dry lease aircraft exchange. Myfreetaxes com achr   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. Myfreetaxes com achr Special rule relating to deadhead service. Myfreetaxes com achr   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. Myfreetaxes com achr More information. Myfreetaxes com achr   See section 4043 for more information on the surtax. Myfreetaxes com achr 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. Myfreetaxes com achr Certificate. Myfreetaxes com achr   The certificate may be included as part of any business records normally used for a sale. Myfreetaxes com achr See Model Certificate K in the Appendix. Myfreetaxes com achr   A certificate expires on the earliest of the following dates. Myfreetaxes com achr The date 1 year after the effective date (not earlier than the date signed) of the certificate. Myfreetaxes com achr The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Myfreetaxes com achr The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Myfreetaxes com achr   The buyer must provide a new certificate if any information on a certificate has changed. Myfreetaxes com achr   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. Myfreetaxes com achr Exempt use. Myfreetaxes com achr   The rate on kerosene for use in aviation is $. Myfreetaxes com achr 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Myfreetaxes com achr An exempt use includes kerosene for the exclusive use of a state or local government. Myfreetaxes com achr There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Myfreetaxes com achr Flash title transaction. Myfreetaxes com achr   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. Myfreetaxes com achr 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. Myfreetaxes com achr 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. Myfreetaxes com achr Reseller statement. Myfreetaxes com achr   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. Myfreetaxes com achr Credits or Refunds. Myfreetaxes com achr   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). Myfreetaxes com achr A claim may be made by a registered ultimate vendor for certain sales. Myfreetaxes com achr For more information, see chapter 2. Myfreetaxes com achr Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Myfreetaxes com achr Other Fuels include alternative fuels. Myfreetaxes com achr 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. Myfreetaxes com achr Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Myfreetaxes com achr Qualified methanol and ethanol fuels. Myfreetaxes com achr   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Myfreetaxes com achr The tax rates are listed in the Instructions for Form 720. Myfreetaxes com achr Partially exempt methanol and ethanol fuels. Myfreetaxes com achr   A reduced tax rate applies to these fuels. Myfreetaxes com achr Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Myfreetaxes com achr The tax rates are listed in the Instructions for Form 720. Myfreetaxes com achr Motor vehicles. Myfreetaxes com achr   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. Myfreetaxes com achr They are propelled by a motor. Myfreetaxes com achr They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t