To amend the Internal Revenue Code of 1986 to consolidate the retail level and refinery level taxes on aviation gasoline by imposing the entire tax at the refinery level.

Summary: Amends the Internal Revenue Code to impose a tax on aviation gasoline at the refinery level.  Repeals such tax at the retail level.

SECTION 1. CONSOLIDATION OF TAXES ON AVIATION GASOLINE.

    (a) In General.--Subparagraph (A) of section 4081(a)(2) of the 
Internal Revenue Code of 1986 (relating to imposition of tax on 
gasoline and diesel fuel) is amended by redesignating clause (ii) as 
clause (iii) and by striking clause (i) and inserting the following:
                            ``(i) in the case of gasoline other than 
                        aviation gasoline, 18.3 cents per gallon,
                            ``(ii) in the case of aviation gasoline, 
                        19.3 cents per gallon, and''.
    (b) Termination.--Subsection (d) of section 4081 of such Code is 
amended by redesignating paragraph (2) as paragraph (3) and by 
inserting after paragraph (1) the following new paragraph:
            ``(2) Aviation gasoline.--On and after January 1, 1996, the 
        rate specified in subsection (a)(2)(A)(ii) shall be 4.3 cents 
        per gallon.''
    (c) Repeal of Retail Level Tax.--
            (1) Subsection (c) of section 4041 of such Code is amended 
        by striking paragraphs (2) and (3) and by redesignating 
        paragraphs (4) and (5) as paragraphs (2) and (3), respectively.
            (2) Paragraph (3) of section 4041(c) of such Code, as 
        redesignated by paragraph (1), is amended by striking 
        ``paragraphs (1) and (2)'' and inserting ``paragraph (1)''.
    (d) Conforming Amendments.--
            (1) Paragraph (1) of section 4041(k) of such Code is 
        amended by adding ``and'' at the end of subparagraph (A), by 
        striking ``, and'' at the end of subparagraph (B) and inserting 
        a period, and by striking subparagraph (C).
            (2) Paragraph (1) of section 4081(d) of such Code is 
        amended by striking ``each rate of tax specified in subsection 
        (a)(2)(A)'' and inserting ``the rates of tax specified in 
        clauses (i) and (iii) of subsection (a)(2)(A)''.
            (3) Sections 6421(f)(2)(A) and 9502(f)(1)(A) of such Code 
        are each amended by striking ``section 4041(c)(4)'' and 
        inserting ``section 4041(c)(2)''.
            (4) Paragraph (2) of section 9502(b) of such Code is 
        amended by striking ``14 cents'' and inserting ``15 cents''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on October 1, 1994.
    (f) Floor Stocks Tax.--
            (1) Imposition of tax.--In the case of aviation gasoline on 
        which tax was imposed under section 4081 of such Code before 
        October 1, 1994, and which is held on such date by any person, 
        there is hereby imposed a floor stocks tax of 1 cent per gallon 
        of such gasoline.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding aviation 
                gasoline on October 1, 1994, to which the tax imposed 
                by paragraph (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before March 31, 1995.
            (3) Definitions.--For purposes of this subsection:
                    (A) Held by a person.--Gasoline shall be considered 
                as ``held by a person'' if title thereto has passed to 
                such person (whether or not delivery to the person has 
                been made).
                    (B) Secretary.--The term `Secretary' means the 
                Secretary of the Treasury or his delegate.
            (4) Exception for exempt uses.--The tax imposed by 
        paragraph (1) shall not apply to gasoline held by any person 
        exclusively for any use to the extent a credit or refund of the 
        tax imposed by section 4081 of such Code is allowable for such 
        use.
            (5) Exception for fuel held in aircraft tank.--No tax shall 
        be imposed by paragraph (1) on aviation gasoline held in the 
        tank of an aircraft.
            (6) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1) on aviation gasoline held on October 1, 
                1994, by any person if the aggregate amount of aviation 
                gasoline held by such person on such date does not 
                exceed 6,000 gallons. The preceding sentence shall 
                apply only if such person submits to the Secretary (at 
                the time and in the manner required by the Secretary) 
                such information as the Secretary shall require for 
                purposes of this paragraph.
                    (B) Exempt fuel.--For purposes of subparagraph (A), 
                there shall not be taken into account fuel held by any 
                person which is exempt from the tax imposed by 
                paragraph (1) by reason of paragraph (4) or (5).
                    (C) Controlled groups.--
                            (i) Corporations.--In the case of a 
                        controlled group, the 6,000 gallon amount in 
                        subparagraph (A) shall be apportioned among the 
                        component members of such group in such manner 
                        as the Secretary shall by regulations 
                        prescribe. For purposes of the preceding 
                        sentence, the term ``controlled group'' has the 
                        meaning given to such term by subsection (a) of 
                        section 1563 of such Code; except that for such 
                        purposes the phrase ``more than 50 percent'' 
                        shall be substituted for the phrase ``at least 
                        80 percent'' each place it appears in such 
                        subsection.
                            (ii) Nonincorporated persons under common 
                        control.--Under regulations prescribed by the 
                        Secretary, principles similar to the principles 
                        of clause (i) shall apply to a group under 
                        common control where 1 or more of the members 
                        is not a corporation.
            (7) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 4081 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply with respect to the floor stock taxes imposed 
        by paragraph (1) to the same extent as if such taxes were 
        imposed by such section 4081.