Publication 510 Contents (Rev. February 2003)

Cat. No. 15014I Important Changes ................ 2 Department

of the Important Reminders .............. 2 Treasury

Internal Excise Taxes Introduction ..................... 2

Revenue

Service Excise Taxes Not Covered .......... 2 for 2003

Registration for Certain Activities ..... 2

Environmental Taxes .............. 2

ODCs ...................... 3

Imported Taxable Products ........ 3

Floor Stocks Tax ............... 4

Communications and Air

Transportation Taxes ........... 4

Communications Tax ............ 4

Air Transportation Taxes .......... 5

Fuel Taxes ...................... 7

Information Returns ............. 8

Registration Requirements ......... 8

Refunds of Second Tax ........... 8

Definitions ................... 8

Gasoline ..................... 9

Gasohol ..................... 11

Diesel Fuel and Kerosene ......... 12

Aviation Fuel .................. 16

Special Motor Fuels ............. 17

Compressed Natural Gas ......... 18

Fuels Used on Inland Waterways .... 18

Alcohol Sold as Fuel But Not

Used as Fuel ............... 19

Manufacturers Taxes .............. 19

Taxable Event ................. 20

Exemptions ................... 20

Credits or Refunds .............. 20

Sport Fishing Equipment .......... 21

Bows ....................... 21

Arrow Components .............. 21

Coal ....................... 21

Tires ....................... 22

Gas Guzzler Tax ............... 22

Vaccines .................... 23

Retail Tax on Heavy Trucks,

Trailers, and Tractors ........... 23

Ship Passenger Tax ............... 26

Foreign Insurance Taxes ........... 26

Obligations Not in Registered

Form ....................... 27

Filing Form 720 .................. 27

Paying the Taxes ................. 27

Credits and Refunds ............... 29

Tax on Wagering ................. 29

Penalties and Interest .............. 30

Examination and Appeal

Procedures .................. 30

Rulings Program ................. 30

How To Get Tax Help .............. 31
Appendix A ..................... 32 Comments and suggestions. We welcome • ATF Form 5630.5: Alcohol, Tobacco.

your comments about this publication and your • ATF Form 5630.7: Firearms. Appendix B ..................... 33 suggestions for future editions.

You can e-mail us while visiting our web site • ATF Form 5300.26: Firearms.

Appendix C ..................... 38 at www.irs.gov. See the following discussion for information on

You can write to us at the following address: Form 2290. See Appendix A at the end of this Index .......................... 47

publication for information on the ATF forms.

Internal Revenue Service

Tax Forms and Publications IRS Form 2290:

W:CAR:MP:FP Important Changes Highway Use Tax 1111 Constitution Ave. NW

Washington, DC 20224 You report the federal excise tax on the use of New tax rates. The tax rates for gasohol and certain trucks, truck tractors, and buses on pub- for gasoline removed or entered for the produc- We respond to many letters by telephone. lic highways on Form 2290, or Form 2290–EZ if tion of gasohol have increased for 2003. See Therefore, it would be helpful if you would in- you qualify. The tax applies to highway motor Form 720 for the new rates that apply to these clude your daytime phone number, including the vehicles with taxable gross weights of 55,000 fuels. area code, in your correspondence. pounds or more. Vans, pickup trucks, panel

trucks, and similar trucks generally are not sub- Air transportation taxes. For amounts paid Useful Items ject to this tax. during 2003, the tax on the use of international You may want to see: air travel facilities is $13.40 for flights that begin Note: A Spanish version of Form 2290 and or end in the United States or $6.70 for domestic its instructions (Form 2290SP) are also avail- Publication segments that begin or end in Alaska or Hawaii able.

(applies only to departures). ❏ 378 Fuel Tax Credits and Refunds A public highway is any road in the United

States that is not a private roadway. This in- Termination of luxury car tax. The luxury tax ❏ 509 Tax Calendars for 2003

cludes federal, state, county, and city roads. on a passenger vehicle does not apply after Canadian and Mexican heavy vehicles operated Form (and Instructions) 2002. on U.S. highways may be subject to this tax. For

❏ 11–C Occupational Tax and Registration more information, get the instructions for Form

Return for Wagering 2290.

❏ 637 Application for Registration (For Important Reminders Registration of vehicles. Generally, you Certain Excise Tax Activities) must prove that you paid your federal highway

Deposit threshold. You do not have to de- ❏ 720 Quarterly Federal Excise Tax use tax when registering your taxable vehicle

Return with your state motor vehicle department or en- posit excise taxes for a calendar quarter if the tering the United States in a Canadian or Mexi- net tax liability for the quarter is not more than ❏ 720–TO Terminal Operator Report can registered taxable vehicle. Generally, a $2,500. ❏ 720–CS Carrier Summary Report copy of Schedule 1 of Form 2290 or Form

Deposit due dates. One deposit rule, the reg- 2290–EZ, stamped after payment and returned ❏ 720X Amended Quarterly Federal Excise ular method, applies for all taxes that have to be to you by the IRS, is acceptable proof of pay- Tax Return

deposited other than those deposited under the ment.

❏ 730 Monthly Tax Return on Wagering alternative method. See When To Make Deposits under Paying the Taxes, later. ❏ 1363 Export Exemption Certificate

Amount to deposit and safe harbor rule. ❏ 2290 Heavy Highway Vehicle Use Tax Registration for Your deposit of taxes for a semimonthly period Return

generally must be at least 95% of your net tax ❏ 2290–EZ Heavy Highway Vehicle Use Certain Activities

liability incurred during that period, unless the Tax Return for Filers With a Single

safe harbor rule applies. See Amount of Depos- You must register for certain excise tax activi- Vehicle

ties. See the instructions for Form 637 for the list its and Safe Harbor Rule under Paying the ❏ 4136 Credit for Federal Tax Paid on of activities for which you must register. Each Taxes, later. Fuels business unit that has, or is required to have, a

Amended Form 720. Use Form 720X to make ❏ separate employer identification number must 6197 Gas Guzzler Tax

adjustments to liability reported on Forms 720 register.

filed for previous quarters. ❏ 6478 Credit for Alcohol Used as Fuel To apply for registration, complete Form 637

❏ and provide the information requested in its in- 6627 Environmental Taxes Photographs of missing children. The Inter- structions. If your application is approved, you

nal Revenue Service is a proud partner with the ❏ 8849 Claim for Refund of Excise Taxes will receive a Letter of Registration showing the

National Center for Missing and Exploited Chil- See How To Get Tax Help activities for which you are registered, the effec- near the end of

dren. Photographs of missing children selected this publication for information about getting tive date of the registration, and your registration

by the Center may appear in this publication on publications and forms. number. A copy of Form 637 is not a Letter of

pages that would otherwise be blank. You can Registration.

help bring these children home by looking at the

photographs and calling 1–800–THE–LOST

(1–800–843– 5678) if you recognize a child. Excise Taxes Environmental Taxes

Not Covered

Environmental taxes are imposed on the sale or

use of ozone-depleting chemicals (ODCs) Introduction In addition to the taxes discussed in this publica- and imported products containing or manufac- tion, you may have to use other forms to report This publication covers the excise taxes for tured with these chemicals. In addition, a floor certain other excise taxes.

which you may be liable during 2003. It covers stocks tax is imposed on ODCs held on January These forms are as follows. the excise taxes reported on Form 720. It also 1 by any person (other than the manufacturer or

provides information on wagering activities re- • IRS Form 2290: Heavy Highway Vehicle importer of the ODCs) for sale or for use in

ported on Forms 11–C and 730. Use Tax Return. further manufacture.

Page 2
Figure the environmental tax on Form 6627. that has signed the Montreal Protocol on Sub- • The actual (exact) weight of each ODC Enter the tax on the appropriate lines of Form stances that Deplete the Ozone Layer (Montreal used as a material in manufacturing the 720. Attach Form 6627 to Form 720 as a sup- Protocol). product. porting schedule. The Montreal Protocol is administered by the For environmental tax purposes, United United Nations (U.N.). To determine if a country • If the actual weight cannot be determined,

States includes the 50 states, the District of the ODC weight listed for the product in has signed the Montreal Protocol, contact the Columbia, the Commonwealth of Puerto Rico, the Imported Products Table, discussed U.N. The Internet address is http:// any possession of the United States, the Com- later. untreaty.un.org/. monwealth of the Northern Mariana Islands, the

Trust Territory of the Pacific Islands, the conti- Exported ODCs. Generally, there is no tax However, if you cannot determine the actual

nental shelf areas (applying the principles of on ODCs sold for export if certain requirements weight and the table does not list an ODC weight

section 638 of the Internal Revenue Code), and are met. For a sale to be nontaxable, you and for the product, the rate of tax is 1% of the entry

foreign trade zones. No one is exempt from the the purchaser must be registered. You must value of the product.

environmental taxes, including the federal gov- obtain from the purchaser an exemption certifiernment, state and local governments, Indian cate that you rely on in good faith. Keep the

tribal governments, and nonprofit educational certificate with your records. The certificate must Taxable Event

organizations. be in substantially the form set forth in section Tax is imposed on an imported taxable product 52.4682–5(d)(3) of the regulations. The tax when the product is first sold or used by its ODCs benefit of this exemption is limited. For more importer. The importer is liable for the tax. information, see section 52.4682–5 of the reguFor the taxable ODCs and tax rates, see the lations. Use of imported products. You use an im- Form 6627 instructions. ODCs used as feedstock. There is no tax ported product if you put it into service in a trade

on ODCs sold for use or used as a feedstock. An or business or for the production of income or

ODC is used as a feedstock only if the ODC is use it in the making of an article, including incor- Taxable Event

entirely consumed in the manufacture of another poration into the article. The loss, destruction,

Tax is imposed on an ODC when it is first used packaging, repackaging, warehousing, or repair chemical. The transformation of an ODC into

or sold by its manufacturer or importer. The of an imported product is not a use of that prod- one or more new compounds qualifies, but use

manufacturer or importer is liable for the tax. uct. of an ODC in a mixture does not qualify.

For a sale to be nontaxable, you must obtain Use of ODCs. You use an ODC if you put it Entry as use. The importer may choose to from the purchaser an exemption certificate that into service in a trade or business or for the treat the entry of a product into the United States you rely on in good faith. The certificate must be production of income. An ODC also is used if as the use of the product. Tax is imposed on the in substantially the form set forth in section you use it in the making of an article, including date of entry instead of when the product is sold 52.4682–2(d)(2) of the regulations. Keep the incorporation into the article, chemical transfor- or used. The choice applies to all imported taxa- certificate with your records. mation, or release into the air. The loss, destruc- ble products that you own and have not used

when you make the choice and all later entries. tion, packaging, repackaging, or warehousing of

ODCs is not a use of the ODC. Make the choice by checking the box in Part II of Credits or Refunds The creation of a mixture containing an ODC Form 6627. The choice is effective as of the

is treated as the use of that ODC. An ODC is beginning of the calendar quarter to which the A credit or refund (without interest) of tax paid on contained in a mixture only if the chemical iden- Form 6627 applies. You can revoke this choice ODCs may be claimed in the following situa- only with IRS consent. tity of the ODC is not changed. Generally, tax is tions. imposed when the mixture is created and not on Sale of article incorporating imported prod- its sale or use. However, you can choose to • If a taxed ODC is used as a propellant in a uct. The importer may treat the sale of an have the tax imposed on its sale or use by metered-dose inhaler, then the person article manufactured or assembled in the United checking the appropriate box in Part I of Form who used the ODC as a propellant may States as the first sale or use of an imported 6627. You can revoke this choice only with IRS file a claim. taxable product incorporated in that article if consent. • If a taxed ODC is exported, then the man- both the following apply. The creation of a mixture for export or for use ufacturer may file a claim. as a feedstock is not a taxable use of the ODCs • The importer has consistently treated the contained in the mixture. • If a taxed ODC is used as a feedstock, sale of similar items as the first sale or use

then the person who used the ODC may of similar taxable imported products. Exceptions. The following may be exempt file a claim. from the tax on ODCs. • The importer has not chosen to treat entry

For general information about credits and re- into the United States as use of the prod- • Metered-dose inhalers. funds, see Credits and Refunds, later. uct.

• Recycled ODCs.

Conditions to allowance for ODCs exported. • Exported ODCs. To claim a credit or refund for ODCs that are Imported Products Table

• ODCs used as feedstock. exported, you must have repaid or agreed to The Imported Products Table appears in Appen- repay the tax to the exporter, or obtained the dix B at the end of this publication. The table lists Metered-dose inhalers. There is no tax on exporter’s written consent to allowance of the all the products that are subject to the tax on ODCs used or sold for use as propellants in credit or refund. You must also have the evi- imported taxable products and specifies the metered-dose inhalers. For a sale to be nontax- dence required by the Environmental Protection ODC weight of each product (discussed later). able, you must obtain from the purchaser an Agency as proof that the ODCs were exported. Each listing in the table identifies a product exemption certificate that you rely on in good by name and includes only products that are faith. The certificate must be in substantially the Imported Taxable Products described by that name. Most listings identify a form set forth in section 52.4682–2(d)(5) of the product by both name and Harmonized Tariff regulations. Keep the certificate with your rec- An imported product containing or manufac- Schedule (HTS) heading. In those cases, a ords. tured with ODCs is subject to tax if it is entered product is included in that listing only if the prodRecycled ODCs. into the United States for consumption, use, or There is no tax on any uct is described by that name and the rate of

ODC diverted or recovered in the United States duty on the product is determined by reference warehousing and is listed in the Imported Prodas part of a recycling process (and not as part of to that HTS heading. A product is included in the ucts Table, discussed later.

the original manufacturing or production pro- listing even if it is manufactured with or contains The tax is based on the weight of the ODCs

cess). There is no tax on recycled Halon-1301 or a different ODC than the one specified in the used in the manufacture of the product. Use the

recycled Halon-2402 imported from a country following methods to figure the ODC weight. table.

Page 3
Part II of the table lists electronic items that Send your request to the following adare not included within any other list in the table. dress. Communications and

An imported product is included in this list only if

the product meets one of the following tests. Air Transportation

Internal Revenue Service 1) It is an electronic component whose oper- Taxes

ation involves the use of nonmechanical P.O. Box 7604

amplification or switching devices such as Ben Franklin Station Excise taxes are imposed on amounts paid by

tubes, transistors, and integrated circuits. Attn: CC:PA:RU the users of certain facilities and services. If you

(Imported Products Table) receive any payment on which tax is imposed, 2) It contains components described in (1), Room 5226 you are required to collect the tax, file returns, which account for more than 15% of the

Washington, DC 20044 and pay the tax over to the government. cost of the product. If you fail to collect and pay over the taxes,

These components do not include passive you may be liable for the trust fund recovery

electrical devices, such as resistors and capaci- Floor Stocks Tax penalty. See Penalties and Interest, later.

tors. Items such as screws, nuts, bolts, plastic

parts, and similar specially fabricated parts that Tax is imposed on any ODC held (other than by Communications Tax may be used to construct an electronic item are the manufacturer or importer of the ODC) on

not themselves included in the listing for elec- January 1 for sale or use in further manufactur- A 3% tax is imposed on amounts paid for all the tronic items. ing. The person holding title (as determined following communications services.

Rules for listing products. Products are under local law) to the ODC is liable for the tax, • Local telephone service. whether or not delivery has been made. listed in the table according to the following • Toll telephone service. rules. These chemicals are taxable without regard

• Teletypewriter exchange service. to the type or size of storage container in which 1) A product is listed in Part I of the table if it

the ODCs are held. The tax may apply to an is a mixture containing ODCs. ODC whether it is in a 14-ounce can or a Local telephone service. This means ac- 2) A product is listed in Part II of the table if 30-pound tank. cess to a local telephone system and the privi- the Commissioner has determined that the

You are liable for the floor stocks tax if you lege of telephonic quality communication with ODCs used as materials in the manufacmost people who are part of the system. Local ture of the product under the predominant hold any of the following on January 1. 

method are used for purposes of refrigera- telephone service also includes any facility or

services provided in connection with this serv- tion or air conditioning, creating an aerosol 1) At least 400 pounds of ODCs subject to ice. The tax applies to lease payments for cer- or foam, or manufacturing electronic com- tax and not described in item (2) or (3). tain customer premises equipment (CPE) even ponents. 2) At least 50 pounds of ODCs that are though the lessor does not also provide access

3) A product is listed in Part III of the table if halons subject to tax. to a local telecommunications system.

the Commissioner has determined that the

3) At least 1,000 pounds of ODCs that are Private communication service. Private product meets both the following tests.

methyl chloroform subject to tax. communication service is not local telephone

a) It is not an imported taxable product. service. Private communication service includes

If you are liable for the tax, prepare an inven- accessory-type services provided in connection b) It would otherwise be included within a tory on January 1 of the taxable ODCs held on with a Centrex, PBX, or other similar system for list in Part II of the table. that date for sale or for use in further manufac- dual use accessory equipment. However, the

turing. You must pay this floor stocks tax by charge for the service must be stated separately For example, floppy disk drive units are listed June 30 of each year. Report the tax on Form from the charge for the basic system, and the in Part III because they are not imported taxable accessory must function, in whole or in part, in 6627 and Form 720 for the second calendar products and would have been included in the connection with intercommunication among the Part II list for electronic items not specifically quarter. subscriber’s stations. identified, but for their listing in Part III. For the tax rates, see the Form 6627 instrucToll telephone service. This means a tele- ODC weight. The Table ODC weight of a tions.

phonic quality communication for which a toll is product is the weight, determined by the Commissioner, of the ODCs used as materials in the charged that varies with the distance and

manufacture of the product under the predomi- ODCs not subject to floor stocks tax. The elapsed transmission time of each communicafloor stocks tax is not imposed on any of the tion. The toll must be paid within the United nant method of manufacturing. The ODC weight

following ODCs. States. It also includes a long distance service is listed in Part II in pounds per single unit of that entitles the subscriber to make unlimited product unless otherwise specified. calls (sometimes limited as to the maximum 1) ODCs mixed with other ingredients that Modifying the table. A manufacturer or im- number of hours) within a certain area for a flat contribute to achieving the purpose for porter of a product may request the IRS add a charge. Microwave relay service used for the which the mixture will be used, unless the product and its ODC weight to the table. They transmission of television programs and not for

also may request the IRS remove a product from mixture contains only ODCs and one or telephonic communication is not a toll telephone

the table, or change or specify the ODC weight more stabilizers. service.

of a product. 2) ODCs contained in a manufactured article Include your name, address, taxpayer identi- Teletypewriter exchange service. This in which the ODCs will be used for their means access from a teletypewriter or other fication number, and principal place of business intended purpose without being released in your request. The request must include the data station to a teletypewriter exchange system

from the article. and the privilege of intercommunication by that following information for each product to be

modified. station with most persons having teletypewriter 3) ODCs that have been reclaimed or re- or other data stations in the same exchange cycled. • The name of the product. system.

4) ODCs sold in a qualifying sale for: • The HTS heading or subheading. Figuring the tax. The tax is based on the sum

• The type of modification requested. a) Use as a feedstock, of all charges for local or toll telephone service

included in the bill. However, if the bill groups • The ODC weight that should be specified b) Export, or individual items for billing and tax purposes, the (unless the product is being removed). c) Use as a propellant in a metered-dose tax is based on the sum of the individual items

• The data supporting the request. inhaler. within that group. The tax on the remaining items

Page 4
not included in any group is based on the charge service furnishing a general news service educational organization is one that satisfies all

for each item separately. Do not include in the similar to that of the public press. the following requirements.

tax base state or local sales or use taxes that are This exemption applies to payments received for • It normally maintains a regular faculty and separately stated on the taxpayer’s bill. messages from one member of the news media curriculum. If the tax on toll telephone service is paid by to another member (or to or from their bona fide inserting coins in coin-operated telephones, • It normally has a regularly enrolled body of correspondents). For the exemption to apply, figure the tax to the nearest multiple of 5 cents. pupils or students in attendance at the the charge for these services must be billed in When the tax is midway between 5-cent multi- place where its educational activities are writing to the person paying for the service and ples, the next higher multiple applies. regularly carried on. that person must certify in writing that the servPrepaid telephone cards. A prepaid tele- ices are used for an exempt purpose. • It is exempt from income tax under section

phone card is any card or any other similar 501(a) of the Internal Revenue Code. Services not exempted. The tax applies to arrangement that allows its holder to get local or amounts paid by members of the news media for This includes a school operated by an organiza- toll telephone service and pay for those services local telephone service. Toll telephone service tion exempt under section 501(c)(3) of the Inter- in advance. The tax is imposed when the card is in connection with celebrities or special guests nal Revenue Code if the school meets the above transferred by a telecommunications carrier to on talk shows is subject to the tax. qualifications. any person who is not a telecommunications

carrier. The face amount of the card is the Common carriers and communications Federal, state, and local government. The amount paid for communications services. If the companies. The tax on toll telephone service tax does not apply to communication services face amount is not a dollar amount, see section does not apply to WATS (wide area telephone provided to the government of the United States, 49.4251–4 of the regulations. service) used by common carriers, telephone the government of any state or its political subdi- and telegraph companies, or radio broadcasting visions, the District of Columbia, or the United

stations or networks in their business. A com- Nations. Treat an Indian tribal government as Exemptions mon carrier is one holding itself out to the public a state for the exemption from the communica- as engaged in the business of transportation of Payments for certain services or payments from tions tax only if the services involve the exercise

certain users are exempt from the communica- persons or property for compensation and offer- of an essential tribal government function. ing its services to the public generally. tions tax.

Exemption certificate. Any form of exemp- Military personnel serving in a combat zone. Installation charges. The tax does not apply tion certificate will be acceptable if it includes all The tax on toll telephone services does not ap- to payments received for the installation of any the information required by the Internal Revenue ply to telephone calls originating in a combat instrument, wire, pole, switchboard, apparatus, Code and Regulations. File the certificate with zone that are made by members of the U.S. or equipment. However, the tax does apply to the provider of the communication services. Armed Forces serving there if the person receiv- payments for the repair or replacement of those The following users that are exempt from the ing payment for the call receives a properly items incidental to ordinary maintenance. communications tax do not have to file an an- executed exemption certificate. The signed and nual exemption certificate after they have filed Answering services. The tax does not apply dated exemption certificate must contain all the the initial certificate to claim an exemption from to amounts paid for a private line, an answering following information. the communications tax. service, and a one-way paging or message • The name of the member of the U.S. service if they do not provide access to a local • The American National Red Cross and Armed Forces performing services in the telephone system and the privilege of telephonic other international organizations. combat zone who originated the call. communication as part of the local telephone • Nonprofit hospitals. system. • The toll charges, point of origin, and name

of carrier. • Nonprofit educational organizations. Mobile radio telephone service. The tax

does not apply to payments for a two-way radio • A statement that the charges are exempt • State and local governments.

service that does not provide access to a local from tax under section 4253(d) of the Intelephone system. ternal Revenue Code. The federal government does not have to file

any exemption certificate. Coin-operated telephones. The tax for local • The name and address of the telephone All other organizations must furnish exemp- subscriber. telephone service does not apply to payments tion certificates when required. made for services by inserting coins in public This exemption also applies to members of the coin-operated telephones. The tax for toll tele- Armed Forces serving in a qualified hazardous phone service also does not apply if the charge duty area. A qualified hazardous duty area in- Credits or Refunds

is less than 25 cents. But the tax applies if the cludes an area only while the special pay provi- coin-operated telephone service is furnished for If tax is collected and paid over for certain serv- sion is in effect for that area.

a guaranteed amount. Figure the tax on the ices or users exempt from the communications

amount paid under the guarantee plus any fixed For information about areas designated a tax:

monthly or other periodic charge. combat zone or qualified hazardous duty area,

see Publication 3, Armed Forces’ Tax Guide. 1) The collector may claim a credit or refund Telephone-operated security systems. The if it has:

tax does not apply to amounts paid for tele- International organizations and the Ameriphones used only to originate calls to a limited can Red Cross. The tax does not apply to a) Repaid the tax to the person from

number of telephone stations for security entry communication services furnished to an interna- whom the tax was collected, or

into a building. In addition, the tax does not apply tional organization or to the American National b) Obtained the consent of that person to to any amounts paid for rented communication Red Cross. the allowance of the credit or refund, or equipment used in the security system. Nonprofit hospitals. The tax does not apply

News services. The tax on toll telephone 2) The person who paid the tax may claim a to telephone services furnished to income

service and teletypewriter exchange service refund. tax-exempt nonprofit hospitals for their use.

does not apply to charges for the following news Also, the tax does not apply to amounts paid by For information on forms used to claim a credit

services. these hospitals to provide local telephone serv- or refund, see Credits and Refunds, later.

ice in the homes of their personnel who must be • Services dealing exclusively with the col- reached during their off-duty hours. lection or dissemination of news for or Air Transportation Taxes

through the public press or radio or televi- Nonprofit educational organizations. The sion broadcasting. Taxes are imposed on amounts paid for all the tax does not apply to payments received for following services. • Services used exclusively in the collection services and facilities furnished to a nonprofit

or dissemination of news by a news ticker educational organization for its use. A nonprofit • Transportation of persons by air.

Page 5
• Use of international air travel facilities. $240 fare and $24 excise tax [($240 × 7.5%) + (2 Transportation between the continental

× $3.00)] for which Frank is liable. The airline U.S. and Alaska or Hawaii. This transporta- • Transportation of property by air. collects the tax from Frank and pays it over to tion is partially exempt from the tax on transporthe government. tation of persons by air. The tax does not apply

Transportation of to the part of the trip between the point at which Charter flights. If an aircraft is chartered, Persons by Air the route of transportation leaves or enters the the domestic-segment tax for each segment of continental United States (or a port or station in

The tax on transportation of persons by air is taxable transportation is figured by multiplying the 225-mile zone) and the point at which it

made up of the following two parts. the tax by the number of passengers trans- enters or leaves Hawaii or Alaska. Leaving or ported on the aircraft. entering occurs when the route of the transpor- • The percentage tax. tation passes over either the United States bor- Example. In March 2003, Tim Clark pays • The domestic-segment tax. der or a point 3 nautical miles (3.45 statute $1,117 to an air charter service to carry 7 em- miles) from low tide on the coast line, or when it ployees from Washington to Detroit with an in- leaves a port or station in the 225-mile zone. Percentage tax. A tax of 7.5% applies to termediate stop in Pittsburgh. The flight Therefore, this transportation is subject to the amounts paid for taxable transportation of per- comprises two segments. The price includes the percentage tax on the part of the trip in U.S. sons by air. Amounts paid for transportation $1,000 charter payment and $117 excise tax airspace, the domestic-segment tax for each include charges for layover or waiting time and [($1,000 × 7.5%) + (2 × $3.00 × 7 passengers)] domestic segment, and the tax on the use of movement of aircraft in deadhead service. for which Tim is liable. The charter service col- international air travel facilities, discussed later.

Mileage awards. The percentage tax may lects the tax from Tim and pays it over to the Transportation within Alaska or Hawaii. apply to an amount paid (in cash or in kind) to an government. The tax on transportation of persons by air ap- air carrier (or any related person) for the right to Rural airports. The domestic-segment tax plies to the entire fare paid in the case of flights provide mileage awards for, or other reductions does not apply to a segment to or from a rural between any of the Hawaiian Islands, and be- in the cost of, any transportation of persons by airport. An airport is a rural airport for a calendar tween any ports or stations in the Aleutian Is- air. For example, this applies to mileage awards year if it satisfies both the following require- lands or other ports or stations elsewhere in purchased by credit card companies, telephone ments. Alaska. The tax applies even though parts of the companies, restaurants, hotels, and other busi- flights may be over international waters or over nesses. 1) Fewer than 100,000 commercial passen- Canada, if no point on the direct line of transpor- Generally, the percentage tax does not apply gers departed from the airport during the tation between the ports or stations is more than to amounts paid for mileage awards where the second preceding calendar year. 225 miles from the United States (Hawaii or mileage awards cannot, under any circum- Alaska). 2) Either of the following statements is true. stances, be redeemed for air transportation that

is subject to the tax. Until regulations are issued, a) The airport is not located within 75 Package tours. The air transportation taxes the following rules apply to mileage awards. miles of another airport from which apply to “complimentary” air transportation fur100,000 or more commercial passen- nished solely to participants in package holiday • Amounts paid for mileage awards that

gers departed during the second pre- tours. The amount paid for these package tours cannot be redeemed for taxable transporceding calendar year. includes a charge for air transportation even tation beginning and ending in the United

States are not subject to the tax. For this though it may be advertised as “free.” This rule b) The airport was receiving essential air also applies to the tax on the use of international rule, mileage awards issued by a foreign service subsidies as of August 5, 1997. air travel facilities, discussed later. air carrier are considered to be usable

only on that foreign air carrier and thus not Revenue Procedure 98–18 in Cumulative Bul- Liability for tax. The person paying for taxa- redeemable for taxable transportation be- letin 1998–1 is the most recent list of rural ble transportation is liable for the tax and, ordi- ginning and ending in the United States. airports published by the IRS. An updated list narily, the person receiving the payment collects Therefore, amounts paid to a foreign air can be found on the Department of Transporta- the tax, files the returns, and pays the tax over to carrier for mileage awards are not subject tion web site at www.bts.gov/oai/rural.html. the government. However, if payment is made to the tax. outside the United States for a prepaid order,

• Amounts paid by an air carrier to a domes- Taxable transportation. Taxable transporta- exchange order, or similar order, the person

tic air carrier for mileage awards that can tion is transportation by air that meets either of furnishing the initial transportation provided for

be redeemed for taxable transportation the following tests. under that order must collect the tax.

are not subject to the tax to the extent A travel agency that is an independent • It begins and ends either in the United those miles will be awarded in connection broker and sells tours on aircraft that it charters

with the purchase of taxable transporta- States or at any place in Canada or Mex- must collect the transportation tax, file the re- ico not more than 225 miles from the near- tion. turns, and pay the tax over to the government. est point on the continental United States However, a travel agency that sells tours as the • Amounts paid by an air carrier to a domes- boundary (this is the 225-mile zone). agent of an airline must collect the tax and remit tic air carrier for mileage awards that can • It is directly or indirectly from one port or it to the airline for the filing of returns and for the be redeemed for taxable transportation payment of the tax over to the government. are subject to the tax to the extent those station in the United States to another port The fact that the aircraft does not use public miles will not be awarded in connection or station in the United States, but only if it or commercial airports in taking off and landing with the purchase of taxable transporta- is not a part of uninterrupted international has no effect on the tax. But see Certain helicop- air transportation, discussed later. tion. ter uses, later.

Round trip. A round trip is considered two For taxable transportation that begins and

Domestic-segment tax. The domestic-seg- ends in the United States, the tax applies re- separate trips. The first trip is from the point of ment tax is a flat dollar amount for each segment gardless of whether the payment is made in or departure to the destination. The second trip is of taxable transportation for which an amount is outside the United States. the return trip from that destination. paid. However, see Rural airports, later. A seg- If the tax is not paid when payment for the

ment is a single takeoff and a single landing. Uninterrupted international air transportation is made, the air carrier providing

The domestic-segment tax is $3.00 per segment transportation. This means transportation the initial segment of the transportation that bethat begins during 2003. entirely by air that does not begin and end in the gins or ends in the United States becomes liable United States or in the 225-mile zone if there is for the tax.

Example. In January 2003, Frank Jones not more than a 12-hour scheduled interval bepays $264 to a commercial airline for a flight in tween arrival and departure at any station in the Exemptions from tax. The tax on transportaJanuary from Washington to Chicago with an tion of persons by air does not apply in the United States. For a special rule that applies to

intermediate stop in Cleveland. The flight com- following situations. See also military personnel, see Exemptions from tax, Special Rules on

prises two segments. The price includes the later. Transportation Taxes, later.

Page 6
Military personnel on international trips. Transportation of If tax is not paid when a payment is made

When traveling in uniform at their own expense, Property by Air outside the United States, the person furnishing

United States military personnel on authorized the last segment of taxable transportation colA tax of 6.25% is imposed on amounts paid lects the tax from the person to whom the prop- leave are deemed to be traveling in uninter- (whether in or outside the United States) for erty is delivered in the United States. rupted international air transportation (defined transportation of property by air. The fact that earlier) even if the scheduled interval between the aircraft may not use public or commercial arrival and departure at any station in the United airports in taking off and landing has no effect on Special Rules on States is actually more than 12 hours. However, the tax. The tax applies only to amounts paid to Transportation Taxes such personnel must buy their tickets within 12 a person engaged in the business of transporthours after landing at the first domestic airport ing property by air for hire. In certain circumstances, special rules apply to

The tax applies only to transportation (includ- the taxes on transportation of persons and prop- and accept the first available accommodation of

ing layover time and movement of aircraft in erty by air. the type called for by their tickets. The trip must deadhead service) that begins and ends in the begin or end outside the United States and the United States. Thus, the tax does not apply to Aircraft used by affiliated corporations. 225-mile zone. The taxes do not apply to payments received by transportation of property by air that begins or

Certain helicopter uses. The tax does not one member of an affiliated group of corpora- ends outside the United States.

tions from another member for services fur- apply to air transportation by helicopter if the Exemptions from tax. The tax on transporta- nished in connection with the use of an aircraft. helicopter is used for any of the following pur- tion of property by air does not apply in the However, the aircraft must be owned or leased poses. following situations. See also Special Rules on by a member of the affiliated group and cannot Transportation Taxes, later. be available for hire by a nonmember of the 1) Transporting individuals, equipment, or Cropdusting and firefighting service. affiliated group. Determine whether an aircraft is The supplies in the exploration for, or the de- available for hire by a nonmember of an affiliated tax does not apply to amounts paid for cropdust- velopment or removal of, hard minerals, group on a flight-by-flight basis. ing or aerial firefighting service. oil, or gas. An affiliated group of corporations, for this Exportation. The tax does not apply to rule, is any group of corporations connected with 2) Planting, cultivating, cutting, transporting, payments for transportation of property by air in a common parent corporation through 80% or or caring for trees (including logging oper- the course of exportation (including to United more of stock ownership. ations). States possessions) by continuous movement,

as evidenced by the execution of Form 1363, Small aircraft. The taxes do not apply to 3) Providing emergency medical services. Export Exemption Certificate. See Form 1363 transportation furnished by an aircraft having a However, during a use described in items (1) for more details. maximum certificated takeoff weight of 6,000

and (2), the tax applies if the helicopter takes off Certain helicopter and fixed-wing air am- pounds or less. However, the taxes do apply if

from, or lands at, a facility eligible for assistance bulance uses. The tax does not apply to the aircraft is operated on an established line.

under the Airport and Airway Development Act “Operated on an established line” means the amounts paid for the use of helicopters in conof 1970, or otherwise uses services provided aircraft operates with some degree of regularity struction to set heating and air conditioning units between definite points. under section 44509 or 44913(b) or subchapter I on roofs of buildings, to dismantle tower cranes,

and to aid in construction of power lines and ski Consider an aircraft to be operated on an of chapter 471 of title 49, United States Code. established line if it is operated on a charter lifts. For item (1), treat each flight segment as a The tax also does not apply to air transporta- basis between two cities also served by that separate flight. carrier on a regularly scheduled basis. tion by helicopter or fixed-wing aircraft for the

Fixed-wing air ambulance. The tax does purpose of providing emergency medical serv- Mixed load of persons and property. If a not apply to air transportation by fixed-wing air- ices. The fixed-wing aircraft must be equipped single amount is paid for air transportation of craft if used for emergency medical services. for and exclusively dedicated on that flight to persons and property, the payment must be The aircraft must be equipped for and exclu- acute care emergency medical services. allocated between the amount subject to the tax sively dedicated on that flight to acute care Skydiving. The tax does not apply to any air on transportation of persons and the amount emergency medical services. transportation exclusively for the purpose of subject to the tax on transportation of property.

Skydiving. The tax does not apply to any air skydiving. The allocation must be reasonable and supported by adequate records. transportation exclusively for the purpose of Excess baggage. The tax does not apply to

skydiving. excess baggage accompanying a passenger on

an aircraft operated on an established line. Bonus tickets. The tax does not apply to Credits or Refunds

Alaska and Hawaii. For transportation of free bonus tickets issued by an airline company property to and from Alaska and Hawaii, the tax If tax is collected and paid over for air transporta- to its customers who have satisfied all require- in general does not apply to the portion of the tion that is not taxable air transportation, the ments to qualify for the bonus tickets. However, transportation that is entirely outside the conti- collector may claim a credit or refund if it has the tax applies to amounts paid by customers for nental United States (or the 225-mile zone if the repaid the tax to the person from whom the tax advance bonus tickets when customers have aircraft departs from or arrives at an airport in was collected or obtained the consent of that

traveled insufficient mileage to fully qualify for person to the allowance of the credit or refund. the 225-mile zone). But the tax applies to flights

the free advance bonus tickets. between ports or stations in Alaska and the Alternatively, the person who paid the tax may

Aleutian Islands, as well as between ports or claim a refund. For information on forms used to

stations in Hawaii. The tax applies even though claim a credit or refund, see Credits and ReUse of International parts of the flights may be over international funds, later.

Air Travel Facilities waters or over Canada, if no point on a line

drawn from where the route of transportation A $13.40 tax per person is imposed on amounts leaves the United States (Alaska) to where it

paid during 2003 (whether in or outside the reenters the United States (Alaska) is more than Fuel Taxes

United States) for international flights that begin 225 miles from the United States.

or end in the United States. However, for a Excise taxes are imposed on all the following Liability for tax. The person paying for taxa- domestic segment that begins or ends in Alaska fuels. ble transportation is liable for the tax and, ordi- or Hawaii, a $6.70 tax per person applies only to narily, the person engaged in the business of • Gasoline.

departures. This tax does not apply if all the transporting property by air for hire receives the • Gasohol. transportation is subject to the percentage tax, payment, collects the tax, files the returns, and

discussed earlier. pays the tax over to the government. • Diesel fuel.

Page 7
• Kerosene. Optional reporting. A first taxpayer’s report • A feedstock user. is not required for the tax imposed on any of the • Aviation fuel. • A gasohol blender. following taxable events.

• Special motor fuels (including LPG). • An industrial user. • Removal at a terminal rack.

• Compressed natural gas. • A throughputter that is not a position • Nonbulk entries into the United States.

• Fuels used in commercial transportation holder. • Removals or sales by blenders. on inland waterways. • An ultimate vendor. However, if the person liable for the tax expects

• An ultimate vendor (blocked pump). that another tax will be imposed on that fuel, that Measurement of taxable fuel. Volumes of person should (but is not required to) file a first taxable fuel (gasoline, diesel fuel, and kerosene) Ultimate vendors do not need to be registered to taxpayer’s report. can be measured on the basis of actual volumet- buy or sell diesel fuel or kerosene. However,

ric gallons or gallons adjusted to 60 degrees they must be registered for filing certain claims Providing information. The first taxpayer

Fahrenheit. for the excise tax on these fuels. must give a copy of the report to the buyer of the

fuel within the bulk transfer/terminal system or to

Taxable fuel registrant. This is an enterer, an the owner of the fuel immediately before the first Information Returns

industrial user, a refiner, a terminal operator, or tax was imposed, if the first taxpayer is not the

Form 720–TO and Form 720–CS are informa- a throughputter who received a Letter of Regis- owner at that time. If an optional report is filed, a

tion returns used to report monthly receipts and tration under the excise tax registration provi- copy should (but is not required to) be given to

disbursements of liquid products. The returns sions and whose registration has not been the buyer or owner.

are due the last day of the month following the revoked or suspended. The term taxable fuel A person that receives a copy of the first

month in which the transaction occurs. means gasoline, diesel fuel, and kerosene. The taxpayer’s report and later sells the fuel within

These returns can be filed on paper forms or term registrant as used in the discussions of the bulk transfer/terminal system must give the

electronically. For information on filing electroni- these fuels means a taxable fuel registrant. copy and a “Statement of Subsequent Seller” to

cally, see Publication 3536, Motor Fuel Excise the buyer. If the later sale is outside the bulk Additional information. See the Form 637 Tax EDI Guide. transfer/terminal system and that person ex- instructions for the information you must submit pects that another tax will be imposed, that per- Form 720–TO. This information return is used when you apply for registration. son should (but is not required to) give the copy by terminal operators to report receipts and dis- and the statement to the buyer. A model state- bursements of all liquid products to and from all Refunds of Second Tax ment of subsequent seller is shown in Appendix approved terminals. Each terminal operator C as Model Certificate B. The statement must must file a separate form for each approved If the tax is paid on more than one taxable event contain all information necessary to complete for a taxable fuel (gasoline, diesel fuel, and ker- terminal. the model. osene), the person paying the “second tax” may Form 720–CS. This information return must If the first taxpayer’s report relates to fuel claim a refund (without interest) of that tax if sold to more than one buyer, copies of that be filed by bulk transport carriers (barges, ves- certain conditions and reporting requirements report must be made when the fuel is divided. sels, and pipelines) who receive liquid product are met. No credit against any tax is allowed for Each buyer must be given a copy of the report. from an approved terminal or deliver liquid prod- this tax. For information about taxable events,

uct to an approved terminal. see the discussions under Gasoline and Diesel Refund claim. You must make your claim for

Fuel and Kerosene, later. refund on Form 8849. Complete Schedule 5 Liquid product. A liquid product is any liquid (Form 8849) and attach it to your Form 8849. transported into storage at a terminal or deliv- Conditions to allowance of refund. A claim You must have filed Form 720 and paid the ered out of a terminal. For a list of products, see second tax before you file for a refund of that tax. for refund of the tax is allowed only if all the the product code table in the Instructions for

following conditions are met. Do not include this claim with a claim under Forms 720–TO and 720–CS. another tax provision. You must not have in1) A tax on the fuel was paid to the govern- cluded the second tax in the price of the fuel and Registration Requirements ment and not credited or refunded (the must not have collected it from the purchaser.

“first tax”). You must submit the following information with The following discussion applies to excise tax your claim. registration requirements for activities relating to 2) After the first tax was imposed, another tax

gasoline, diesel fuel, and kerosene. The was imposed on the same fuel and was • A copy of the first taxpayer’s report (disterms used in this discussion are defined later. paid to the government (the “second tax”). cussed earlier).

See Registration for Certain Activities, earlier, 3) The person that paid the second tax filed a • A copy of the statement of subsequent for more information about registration. timely claim for refund containing the infor- seller if the fuel was bought from someone

Persons that must register. You must be mation required (see Refund claim, later). other than the first taxpayer.

registered if you are any of the following per- 4) The person that paid the first tax has met sons. the reporting requirements, discussed Definitions • A blender. next.

The following terms are used throughout the • An enterer. discussion of fuel taxes. Other terms are defined Reporting requirements. Generally, the per- • A pipeline operator. in the discussion of the specific fuels to which son that paid the first tax must file a “First they pertain. • A position holder. Taxpayer’s Report” with its Form 720 for the

quarter to which the report relates. A model first Approved terminal or refinery. This is a ter- • A refiner. taxpayer’s report is shown in Appendix C as minal operated by a registrant that is a terminal

• A terminal operator. Model Certificate A. Your report must contain all operator or a refinery operated by a registrant

information needed to complete the model. that is a refiner. • A vessel operator. By the due date for filing the Form 720, you Biodiesel. This is a liquid composed of In addition, bus and train operators must be must send a separate copy of the report to the monoalkyl esters of long chain fatty acids de- registered if they use dyed diesel fuel in their following address. rived from vegetable oils or animal fats that is buses or trains and they incur liability for tax at Internal Revenue Service Center covered by ASTM specification D 6751. the bus or train rate. Cincinnati, OH 45999–0555 Biodiesel does not contain any paraffins.

Persons that may register. You may, but are Blended taxable fuel. This means any taxanot required to, register if you are any of the Write “EXCISE – FIRST TAXPAYER’S ble fuel produced outside the bulk transfer/termifollowing persons. REPORT” across the top of that copy. nal system by mixing taxable fuel on which

Page 8
excise tax has been imposed and any other Sale. For fuel not in a terminal, this is the Terminal operator’s liability. The terminal

liquid on which excise tax has not been im- transfer of title to, or substantial incidents of operator is jointly and severally liable for the tax

posed. This does not include a mixture removed ownership in, fuel to the buyer for money, serv- if the position holder is a person other than the

or sold during the calendar quarter if all such ices, or other property. For fuel in a terminal, this terminal operator and is not a registrant.

mixtures removed or sold by the blender contain is the transfer of the inventory position if the However, a terminal operator meeting all the

less than 400 gallons of a liquid on which the tax transferee becomes the position holder for that following conditions at the time of the removal

has not been imposed. Blended taxable fuel fuel. will not be liable for the tax.

does not include gasohol that receives an excise State. This includes any state, any of its politi- • The terminal operator is a registrant. tax benefit. cal subdivisions, the District of Columbia, and • The terminal operator has an unexpired Blender. This is the person that produces the American Red Cross. Treat an Indian tribal notification certificate (discussed later) blended taxable fuel. government as a state only if transactions in- from the position holder. volve the exercise of an essential tribal govern- Bulk transfer. This is the transfer of fuel by ment function. • The terminal operator has no reason to

pipeline or vessel. believe any information on the certificate is

Terminal. This is a storage and distribution false. Bulk transfer/terminal system. This is the facility supplied by pipeline or vessel, and from fuel distribution system consisting of refineries, which fuel may be removed at a rack. It does not pipelines, vessels, and terminals. Fuel in the Removal from refinery. The removal of gaso- include a facility at which gasoline blendstocks supply tank of any engine, or in any tank car, line from a refinery is taxable if the removal are used in the manufacture of products other railcar, trailer, truck, or other equipment suitable meets either of the following conditions. than finished gasoline if no gasoline is removed for ground transportation is not in the bulk trans- from the facility. A terminal does not include any • It is made by bulk transfer and the refiner fer/terminal system. facility where finished gasoline, undyed diesel or the owner of the gasoline immediately

Enterer. This is the importer of record for the fuel, or undyed kerosene is stored if the facility is before the removal is not a registrant.

operated by a registrant and all such fuel stored fuel. However, if the importer of record is acting • It is made at the refinery rack. at the facility has been previously taxed upon as an agent, the person for whom the agent is removal from a refinery or terminal. The refiner is liable for the tax. acting is the enterer. If there is no importer of

record, the owner at the time of entry into the Terminal operator. This is any person that Exception. The tax does not apply to a re- United States is the enterer. owns, operates, or otherwise controls a termi- moval of gasoline at the refinery rack if all the

nal. following requirements are met. Entry. Fuel is entered into the United States

when it is brought into the United States and Throughputter. This is any person that is a • The gasoline is removed from an apapplicable customs law requires that it be en- position holder or that owns fuel within the bulk proved refinery not served by pipeline

tered for consumption, use, or warehousing. (other than for receiving crude oil) or ves- transfer/terminal system (other than in a termi- This does not apply to fuel brought into Puerto nal). sel.

Rico (which is part of the U.S. customs territory), • The gasoline is received at a facility oper- but does apply to fuel brought into the United Vessel operator. This is the person that oper- ated by a registrant and located within the States from Puerto Rico. ates a vessel within the bulk transfer/terminal

bulk transfer/terminal system. system. However, vessel does not include a Pipeline operator. This is the person that op- deep draft ocean-going vessel. • The removal from the refinery is by railcar. erates a pipeline within the bulk transfer/terminal

system. • The same person operates the refinery Gasoline and the facility at which the gasoline is Position holder. This is the person that holds received. The following discussion provides information the inventory position in the fuel in the terminal, about the excise tax on gasoline. as reflected in the records of the terminal opera- Entry into the United States. The entry of tor. You hold the inventory position when you Gasoline. This means finished gasoline and gasoline into the United States is taxable if the have a contractual agreement with the terminal gasoline blendstocks. Finished gasoline means entry meets either of the following conditions. operator for the use of the storage facilities and all products (including gasohol) that are com- terminaling services for the fuel. A terminal oper- monly or commercially known or sold as gaso- • It is made by bulk transfer and the enterer

ator that owns the fuel in its terminal is a position is not a registrant. line and are suitable for use as a motor fuel. The

holder. product must have an octane rating of 75 or • It is not made by bulk transfer. more. Gasoline blendstocks are discussed later. Rack. This is a mechanism capable of deliver- The enterer is liable for the tax. ing fuel into a means of transport other than a Aviation gasoline. This means all special pipeline or vessel. grades of gasoline suitable for use in aviation Removal from a terminal by unregistered poRefiner. reciprocating engines and covered by ASTM sition holder. The removal by bulk transfer of This is any person that owns, oper- specification D 910 or military specification gasoline from a terminal is taxable if the position ates, or otherwise controls a refinery. MIL-G-5572. holder for the gasoline is not a registrant. The

Refinery. This is a facility used to produce fuel position holder is liable for the tax. The terminal

from crude oil, unfinished oils, natural gas li- operator is jointly and severally liable for the tax

quids, or other hydrocarbons and from which Taxable Events if the position holder is a person other than the

fuel may be removed by pipeline or vessel or at terminal operator. However, see Terminal The tax on gasoline is 18.4 cents a gallon. The a rack. However, this term does not include a operator’s liability under Removal from terminal, tax on aviation gasoline is 19.4 cents a gallon. facility where only blended fuel or gasohol, and earlier, for an exception. Tax is imposed on the removal, entry, or sale of no other type of fuel, is produced. For this purpose, blended fuel is any mixture that would be gasoline. Each of these events is discussed Bulk transfers not received at approved terblended taxable fuel if produced outside the bulk later. However, see the special rules that apply minal or refinery. The removal by bulk transto gasoline blendstocks, later. Also, see the dis- transfer/terminal system. fer of gasoline from a terminal or refinery, or the

cussion under Gasohol, if applicable. entry of gasoline by bulk transfer into the United

Registrant. This is a taxable fuel registrant If the tax is paid on the gasoline in more than States, is taxable if the following conditions ap-

(see Registration Requirements, earlier). one event, a refund may be allowed for the ply.

“second” tax paid. See Refunds of Second Tax, Removal. This is any physical transfer of fuel. earlier. 1) No tax was previously imposed (as dis- It also means any use of fuel other than as a cussed earlier) on any of the following material in the production of taxable or special Removal from terminal. All removals of gas- events.

fuels. However, fuel is not removed when it oline at a terminal rack are taxable. The position

evaporates or is otherwise lost or destroyed. holder for that gasoline is liable for the tax. a) The removal from the refinery.

Page 9
b) The entry into the United States. Certificate C. Your notification certificate must However, gasoline blendstocks do not include

contain all information necessary to complete any product that cannot be used without further c) The removal from a terminal by an un- the model. processing in the production of finished gaso- registered position holder. The certificate may be included as part of line.

any business records normally used for a sale. A 2) Upon removal from the pipeline or vessel, Not used to produce finished gasoline. certificate expires on the earlier of the date the the gasoline is not received at an ap- Gasoline blendstocks not used to produce fin- registrant provides a new certificate, or the date proved terminal or refinery (or at another ished gasoline are not taxable if the following the recipient of the certificate is notified that the pipeline or vessel). conditions are met. registrant’s registration has been revoked or The owner of the gasoline when it is removed suspended. The registrant must provide a new Removals and entries not connected to

from the pipeline or vessel is liable for the tax. certificate if any information on a certificate has sale. Nonbulk removals and entries are not

However, an owner meeting all the following changed. taxable if the person otherwise liable for the tax conditions at the time of the removal will not be (position holder, refiner, or enterer) is a regis- liable for the tax. Additional persons liable. When the person trant.

• The owner is a registrant. liable for the tax willfully fails to pay the tax, joint Removals and entries connected to sale.

and several liability for the tax is imposed on: Nonbulk removals and entries are not taxable if • The owner has an unexpired notification the person otherwise liable for the tax (position certificate (discussed later) from the oper- • Any officer, employee, or agent of the per- holder, refiner, or enterer) is a registrant, and at ator of the terminal or refinery where the son who is under a duty to ensure the the time of the sale, meets the following require- gasoline is received. payment of the tax and who willfully fails to ments. perform that duty, or • The owner has no reason to believe any • The person has an unexpired certificate information on the certificate is false. • Anyone who willfully causes the person to (discussed later) from the buyer. fail to pay the tax. The operator of the facility where the gasoline is • The person has no reason to believe any received is liable for the tax if the owner meets

information in the certificate is false. these conditions. The operator is jointly and sev- Gasoline Blendstocks

erally liable if the owner does not meet these

Gasoline includes gasoline blendstocks. The Sales after removal or entry. The sale of a conditions.

previous discussions apply to these blend- gasoline blendstock that was not subject to tax

Sales to unregistered person. The sale of stocks. However, if certain conditions are met, on its nonbulk removal or entry, as discussed

earlier, is taxable. The seller is liable for the tax. gasoline located within the bulk transfer/terminal the removal, entry, or sale of gasoline blendstocks is not taxable. Generally, this applies if However, the sale is not taxable if, at the time of system to a person that is not a registrant is

the gasoline blendstock is not used to produce the sale, the seller meets the following require- taxable if tax was not previously imposed under ments. any of the events discussed earlier. finished gasoline or is received at an approved

The seller is liable for the tax. However, a terminal or refinery. • The seller has an unexpired certificate

seller meeting all the following conditions at the (discussed next) from the buyer.

time of the sale will not be liable for the tax. Blendstocks. The following are gasoline • The seller has no reason to believe any blendstocks. • The seller is a registrant. information in the certificate is false.

• Alkylate. • The seller has an unexpired notification

certificate (discussed later) from the buyer. • Butane. Certificate of buyer. The certificate from the

buyer certifies the gasoline blendstocks will not • The seller has no reason to believe any • Butene. be used to produce finished gasoline. The certif- information on the certificate is false. • Catalytically cracked gasoline. icate may be included as part of any business

The buyer of the gasoline is liable for the tax if records normally used for a sale. A model certifi- • Coker gasoline. the seller meets these conditions. The buyer is cate is shown in Appendix C as Model Certifijointly and severally liable if the seller does not • Ethyl tertiary butyl ether (ETBE). cate D. Your certificate must contain all

meet these conditions. information necessary to complete the model. • Hexane. A certificate expires on the earliest of the Exception. The tax does not apply to a sale • Hydrocrackate. following dates. if all of the following apply.

• Isomerate. • The date 1 year after the effective date • The buyer’s principal place of business is (not earlier than the date signed) of the not in the United States. • Methyl tertiary butyl ether (MTBE). certificate.

• The sale occurs as the fuel is delivered • Mixed xylene (not including any separated • The date a new certificate is provided to into a transport vessel with a capacity of at isomer of xylene). the seller. least 20,000 barrels of fuel. • Natural gasoline. • The date the seller is notified the buyer’s • The seller is a registrant and the exporter • Pentane. right to provide a certificate has been with- of record. drawn. • Pentane mixture. • The fuel was exported. The buyer must provide a new certificate if any • Polymer gasoline. information on a certificate has changed.

Removal or sale of blended gasoline. The • Raffinate. The IRS may withdraw the buyer’s right to removal or sale of blended gasoline by the • Reformate. provide a certificate if that buyer uses the gaso- blender is taxable. See Blended taxable fuel line blendstocks in the production of finished under Definitions, earlier. • Straight-run gasoline. gasoline or resells the blendstocks without get- The blender is liable for the tax. The tax is • Straight-run naphtha. ting a certificate from its buyer. figured on the number of gallons not previously

subject to the tax on gasoline. • Tertiary amyl methyl ether (TAME). Received at approved terminal or refinery.

• Tertiary butyl alcohol (gasoline grade) The nonbulk removal or entry of gasoline blend- Notification certificate. The notification cer- (TBA). stocks received at an approved terminal or refin- tificate is used to notify a person of the registra- ery is not taxable if the person otherwise liable tion status of the registrant. A copy of the • Thermally cracked gasoline. for the tax (position holder, refiner, or enterer) registrant’s letter of registration cannot be used • Toluene. meets all the following requirements. as a notification certificate. A model notification

certificate is shown in Appendix C as Model • Transmix containing gasoline. • The person is a registrant.

Page 10
• The person has an unexpired notification the person that paid the tax to the government if • 7.7% gasohol. This is a mixture that concertificate (discussed earlier) from the op- the gasoline was sold to the user (including an tains at least 7.55%, but less than 9.8%,

erator of the terminal or refinery where the exporter) by either that person or by a retailer for alcohol.

gasoline blendstocks are received. a purpose listed earlier. A credit or refund also is • 5.7% gasohol. This is a mixture that con- allowable to that person if the gasoline was sold • The person has no reason to believe any tains at least 5.59%, but less than 7.55%, to the user by a wholesale distributor and either information on the certificate is false. alcohol. of the following is true.

Any mixture that contains less than 5.59% alcoBulk transfers to registered industrial user. • The distributor bought the gasoline at a hol is not gasohol. The removal of gasoline blendstocks from a price that did not include the tax. If the mixture is produced within the bulk pipeline or vessel is not taxable if the blend- • The sale to the user was charged on an oil transfer/terminal system, such as at a refinery, stocks are received by a registrant that is an company credit card. determine whether the mixture is gasohol when industrial user. An industrial user is any person the taxable removal or entry of the mixture oc- that receives gasoline blendstocks by bulk By signing the claim, the person that paid the tax curs. transfer for its own use in the manufacture of any certifies that it:

product other than finished gasoline. If the mixture is produced outside the bulk

1) Has obtained one of the three items below. transfer/terminal system, determine whether the

mixture is gasohol immediately after the mixture a) Proof of exportation. Credits or Refunds is produced. If you splash blend a batch in an

b) A certificate of ultimate purchaser. empty tank, figure the volume of alcohol (without A credit or refund of the gasoline tax (without adjustment for temperature) by dividing the me- c) A certificate of ultimate vendor. interest) may be allowable if gasoline is, by any tered gallons of alcohol by the total metered person: gallons of alcohol and gasoline as shown on 2) Has met any of the following conditions. • Exported, each delivery ticket. However, if you add mea) Has neither included the tax in the price tered gallons of gasoline and alcohol to a tank • Used in a boat engaged in commercial of the gasoline nor collected the tax already containing more than 0.5% of its capac- fishing, from the buyer. ity in a liquid, include the alcohol and non-alco-

• Used in military aircraft, hol fuel contained in that liquid in figuring the b) Has repaid, or agreed to repay, the tax volume of alcohol in that batch. • Used in foreign trade, to the ultimate vendor of the gasoline.

• Sold to a state for its exclusive use, c) Has gotten the written consent of the Example 1. John uses an empty 8,000 galultimate vendor to the allowance of the lon tank to blend alcohol and gasoline. His deliv- • Sold to a nonprofit educational organiza- credit or refund. ery tickets show that he blended Batch 1 using tion for its exclusive use, 7,200 metered gallons of gasoline and 800 me-

• Sold to the United Nations for its exclusive tered gallons of alcohol. John divides the gallons

use, or Claims by the ultimate purchaser. A credit of alcohol (800) by the total gallons of alcohol

or refund is allowable to the ultimate purchaser and gasoline delivered (8,000). Batch 1 qualifies • Used or sold in the production of special of taxed gasoline used for a nontaxable use. as 10% gasohol. motor fuels (defined later). See Publication 378 for more information about

these claims. Example 2. John blends Batch 2 in an

Claims by wholesale distributors. A credit empty tank. According to his delivery tickets, he

or refund is allowable to a gasoline wholesale Gasohol blended 7,220 gallons of gasoline and 780 galdistributor who buys gasoline at a price that lons of alcohol. Batch 2 contains 9.75% alcohol

includes the excise tax and then sells it to the Generally, the same rules that apply to the impo- (780 ÷ 8,000); it qualifies as 7.7% gasohol.

ultimate purchaser (including an exporter) for a sition of tax on the removal and entry of gasoline Batches containing at least 9.8% alcohol. purpose listed in the previous list. A wholesale (discussed earlier) apply to gasohol. If a mixture contains at least 9.8% but less than distributor is any person who makes retail sales However, the removal of gasohol from a re- 10% alcohol, part of the mixture is considered to of gasoline at 10 or more retail motor fuel outlets finery is taxable if the removal is from an ap- be 10% gasohol. To figure that part, multiply the or sells gasoline to producers, retailers, or users proved refinery by bulk transfer and the number of gallons of alcohol in the mixture by who purchase in bulk quantities and accept de- registered refiner treats itself as not registered. 10. The other part of the mixture is excess liquid livery into bulk storage tanks. A wholesale dis- This is in addition to the taxable events dis- that is subject to the rules on failure to blend, tributor is not a producer or importer. cussed earlier under Removal from discussed later. The wholesale distributor must have sold the refinery. gasoline at a tax-excluded price and obtained a Batches containing at least 7.55% alcohol.

certificate of ultimate purchaser or proof of ex- If a mixture contains at least 7.55% but less than Gasohol. Gasohol is a mixture of gasoline and portation. 7.7% alcohol, part of the mixture is considered to alcohol that satisfies the alcohol-content re- The wholesale distributor must complete be 7.7% gasohol. To figure that part, multiply the quirements immediately after the mixture is pro- Schedule 4 (Form 8849) and attach it to Form number of gallons of alcohol in the mixture by duced. Alcohol includes ethanol and methanol. 8849 to make a claim for refund for gasoline sold 12.987. The other part of the mixture is excess Generally, this includes ethanol used to produce to an ultimate purchaser for a purpose listed liquid subject to the rules on failure to blend, ethyl tertiary butyl ether (ETBE) and methanol earlier. discussed later.

produced from methane gas formed in waste By signing the Form 8849, the gasoline Batches containing at least 5.59% alcohol. disposal sites. However, alcohol produced from wholesale distributor certifies that it: If a mixture contains at least 5.59% but less than petroleum, natural gas, coal (including peat), or 5.7% alcohol, part of the mixture is considered to • Bought the gasoline at a price that in- any derivative or product of these items, and be 5.7% gasohol. To figure that part, multiply the cluded the excise tax, alcohol less than 190 proof do not qualify as number of gallons of alcohol in the mixture by alcohol for these rules. • Qualifies as a wholesale distributor, 17.544. The other part of the mixture is excess

liquid that is subject to the rules on failure to • Sold the fuel at a tax-excluded price, and Alcohol-content requirements. To qualify as blend, discussed later. gasohol, a mixture must contain a specific • Has obtained the certificate of the ultimate amount of alcohol by volume, without rounding. purchaser or proof of export from its Gasohol blender. A gasohol blender is any Figure the alcohol content on a batch-by-batch buyer. person that regularly produces gasohol outside basis. There are three types of gasohol. of the bulk transfer/terminal system for sale or

Claims by persons who paid the tax to the • 10% gasohol. This is a mixture that con- use in its trade or business. A “registered gasogovernment. A credit or refund is allowable to tains at least 9.8% alcohol. hol blender” is a person that has been registered

Page 11
by the IRS as a gasohol blender. See Registra- taining methanol are shown in the instructions a) Distillation range of 125 degrees Fahrtion Requirements, earlier. for Form 720. enheit or less.

b) Sulfur content of 10 ppm or less. Later separation. If a person separates gaso- Tax Rates c) Minimum color of +27 Saybolt. line from gasohol on which a reduced tax rate

was imposed, that person is treated as the re- The tax rate depends on the type of gasohol. finer of the gasoline. Tax is imposed on the These rates are less than the regular tax rate for Kerosene. This means any of the following removal or sale of the gasoline. This tax rate is gasoline. The reduced rate also depends on liquids. the difference between the regular tax rate for whether you are liable for the tax on the removal gasoline and the tax rate imposed on the prior • One of the two grades of kerosene (No. or entry of gasoline used to make gasohol, or on removal or entry of the gasohol. The person that 1-K and No. 2-K) covered by ASTM speci- the removal or entry of gasohol. You may be owns the gasohol when the gasoline is sepa- fication D 3699. liable for additional tax if you later separate the rated is liable for the tax. gasoline from the gasohol or fail to blend gaso- • Aviation-grade kerosene.

line into gasohol. Failure to blend. Tax is imposed on the re- However, kerosene does not include ex- moval, entry, or sale of gasoline on which a Tax on gasoline. The tax on gasoline re- cluded liquid, discussed earlier. reduced rate of tax was imposed if the gasoline moved or entered for the production of gasohol Kerosene also includes any liquid that would was not blended into gasohol, or was blended depends on the type of gasohol that is to be be described above but for the presence of a into gasohol taxable at a higher rate. This tax is produced. The rates apply to the tax imposed on dye of the type used to dye kerosene for a the difference between the tax that should have the removal at the terminal rack or from the nontaxable use.

applied and the tax actually imposed. If the gas- refinery, or on the nonbulk entry into the United

States (as discussed under Gasoline, oline was not sold, the person liable for this tax is Aviation-grade kerosene. This is earlier). the person that was liable for the tax on the entry kerosene-type jet fuel covered by ASTM specifi- The rates for gasoline used to produce gasohol or removal. If the gasoline was sold, the person cation D 1655 or military specification containing ethanol are shown on Form 720. The that bought the gasoline in connection with the MIL-DTL-5624T (Grade JP-5) or MIL-DTL- rates for gasoline used to produce gasohol con- taxable removal or entry is liable for this tax. 83133E (Grade JP-8). taining methanol are shown in the instructions

for Form 720.

Example. John uses an empty 8,000 gallon Diesel-powered highway vehicle. This is

Requirements. The reduced rates apply if tank to blend gasoline and alcohol. The delivery any self-propelled vehicle designed to carry a

the person liable for the tax (position holder, tickets show he blended 7,205 metered gallons load over public highways (whether or not also

refiner, or enterer) is a registrant and: of gasoline and 795 metered gallons of alcohol. designed to perform other functions) and proHe bought the gasoline at a reduced tax rate of pelled by a diesel-powered engine. Generally,

1) A registered gasohol blender that pro- 14.666 cents per gallon. The batch contains do not consider as diesel-powered highway veduces gasohol with the gasoline within 24 9.9375% alcohol (795 ÷ 8,000). John deter- hicles specially designed mobile machinery for

hours after removing or entering the gaso- mines that 7,950 gallons (10 × nontransportation functions and vehicles spe- 795) of the mixline, or cially designed for off-highway transportation. ture qualifies as 10% gasohol. See Batches

containing at least 9.8% alcohol, earlier. The For more information about these vehicles and 2) That person, at the time that the gasoline other 50 gallons is excess liquid that he failed to for information about vehicles not considered is sold in connection with the removal or

blend into gasohol. He is liable for a tax of 3.734 highway vehicles, see Publication 378. entry: cents per gallon (18.40 (full rate) − 14.666 (re- Diesel-powered train. This is any diesel-pow- a) Has an unexpired certificate from the duced rate)) on this excess liquid. ered equipment or machinery that rides on rails. buyer, and The term includes a locomotive, work train,

b) Has no reason to believe any informa- switching engine, and track maintenance ma- Credits or Refunds tion in the certificate is false. chine.

A credit or refund for part of the gasoline tax may

be allowed if gasoline taxed at the full rate is Certificate. The certificate from the buyer used to produce gasohol for sale or use in a Taxable Events certifies that the gasoline will be used to produce person’s trade or business. By signing the claim, gasohol within 24 hours after purchase. The The tax on diesel fuel and kerosene is 24.4 the person certifies that it has, for each batch of certificate may be included as part of any busi- cents a gallon. It is imposed on the removal, gasohol, the required information related to the ness records normally used for a sale. A copy of entry, or sale of diesel fuel and kerosene. Each purchase of the gasoline. the registrant’s letter of registration cannot be of these events is discussed later. The tax does

used as a gasohol blender’s certificate. A model not apply to dyed diesel fuel or dyed kerosene, certificate is shown in Appendix C as Model Diesel Fuel and Kerosene discussed later.

Certificate E. Your certificate must contain all If the tax is paid on the diesel fuel or ker- Generally, diesel fuel and kerosene are taxed in information necessary to complete the model. osene in more than one event, a refund may be the same manner as gasoline (discussed ear- A certificate expires on the earliest of the allowed for the “second” tax paid. See Refunds lier). The following discussion provides informa- following dates. of Second Tax, earlier. tion about the excise tax on diesel fuel and

• The date 1 year after the effective date kerosene. Removal from terminal. All removals of un-

(which may be no earlier than the date dyed diesel fuel or undyed kerosene at a termisigned) of the certificate. Diesel fuel. The term diesel fuel means any nal rack are taxable. The position holder for that

liquid that, without further processing or blend- fuel is liable for the tax. • The date a new certificate is provided to ing, is suitable for use as a fuel in a diesel-pow- the seller. Terminal operator’s liability. The terminal ered highway vehicle or train. Diesel fuel does operator is jointly and severally liable for the tax • The date the seller is notified the gasohol not include gasoline, kerosene, excluded liquid, if the terminal operator provides any person with blender’s registration has been revoked or No. 5 and No. 6 fuel oils covered by ASTM any bill of lading, shipping paper, or similar doc- suspended. specification D 396, or F-76 (Fuel Naval Distil- ument indicating that undyed diesel fuel or un- late) covered by military specification The buyer must provide a new certificate if any dyed kerosene is dyed (discussed later). MIL-F-16884.

information on a certificate has changed. The terminal operator is jointly and severally An excluded liquid is either of the following. liable for the tax if the position holder is a person

Tax on gasohol. The tax on the removal or other than the terminal operator and is not a 1) A liquid that contains less than 4% normal entry of gasohol depends on the type of gasohol. registrant. However, a terminal operator will not paraffins. The rates for gasohol containing ethanol are be liable for the tax in this situation if, at the time

shown on Form 720. The rates for gasohol con- of the removal, the following conditions are met. 2) A liquid with all the following properties.

Page 12
into the United States is taxable if the following Removal or sale of blended diesel fuel or • The terminal operator is a registrant. conditions apply. kerosene. The removal or sale of blended die-

• The terminal operator has an unexpired sel fuel or blended kerosene by the blender is

notification certificate (discussed under 1) No tax was previously imposed (as dis- taxable. Blended taxable fuel produced using

Gasoline) from the position holder. cussed earlier) on any of the following biodiesel is subject to the tax. See Blended

events. taxable fuel under Definitions, earlier. • The terminal operator has no reason to The blender is liable for the tax. The tax is believe any information on the certificate is a) The removal from the refinery. figured on the number of gallons not previously false. subject to the tax. b) The entry into the United States.

Removal from refinery. The removal of un- c) The removal from a terminal by an un- Additional persons liable. When the person

dyed diesel fuel or undyed kerosene from a registered position holder. liable for the tax willfully fails to pay the tax, joint

refinery is taxable if the removal meets either of and several liability for the tax is imposed on:

the following conditions. 2) Upon removal from the pipeline or vessel, • Any officer, employee, or agent of the per- the undyed diesel fuel or undyed kerosene • It is made by bulk transfer and the refiner son who is under a duty to ensure the is not received at an approved terminal or or owner of the fuel immediately before payment of the tax and who willfully fails to refinery (or at another pipeline or vessel). the removal is not a registrant. perform that duty, or

The owner of the undyed diesel fuel or un- • It is made at the refinery rack. • Anyone who willfully causes the person to dyed kerosene when it is removed from the fail to pay the tax. The refiner is liable for the tax. pipeline or vessel is liable for the tax. However,

an owner meeting all the following conditions at Exception. The tax does not apply to a removal of undyed diesel fuel or undyed kerosene the time of the removal will not be liable for the Exemptions

at the refinery rack if all the following conditions tax.

The excise tax on diesel fuel or kerosene is not are met. • The owner is a registrant. imposed if the requirements related to the following exemptions are met. 1) The undyed diesel fuel or undyed ker- • The owner has an unexpired notification osene is removed from an approved refin- certificate (discussed under Gasoline) • Sale or use in Alaska.

ery not served by pipeline (other than for from the operator of the terminal or refin- • Aviation-grade kerosene used in an air- receiving crude oil) or vessel. ery where the undyed diesel fuel or un- craft.

2) The undyed diesel fuel or undyed ker- dyed kerosene is received.

osene is received at a facility operated by • Kerosene used for feedstock purposes. • The owner has no reason to believe any a registrant and located within the bulk See Dyed Diesel Fuel and Dyed Kerosene, dis- information on the certificate is false. transfer/terminal system. cussed later, for information on the exemption The operator of the facility where the undyed 3) The removal from the refinery is by: for that fuel.

diesel fuel or undyed kerosene is received is

a) Railcar and the same person operates liable for the tax if the owner meets these condi- Sale or use in Alaska. The excise tax is not

the refinery and the facility at which the tions. The operator is jointly and severally liable imposed on the removal, entry, or sale of diesel

undyed diesel fuel or undyed kerosene if the owner does not meet these conditions. fuel or kerosene in Alaska for ultimate sale or

is received, or use in an exempt area of Alaska. The removal or

Sales to unregistered person. The sale of entry of any diesel fuel or kerosene is not taxa- b) For undyed diesel fuel only, a trailer or undyed diesel fuel or undyed kerosene located ble if all the following requirements are satisfied. semi-trailer used exclusively to trans- within the bulk transfer/terminal system to a per- port the diesel fuel from a refinery (de- son that is not a registrant is taxable if tax was 1) The person otherwise liable for the tax (po- scribed in (1)) to a facility (described in not previously imposed under any of the events sition holder, refiner, or enterer): (2)) less than 20 miles from the refin- discussed earlier. ery. a) Is a registrant, The seller is liable for the tax. However, a

seller meeting all the following conditions at the b) Can show satisfactory evidence of the

nontaxable nature of the transaction, Entry into the United States. The entry of time of the sale will not be liable for the tax.

and undyed diesel fuel or undyed kerosene into the • The seller is a registrant. United States is taxable if the entry meets either c) Has no reason to believe the evidence

of the following conditions. • The seller has an unexpired notification is false.

certificate (discussed under Gasoline) • It is made by bulk transfer and the enterer from the buyer. 2) In the case of a removal from a terminal, is not a registrant. the terminal is an approved terminal. • The seller has no reason to believe any • It is not made by bulk transfer. information on the certificate is false. 3) The owner of the fuel immediately after the

The enterer is liable for the tax. removal or entry holds the fuel for its own The buyer of the undyed diesel fuel or undyed use in a nontaxable use (discussed later) Removal from a terminal by unregistered po- kerosene is liable for the tax if the seller meets or is a qualified dealer. sition holder. The removal by bulk transfer of these conditions. The buyer is jointly and severally liable if the seller does not meet these condi- A qualified dealer is any person that holds a undyed diesel fuel or undyed kerosene from a

tions. qualified dealer license from the state of Alaska terminal is taxable if the position holder for that or has been registered by the IRS as a qualified fuel is not a registrant. The position holder is Exception. The tax does not apply to a sale retailer. Satisfactory evidence may include liable for the tax. The terminal operator is jointly if all of the following apply. copies of qualified dealer licenses or exemption and severally liable for the tax if the position certificates obtained for state tax purposes. holder is a person other than the terminal opera- • The buyer’s principal place of business is

tor. However, see Terminal operator’s liability not in the United States. Later sales. The excise tax applies to diesel under Removal from terminal, earlier, for an fuel or kerosene sold by a qualified dealer after • The sale occurs as the fuel is delivered exception. the removal or entry. The tax is imposed at the into a transport vessel with a capacity of at time of the sale and the qualified dealer is liable Bulk transfers not received at approved ter- least 20,000 barrels of fuel. for the tax. However, the sale is not taxable if all minal or refinery. The removal by bulk trans- • The seller is a registrant and the exporter the following requirements are met. fer of undyed diesel fuel or undyed kerosene of record. from a terminal or refinery or the entry of undyed • The fuel is sold in an exempt area of

diesel fuel or undyed kerosene by bulk transfer Alaska. • The fuel was exported.

Page 13
• The buyer buys the fuel for its own use in aviation-grade kerosene other than as a fuel in Credits or Refunds

a nontaxable use or is a qualified dealer. an aircraft or sells the kerosene without first

A credit or refund is allowable to the ultimate obtaining a certificate from its buyer. • The seller can show satisfactory evidence purchaser or registered ultimate vendor for the of the nontaxable nature of the transaction tax on undyed diesel fuel or undyed kerosene Kerosene used for feedstock purposes. and has no reason to believe the evidence used for a nontaxable use. See Publication 378. The excise tax on kerosene is not imposed on is false.

the removal or entry of kerosene if all the following conditions are met. Aviation-grade kerosene. The excise tax on Dyed Diesel Fuel

kerosene is not imposed on the removal from and Dyed Kerosene 1) The person otherwise liable for tax (posi- the terminal or refinery rack or non-bulk entry of tion holder, refiner, or enterer) is a regis- The excise tax is not imposed on the removal, aviation-grade kerosene if all the following con- trant. entry, or sale of diesel fuel or kerosene if all the ditions are met.

2) In the case of a removal from a terminal, following tests are met.

1) The person otherwise liable for tax (posi- the terminal is an approved terminal. • The person otherwise liable for tax (for tion holder, refiner, or enterer) is a regis- 3) Either: example, the position holder) is a regis- trant.

trant.

2) In the case of a removal from a terminal, a) The person otherwise liable for tax • In the case of a removal from a terminal, the terminal is an approved terminal. uses the kerosene for a feedstock pur- the terminal is an approved terminal. pose, or 3) Either: • The diesel fuel or kerosene satisfies the b) The kerosene is sold for use by the

a) The person otherwise liable for tax de- dyeing requirements (described next). buyer for a feedstock purpose and, at livers the kerosene into the fuel supply the time of the sale, the person other- tank of an aircraft and this delivery is wise liable for tax has an unexpired cer- Dyeing requirements. Diesel fuel or kernot in connection with a sale, or tificate (described later) from the buyer osene satisfies the dyeing requirements only if it

b) The kerosene is sold for use as a fuel and has no reason to believe any infor- satisfies one of the following requirements.

in an aircraft, and, at the time of the mation on the certificate is false. • It contains the dye Solvent Red 164 (and sale, the person otherwise liable for tax no other dye) at a concentration spectrally has an unexpired certificate (described Kerosene is used for a feedstock purpose equivalent to at least 3.9 pounds of the later) from the buyer and has no reason when it is used for nonfuel purposes in the man- solid dye standard Solvent Red 26 per to believe any information on the certifi- ufacture or production of any substance other thousand barrels of fuel. cate is false. than gasoline, diesel fuel, or special fuels. For

example, kerosene is used for a feedstock pur- • It contains any dye of a type and in a

pose when it is used as an ingredient in the concentration that has been approved by Certain later sales. The excise tax applies production of paint, but is not used for a feed- the Commissioner. to kerosene sold for use as a fuel in an aircraft

stock purpose when it is used to power machin- (item (3)(b)) if there is a later disqualifying sale.

The tax is imposed at the time of the first later ery at a factory where paint is produced. A Notice required. A legible and conspicuous

disqualifying sale. The seller in that sale is liable feedstock user is a person that uses kerosene notice stating either: DYED DIESEL FUEL,

for the tax. However, a later sale is not a disqual- for a feedstock purpose. A registered feed- NONTAXABLE USE ONLY, PENALTY FOR

ifying sale if either of the following apply to that stock user is a person that has been registered TAXABLE USE or DYED KEROSENE,

sale. by the IRS as a feedstock user. See Registration NONTAXABLE USE ONLY, PENALTY FOR

Requirements, earlier. TAXABLE USE must be: • The seller has, at the time of the later sale,

an unexpired certificate from the buyer Later sales. The excise tax applies to ker- 1) Provided by the terminal operator to any and has no reason to believe any informa- osene sold for use by the buyer for a feedstock person that receives dyed diesel fuel or tion on the certificate is false. purpose (item (3)(b)) if the buyer in that sale dyed kerosene at a terminal rack of that

• The seller delivers the kerosene into the later sells the kerosene. The tax is imposed at operator, and

the time of the later sale and that seller is liable fuel supply tank of an aircraft. 2) Posted by a seller on any retail pump or for the tax.

other delivery facility where it sells dyed Certificate. The certificate from the buyer Certificate. The certificate from the buyer diesel fuel or dyed kerosene for use by its certifies the kerosene will be used by the buyer certifies the buyer is a registered feedstock user buyer. as a fuel in an aircraft or resold for that use. The and the kerosene will be used by the buyer for a certificate may be included as part of any busi- The notice under item (1) must be provided feedstock purpose. The certificate may be in- ness records normally used for a sale. A model by the time of the removal and must appear on cluded as part of any business records normally certificate is shown in Appendix C all shipping papers, bills of lading, and similar as Model used for a sale. A model certificate is shown in

Certificate F. Your certificate must contain all documents accompanying the removal of the Appendix C as Model Certificate G. Your certifi- fuel. information necessary to complete the model. cate must contain all information necessary to A certificate expires on the earliest of the Any seller that fails to post the required no- complete the model. following dates. tice under item (2) is presumed to know that the A certificate expires on the earliest of the fuel will be used for a taxable use (a use other • The date 1 year after the effective date following dates. than a nontaxable use listed later). That seller is (not earlier than the date signed) of the subject to the penalty described next. certificate. • The date 1 year after the effective date

(not earlier than the date signed) of the • The date the seller is provided a new cer- Penalty. A penalty is imposed on a person if certificate.

tificate or notice that the current certificate any of the following situations apply. • The date the seller is provided a new cer- is invalid.

tificate or notice that the current certificate 1) Any dyed fuel is sold or held for sale by • The date the seller is notified the buyer’s is invalid. the person for a use the person knows or right to provide a certificate has been with- has reason to know is not a nontaxable drawn. • The date the seller is notified the buyer’s use of the fuel. registration has been revoked or susThe buyer must provide a new certificate if 2) Any dyed fuel is held for use or used by pended.

any information on a certificate has changed. the person for a use other than a nontaxThe IRS may withdraw the buyer’s right to The buyer must provide a new certificate if able use and the person knew, or had reaprovide a certificate if the buyer uses the any information on a certificate has changed. son to know, that the fuel was dyed.

Page 14
3) The person willfully alters, or attempts to ally liable for the tax if the seller knows or has farms, orchards, plantations, ranches, nuralter, the strength or composition of any reason to know that the fuel will be used for series, ranges, and feedyards for fattening catdye in dyed fuel. other than a nontaxable use. Generally, a seller tle. It also includes structures such as

of diesel fuel or kerosene is not liable for tax on greenhouses used primarily for raising agricul- The penalty is the greater of $1,000 or $10 fuel delivered into the fuel supply tank of a bus or tural or horticultural commodities. A fish farm is per gallon of the dyed diesel fuel or dyed ker- train. However, the person that delivers the fuel an area where fish are grown or raised—not osene involved. After the first violation, the into the fuel supply tank of a train, rather than the merely caught or harvested. $1,000 portion of the penalty increases depend- train operator, is liable for the tax if, at the time of ing on the number of violations. Farming purposes. Diesel fuel or kerosene delivery, the deliverer and the train operator are This penalty is in addition to any tax imposed is used on a farm for farming purposes if it is both registered by the IRS as train operators and on the fuel. bought by the owner, tenant, or operator of the a written agreement between them requires the If the penalty is imposed, each officer, em- farm and used for any of the following purposes. deliverer to pay the tax. ployee, or agent of a business entity who willfully

participated in any act giving rise to the penalty Exemptions from the back-up tax. The 1) To cultivate the soil, or to raise or harvest

any agricultural or horticultural commodity. is jointly and severally liable with that entity for back-up tax does not apply to a delivery of diesel

the penalty. fuel or kerosene for uses (1) through (8) listed 2) To raise, shear, feed, care for, train or If you are liable for the penalty, you may also under Nontaxable Uses, next. manage livestock, bees, poultry, fur-bear- be liable for the back-up tax, discussed later. In addition, since the back-up tax is imposed ing animals, or wildlife. However, the penalty applies only to dyed diesel only on the delivery into the fuel supply tank of a 3) To operate, manage, conserve, improve, fuel and dyed kerosene, while the back-up tax diesel-powered vehicle, bus, or train, the tax

may apply to other fuels. The penalty may apply or maintain your farm and its tools and does not apply to diesel fuel or kerosene used equipment. if the fuel is held for sale or use for a taxable use as heating oil or in stationary engines.

while the back-up tax does not apply unless the 4) To handle, dry, pack, grade, or store any fuel is delivered into a fuel supply tank. raw agricultural or horticultural commodity

Exception to penalty. The penalty under Nontaxable Uses (as provided below).

item (3) will not apply in any of the following The following are nontaxable uses of diesel fuel 5) To plant, cultivate, care for, or cut trees or situations. and kerosene. to prepare (other than sawing logs into

lumber, chipping, or other milling) trees for • Diesel fuel or kerosene meeting the dye- 1) Use on a farm for farming purposes (dis- market, but only if the planting, etc., is inci- ing requirements (described earlier) is cussed later). dental to your farming operations (as pro- blended with any undyed liquid and the

2) Exclusive use by a state (defined earlier vided below). resulting product meets the dyeing requirements. under Definitions). Diesel fuel or kerosene is treated as used on

3) Use in a vehicle owned by an aircraft mu- a farm for farming purposes if it is bought by a • Diesel fuel or kerosene meeting the dyeseum (as discussed later under Aviation person other than the owner, tenant, or operator ing requirements (described earlier) is

Fuel). of the farm and used on the farm for any of the blended with any other liquid (other than purposes in item (1) or (2). diesel fuel or kerosene) that contains the 4) Use in a school bus (discussed later). type and amount of dye required to meet Item (4) applies only if more than one-half of

the dyeing requirements. 5) Use in a qualified local bus (discussed the commodity so treated during the tax year

later). was produced on the farm. Commodity refers to • The alteration or attempted alteration oc- a single raw product. For example, apples would curs in an exempt area of Alaska. See 6) Use in a highway vehicle that: be one commodity and peaches another. The Sale or use in Alaska, earlier. a) Is not registered (and is not required to more-than-one-half test applies separately to

• Diesel fuel or kerosene meeting the dye- be registered) for highway use under each commodity.

ing requirements (described earlier) is the laws of any state or foreign country, Item (5) applies if the operations are minor in

blended with diesel fuel or kerosene not and nature when compared to the total farming opermeeting the dyeing requirements and the ations. b) Is used in the operator’s trade or busi- blending occurs as part of a nontaxable ness or for the production of income. Not used for farming purposes. Diesel use (other than export), discussed later. fuel or kerosene is not used for farming pur7) Exclusive use by a nonprofit educational poses if it is used in any of the following ways.

Back-Up Tax organization. • Off the farm, such as on the highway or in

Tax is imposed on the delivery of any of the 8) Use in a highway vehicle owned by the noncommercial aviation, even if the fuel is

United States that is not used on a high- following into the fuel supply tank of a used in transporting livestock, feed, crops,

diesel-powered highway vehicle, train, or bus. way. or equipment.

• Any dyed diesel fuel or dyed kerosene for 9) Exported. • For personal use, such as mowing the

other than a nontaxable use. lawn. 10) Use other than as a fuel in a propulsion

• Any diesel fuel or kerosene on which a engine of a diesel-powered highway vehi- • In processing, packaging, freezing, or cancredit or refund (for fuel used for a nontax- cle (such as home heating oil). ning operations.

able purpose) has been allowed. 11) Use as a fuel in a propulsion engine of a • In processing crude gum into gum spirits

• Any liquid other than gasoline, diesel fuel, diesel-powered train (subject to back-up of turpentine or gum resin or in processing

or kerosene. tax, discussed earlier). maple sap into maple syrup or maple

sugar. 12) Use in an intercity or local bus meeting Generally, this back-up tax is imposed at a certain qualifications, discussed later (sub- rate of 24.4 cents a gallon. However, the rate for ject to back-up tax, discussed earlier). Buses. Diesel fuel or kerosene used in a fuel for a diesel-powered train is 4.4 cents a school bus or in a qualified local bus is used for a gallon. The rate for delivery into the fuel supply Used on a farm for farming purposes. Die- nontaxable use and is not subject to excise tax. tank of certain intercity or local buses is 7.4 sel fuel or kerosene is used on a farm for farming However, fuel used in an intercity or local bus is cents a gallon. purposes only if used in carrying on a trade or subject to a reduced rate of tax.

business of farming, on a farm in the United Liability for tax. Generally, the operator of the School bus. A school bus is a bus engaged States, and for farming purposes. vehicle, bus, or train into which the fuel is deliv- in the transportation of students and employees

ered is liable for the tax. In addition, the seller of Farm. A farm includes livestock, dairy, fish, of schools. A school is an educational organizathe diesel fuel or kerosene is jointly and sever- poultry, fruit, fur-bearing animals, and truck tion with a regular faculty and curriculum and a

Page 15
regularly enrolled body of students who attend payment of the tax and who willfully fails to met the reporting requirements, discussed

the place where the educational activities occur. next. perform that duty, or

Qualified local bus. A qualified local bus is • Anyone who willfully causes the person to

a bus meeting all the following tests. fail to pay the tax. Reporting requirements. Generally, the first

producer must file a report (the first producer’s • It is engaged in furnishing (for compensa- report). A model first producer’s report is shown tion) intracity passenger land transporta- Producers. Producers include refiners, blend- in Appendix C as Model Certificate H. The report tion available to the general public. ers, and wholesale distributors of aviation fuel must contain all information needed to complete and dealers selling aviation fuel exclusively to • the model. It operates along scheduled, regular producers of aviation fuel if these persons have routes. been registered by the IRS. The term also in- Providing information. The first producer

• It has a seating capacity of at least 20 cludes the actual producer of aviation fuel. See must give a copy of the report to the person to

adults (excluding the driver). Registration for Certain Activities, earlier. whom the first producer sells the aviation fuel.

Any person buying aviation fuel at a reduced Each subsequent seller must give to its • It is under contract with (or receiving more rate is the producer of that fuel. buyer a statement that provides all the informa- than a nominal subsidy from) any state or tion necessary to complete the “Statement of local government to furnish that transpor- Wholesale distributors. To qualify as a Subsequent Seller (Aviation Fuel)” shown in Ap- tation. wholesale distributor, you must hold yourself out pendix C as Model Certificate I. The statement to the public as being engaged in the trade or Intracity passenger land transportation means can be at the bottom or on the back of the copy business of either of the following. land transportation of passengers between of the first producer’s report (or in an attached

points located within the same metropolitan document). 1) Selling aviation fuel to producers or retail- area. It includes transportation along routes that If the first producer’s report relates to avia- ers or to users who purchase in bulk quan- cross state, city, or county boundaries if the tion fuel divided among more than one buyer, tities (25 gallons or more) and accept routes remain within the metropolitan area. copies of that report should be made when the delivery into bulk storage tanks and one of fuel is divided and a copy given to each buyer. A bus is under contract with a state or local the following applies.

government only if the contract imposes a bona a) At least 30% of your sales of aviation Refund claim. You must make your claim for fide obligation on the bus operator to furnish the fuel during the preceding 12-month pe- refund on Form 8849. Complete Schedule 6 transportation. A subsidy is more than nominal if (Form 8849) and attach it to Form 8849. Do not riod are to these buyers, or it is reasonably expected to exceed an amount include this claim with a claim under another tax equal to 3 cents multiplied by the number of b) At least 50% of the volume of aviation provision. See the form instructions for how and gallons of fuel used in buses on subsidized fuel is sold to these buyers and at least where to file the claim. You must attach all the routes. 500 of your sales during the preceding following information to Schedule 6. A company that operates its buses along 12-month period are made to these subsidized and unsubsidized intracity routes buyers, or • Volume and type of aviation fuel.

may consider its buses qualified local buses • Date on which you acquired the aviation only when the buses are used on the subsidized 2) Selling aviation fuel for nontaxable uses fuel included in the claim. intracity routes. (such as use on a farm for farming purposes) and • Amount of tax on the fuel the first producer sell at least 70% of your vol- Intercity or local bus. A reduced tax of 7.4

ume of aviation fuel during the preceding paid to the government and a statement cents a gallon is imposed on dyed fuel delivered 12-month period to these users. that you have not included this tax in the into the fuel supply tank of an intercity or local sales price of the fuel and have not col- bus. (See Back-Up Tax, earlier.) This is a bus Bulk storage tanks. A bulk storage tank is lected it from any buyer. engaged in furnishing (for compensation) pas- a container that holds at least 50 gallons and is senger land transportation available to the gen- • A copy of the first producer’s report (diseral public. The bus must be engaged in one of not the fuel supply tank of any engine mounted cussed earlier) that relates to the aviation on, or attached to, an aircraft. the following activities. fuel covered by the claim.

• Scheduled transportation along regular • A copy of any statement of subsequent

routes regardless of the size of the bus. Refunds of Prior Tax seller that you received with respect to the

aviation fuel. • Nonscheduled transportation if the seating A registered aviation fuel producer holding avia- capacity of the bus is at least 20 adults tion fuel on which a prior tax was paid (and not (not including the driver). Aviation Fuel Exemptions credited or refunded), can get a refund (without

A bus is available to the general public if the bus interest) of the tax. Generally, this applies when Registered producers may sell aviation fuel tax is available for hire to more than a limited num- a producer buys taxed fuel from a retailer. No free or at a tax-reduced rate for sales to the

ber of persons, groups, or organizations. credit against any tax is allowed. persons or for the nontaxable uses described

below, but only if certain prescribed conditions Aviation Fuel Conditions to allowance of refund. A claim are met. No seller of aviation fuel is eligible to for refund of the tax is allowed only if all the claim a credit or refund for aviation fuel used by Aviation fuel is any liquid (other than gasoline or following conditions are met. the buyer for a nontaxable use. diesel fuel) that is suitable for use as a fuel in an 1) A tax on the aviation fuel was paid to the aircraft. Sales to other producers. Registered pro- government by an importer or producer ducers may sell aviation fuel tax free to other (the first producer) and the tax has not registered producers of aviation fuel. The buyer Taxable Event been credited or refunded. must give the seller a written statement contain2) After the tax was imposed, the fuel was ing the buyer’s registration number. Tax of 21.9 cents per gallon is imposed on the acquired by a registered aviation fuel pro- sale or use of aviation fuel by its producer or ducer (the second producer). Sales for nontaxable uses. A registered pro- importer. The producer or importer is liable for ducer may sell aviation fuel tax free for any of the tax. 3) The second producer has filed a timely the following uses. claim for refund that contains the informaAdditional persons liable. When the person tion required (see Refund claim, later). • Use other than as a fuel in the propulsion

liable for the tax willfully fails to pay the tax, joint engine of an aircraft (such as use as heat- 4) The first producer and any person that and several liability for the tax is imposed on: ing oil). owns the fuel after its sale by the first pro-

• Any officer, employee, or agent of the per- ducer and before its purchase by the sec- • Use in military aircraft owned by the

son who is under a duty to ensure the United States or a foreign country. ond producer (a subsequent seller) have

Page 16
• Use in a domestic air carrier engaged in eligible for assistance under the Airport and Air- Treat the separation of special motor fuel

foreign trade or trade between the United way Development Act of 1970, or otherwise use from an alcohol mixture on which tax has been

States and any of its possessions. services provided pursuant to section 44509 or imposed at a rate for special motor fuels/alcohol

44913(b) or subchapter I of chapter 471 of title mixture as a sale of special motor fuel. The tax • Use in a foreign air carrier engaged in 49, United States Code, during such use. For on the sale is imposed on the person who makes foreign trade or trade between the United item (1), each flight segment is treated as a the separation. Reduce the tax on special motor States and any of its possessions, but only separate flight. fuel by the tax already paid on the alcohol mix- if the country in which the foreign carrier is ture. registered allows U.S. carriers reciprocal Fixed-wing air ambulance uses. Aviation

privileges. For a list of these countries, fuel may be sold tax free for use in a fixed-wing Qualified methanol and ethanol fuels. A

see Revenue Ruling 74–346 in Cumula- aircraft providing air transportation for emer- special rate applies to these fuels. These fuels

tive Bulletin 1974–2, Revenue Ruling gency medical services. The exemption applies consist of at least 85% methanol, ethanol, or

75–109 in Cumulative Bulletin 1975–1, if the aircraft is equipped for, and exclusively other alcohol produced from a substance other

and Revenue Rulings 75–398 and dedicated on that flight to, acute care emer- than petroleum or natural gas.

75–526 in Cumulative Bulletin 1975–2. gency medical services. Partially exempt methanol and ethanol fuels.

• Use on a farm for farming purposes, as Sales to commercial airlines. Registered A special rate applies to these fuels. These fuels

discussed earlier under Diesel Fuel and producers may sell aviation fuel at the tax-re- consist of at least 85% methanol, ethanol, or

Kerosene. duced rate of 4.4 cents a gallon to a registered other alcohol produced from natural gas.

• Use in an aircraft or vehicle owned by an commercial aircraft operator for use as a fuel in Motor vehicle. For the purpose of applying aircraft museum, discussed next. commercial aviation (other than foreign trade). the tax on the delivery of special motor fuels, See Registration for Certain Activities, earlier. motor vehicles include all types of vehicles, • Certain helicopter and fixed-wing air am- Commercial aviation is any use of an aircraft whether or not registered (or required to be bulance uses, discussed later. in the business of transporting persons or prop- registered) for highway use, that have both the • Exclusive use by a state, as defined ear- erty by air for pay. However, commercial avia- following characteristics. lier under Definitions. tion does not include any of the following uses. • They are propelled by a motor. • Exclusive use by the United Nations. • Any use of an aircraft that has a maximum

certificated takeoff weight of 6,000 pounds • They are designed for carrying or towing • Exclusive use by a nonprofit educational or less, unless the aircraft is operated on loads from one place to another, regard- organization. an established line. For more information, less of the type of material or load carried

see Small aircraft or towed. • Export. under Special Rules on

Transportation Taxes, earlier. Motor vehicles do not include any vehicle that A buyer for these uses gives its supplier a • Any use exclusively for the purpose of moves exclusively on rails, or any of the follow- signed exemption certificate stating the skydiving. ing items. buyer’s name, address, employer identification

number, registration number (if applicable), and • Any use of an aircraft owned or leased by Farm tractors Trench diggers

intended use. A buyer may give a separate ex- a member of an affiliated group and un- Power shovels Bulldozers

emption certificate for each purchase or may available for hire by nonmembers. For Road graders Road rollers

give one certificate to cover all purchases from a Similar equipment that does more information, see Aircraft used by afparticular seller for up to 1 year. filiated corporations under Special Rules not carry or tow a load

on Transportation Taxes, earlier.

Aircraft museums. Aviation fuel may be sold To buy at a tax-reduced rate, the airline gives Taxable Event tax free for use in an aircraft or vehicle (such as the seller a signed exemption certificate stat- a ground servicing vehicle for aircraft) owned by Tax is imposed on the delivery of special motor ing the buyer’s name, address, employer identi- an aircraft museum and used exclusively for fication number, registration number, and fuels into the fuel supply tank of the propulsion purposes described in item (3) of the following engine of a motor vehicle or motorboat. How- intended use of the fuel. An airline may give a definition.

separate exemption certificate for each ever, there is no tax on the delivery if tax was An aircraft museum is an organization with purchase or may give one certificate to cover all imposed under the bulk sales rule, discussed all the following characteristics. purchases from a particular seller for up to 1 later, or the delivery is for a nontaxable use,

year. listed later. If the delivery is in connection with a 1) It is exempt from income tax as an organi- sale, the seller is liable for the tax. If it is not in zation described in section 501(c)(3) of the

Credits or Refunds connection with a sale, the operator of the vehi- Internal Revenue Code.

cle or boat is liable for the tax.

2) It is operated as a museum under a state A credit or refund is allowable to the ultimate Liquefied petroleum gas (LPG). Tax is im- (or District of Columbia) charter. purchaser for taxed aviation fuel used for a non- posed on the delivery of LPG into the fuel supply taxable use. See Publication 378. 3) It is operated exclusively for acquiring, ex- tank of certain intercity and local buses and hibiting, and caring for aircraft of the type qualified local and school buses and must be used for combat or transport in World Special Motor Fuels reported on Form 720 even though a credit or War II. refund may be allowable for LPG used in those Special motor fuel means any liquid fuel includ- buses. ing liquefied petroleum gas, liquefied natural Certain helicopter uses. Aviation fuel may be gas, benzol, benzene, and naptha. However, Bulk sales. Tax is imposed on the sale of sold tax free for use in a helicopter used for one gasoline, diesel fuel, kerosene, gas oil, and fuel special motor fuels that is not in connection with of the following purposes. oil do not qualify as special motor fuel. delivery into the fuel supply tank of the propul1) Transporting individuals, equipment, or sion engine of a motor vehicle or motorboat if the Special motor fuels/alcohol mixture. This is supplies in the exploration for, or the de- buyer furnishes a written statement to the seller a blend of alcohol with special motor fuels. The velopment or removal of, hard minerals, stating the entire quantity of the fuel covered by blend must be at least 10% alcohol that is 190 oil, or gas. the sale is for other than a nontaxable use, listed proof or more. Figure the proof of any alcohol later. The seller is liable for this tax. 2) Planting, cultivating, cutting, transporting, without regard to any added denaturants.

or caring for trees (including logging oper- The alcohol includes methanol or ethanol. Tax rate. The special motor fuels tax rate deations). This includes methanol produced from methane pends on the type of fuel involved. The tax rate

gas formed in waste disposal sites. But it does for LPG is shown on Form 720 (IRS No. 61). The 3) Providing emergency medical services. not include alcohol produced from petroleum, tax rates for all other special motor fuels are

For items (1) and (2), this applies if the helicop- natural gas, coal (including peat), or any deriva- shown in the Form 720 instructions for other

ter does not take off from, or land at, a facility tive or product of these items. fuels (IRS No. 79).

Page 17
Nontaxable Uses Nontaxable Uses 48.4042–1(g) of the regulations for a list of

these waterways.

The following are nontaxable uses of special The following are nontaxable uses of CNG.

motor fuels. Commercial waterway transportation. • In an off-highway business use, as dis- Commercial waterway transportation is the use • In an off-highway business use (discussed cussed earlier under Special Motor Fuels. of a vessel on inland or intracoastal waterways later). • Use in a boat engaged in commercial fish- for either of the following purposes.

• Use in a boat engaged in commercial fish- ing. • The use is in the business of transporting ing. • Use in a school bus or qualified local bus, property for compensation or hire.

• Use on a farm for farming purposes, as as discussed earlier under Diesel Fuel and • The use is in transporting property in the discussed earlier under Diesel Fuel and Kerosene. business of the owner, lessee, or operator Kerosene. • Use on a farm for farming purposes, as of the vessel, whether or not a fee is

• Exclusive use by a state, as defined ear- discussed earlier under Diesel Fuel and charged.

Kerosene. lier under Definitions.

The operation of all vessels meeting either of • By nonprofit educational organizations for • Exclusive use by a state, as defined ear- these requirements is commercial waterway lier under Definitions. their exclusive use, as discussed earlier transportation regardless of whether the vessel under Communications Tax. • By nonprofit educational organizations for is actually transporting property on a particular

• By the United Nations for its official use. their exclusive use, as discussed earlier voyage. (However, see Exemptions, later.) The

under Communications Tax. tax is imposed on fuel consumed in vessels • Use in a vehicle owned by an aircraft mu- while engaged in any of the following activities. seum as discussed earlier under Aviation • By the United Nations for its official use.

Fuel. • Moving without cargo. • Use in a vehicle owned by an aircraft mu-

• Use in any boat operated by the United seum, as discussed earlier under Aviation • Awaiting passage through locks.

States for its exclusive use or any vessel Fuel. • Moving to or from a repair facility. of war of any foreign nation. • Use in any boat operated by the United • Dislodging vessels grounded on a sand States for its exclusive use or any vessel bar.

Off-highway business use. This is use in a of war of any foreign nation.

highway vehicle that is not registered (or re- • Fleeting barges into a single tow.

quired to be registered) for highway use under There is no tax on a delivery in connection • Maneuvering around loading and unload- the laws of any state or foreign country and is with a sale of CNG only if, by the time of sale, the ing docks. used in the operator’s trade or business or for seller meets both the following conditions.

the production of income. It also includes use in • The seller has an unexpired certificate Liquid fuel. Liquid fuel includes diesel fuel, a vehicle owned by the United States that is not from the buyer. Bunker C residual fuel oil, special motor fuel, used on a highway. • The seller has no reason to believe any and gasoline. The tax is imposed on liquid fuel

information in the certificate is false. actually consumed by a vessel’s propulsion engine and not on the unconsumed fuel in a

Compressed Natural Gas vessel’s tank. Certificate. The certificate from the buyer certifies the CNG will be used in a nontaxable use Dual use of liquid fuels. The tax applies to all Tax applies to compressed natural gas (CNG) (listed earlier). The certificate may be included taxable liquid used as a fuel in the propulsion of under the circumstances described next. as part of any business records normally used the vessel, regardless of whether the engine (or for a sale. A model certificate is shown in Appen- other propulsion system) is used for another dix C as Model Certificate J. Your certificate Taxable Event purpose. The tax applies to all liquid fuel con- must contain all information necessary to com- sumed by the propulsion engine even if it oper- plete the model. Tax is imposed on the delivery of CNG into the ates special equipment by means of a power A certificate expires on the earliest of the fuel supply tank of the propulsion engine of a take-off or power transfer. For example, the fuel following dates. motor vehicle or motorboat. However, there is used in the engine both to operate an alternator,

no tax on the delivery if tax was imposed under • The date 1 year after the effective date generator, or pumps and to propel the vessel is

the bulk sales rule discussed next, or the deliv- (which may be no earlier than the date taxable.

ery is for a nontaxable use, listed later. If the signed) of the certificate. The tax does not apply to fuel consumed in

delivery is in connection with a sale, the seller is engines not used to propel the vessel. • The date a new certificate is provided to liable for the tax. If it is not in connection with a If you draw liquid fuel from the same tank to the seller. sale, the operator of the boat or vehicle is liable operate both a propulsion engine and a nonfor the tax. • The date the seller is notified the buyer’s propulsion engine, determine the fuel used in

right to provide a certificate has been with- the nonpropulsion engine and exclude that fuel

Bulk sales. Tax is imposed on the sale of drawn. from the tax. IRS will accept a reasonable estiCNG that is not in connection with delivery into mate of the fuel based on your operating experithe fuel supply tank of the propulsion engine of a ence, but you must keep records to support your

motor vehicle or motorboat if the buyer furnishes Fuels Used on Inland allocation.

a written statement to the seller that the entire Waterways quantity of the CNG covered by the sale is for Voyages crossing boundaries of the speciuse as a fuel in a motor vehicle or motorboat and Tax applies to liquid fuel used in the propulsion fied waterways. The tax applies to fuel consystem of commercial transportation vessels sumed by a vessel crossing the boundaries of the seller has given the buyer a written acknowledgement of receipt of the statement. The seller while traveling on certain inland and intracoastal the specified waterways only to the extent of fuel

of the CNG is liable for the tax. waterways. The tax generally applies to all types consumed for propulsion while on those waterof vessels, including ships, barges, and tug- ways. Generally, the operator may figure the

Tax rate. The rate is 48.54 cents per thousand boats. fuel so used during a particular voyage by multicubic feet (determined at standard temperature plying total fuel consumed in the propulsion enand pressure). Inland and intracoastal waterways. Inland gine by a fraction. The numerator of the fraction

and intracoastal waterways on which fuel con- is the time spent operating on the specified waMotor vehicle. For this purpose, motor vehi- sumption is subject to tax are specified in sec- terways and the denominator is the total time

cle has the same meaning as given under Spe- tion 206 of the Inland Waterways Revenue Act spent on the voyage. This calculation cannot be

cial Motor Fuels, earlier. of 1978, as amended. See section used where it is found to be unreasonable.

Page 18
Taxable event. Tax of 24.4 cents a gallon is A manufacturer who sells a taxable article in

imposed on liquid fuel used in the propulsion knockdown condition is liable for the tax. The Your records should include all of the followsystem of a vessel. ing information. person who buys these component parts and

The person who operates (or whose employ- assembles a taxable article may also be liable • The acquisition date and quantity of fuel ees operate) the vessel in which the fuel is for tax as a further manufacturer depending on delivered into storage tanks or the tanks consumed is liable for the tax. The tax is paid the labor, material, and overhead required to on your vessel. with Form 720. No tax deposits are required. assemble the completed article if the article is

• The identification number or name of each assembled for business use.

Exemptions. Certain types of commercial wa- vessel using the fuel. Importer. An importer is a person who terway transportation are excluded from the tax. • The departure time, departure point, route brings a taxable article into the United States, or

Fishing vessels. Fuel is not taxable when traveled, destination, and arrival time for withdraws a taxable article from a customs

used by a fishing vessel while traveling to a each vessel. bonded warehouse for sale or use in the United

fishing site, while engaged in fishing, or while States.

returning from the fishing site with its catch. A If you claim an exemption from the tax, include vessel is not transporting property in the busi- Sale. A sale is the transfer of the title to, or the in your records the following additional informa- ness of the owner, lessee, or operator by merely substantial incidents of ownership in, an article tion as it pertains to you. transporting fish or other aquatic animal life to a buyer for consideration which may consist of

caught on the voyage. • The draft of the vessel on each voyage. money, services, or other things.

However, the tax does apply to fuel used by • The type of vessel in which you used the Use considered sale. A manufacturer who a commercial vessel along the specified water- fuel. uses a taxable article is liable for the tax in the ways while traveling to pick up aquatic animal same manner as if it were sold. life caught by another vessel and while trans- • The ultimate use of the cargo (for vessels

porting the catch of that other vessel. operated by state or local governments). Lease considered sale. The lease of an

article (including any renewal or extension of the Deep-draft ocean-going vessels. Fuel is lease) by the manufacturer is generally consid- not taxable when used by a vessel designed Alcohol Sold as Fuel ered a taxable sale. However, for the gas guz- primarily for use on the high seas if it has a draft But Not Used as Fuel zler tax, only the first lease (excluding any of more than 12 feet on the voyage. For each renewal or extension) of the automobile by the voyage, figure the draft when the vessel has its If you sell or use alcohol (either mixed or manufacturer is considered a sale. greatest load of cargo and fuel. A voyage is a straight) as a fuel, you may be eligible for an

round trip. If a vessel has a draft of more than 12 income tax credit. Use Form 6478, Credit for Manufacturers taxes based on sales price. feet on at least one way of the voyage, the Alcohol Used as Fuel, to figure the credit. For The manufacturers taxes imposed on the sale of vessel satisfies the 12-foot draft requirement for more information about this credit, see Alcohol sport fishing equipment, electric outboard mo- the entire voyage. Fuel Credit in Publication 378. tors, sonar devices, bows, and arrow compoPassenger vessels. Fuel is not taxable If the credit was claimed, you are liable for an nents are based on the sale price of the article.

when used by vessels primarily for the transpor- excise tax if you did any of the following. The taxes imposed on coal are based either on

the sale price or the weight. tation of persons. The tax does not apply to fuel • Used the mixture or straight alcohol other used in commercial passenger vessels while The price for which an article is sold includes than as a fuel. the total consideration paid for the article, transporting property in addition to transporting

passengers. Nor does it apply to ferryboats car- • Separated the alcohol from a mixture. whether that consideration is in the form of

rying passengers and their cars. money, services, or other things. However, you • Mixed the straight alcohol. include certain charges made when a taxable Ocean-going barges. Fuel is not taxable article is sold and you exclude others. To figure when used in tugs to move LASH and SEABEE Report the tax on Form 720. The rate of tax the price on which you base the tax, use the ocean-going barges released by their ocean-go- depends on the applicable rate used to figure following rules. the credit. No tax deposits are required. ing carriers solely to pick up or deliver international cargoes. 1) Include both the following charges in the

However, it is taxable when any of the follow- price.

ing conditions apply. Manufacturers Taxes a) Any charge for coverings or containers • One or more of the barges in the tow is (regardless of their nature). not a LASH barge, SEABEE barge, or The following discussion of manufacturers taxes other ocean-going barge carried aboard b) Any charge incident to placing the arti- applies to the tax on the following items. an ocean-going vessel. cle in a condition packed ready for shipment. • Sport fishing equipment. • One or more of the barges is not on an

international voyage. • Bows. 2) Exclude all the following amounts from the

• Part of the cargo carried is not being price. • Arrow components.

transported internationally. • Coal. a) The manufacturers excise tax, whether

or not it is stated as a separate charge. State or local governments. No tax is im- • Tires.

posed on the fuel used in a vessel operated by a b) The transportation costs pursuant to • Gas guzzler automobiles. state or local government in transporting prop- the sale. (The cost of transportation of

erty on official business. The ultimate use of the • Vaccines. goods to a warehouse before their

cargo must be for a function ordinarily carried bona fide sale is not excludable.)

out by governmental units. An Indian tribal gov- Manufacturer. The term “manufacturer” in- c) Delivery, insurance, installation, retail ernment is treated as a state only if the fuel is cludes a producer or importer. A manufacturer is dealer preparation costs, and other used in the exercise of an essential tribal gov- any person who produces a taxable article from charges you incur in placing the article ernment function. new or raw material, or from scrap, salvage, or in the hands of the purchaser under a

All operators of vessels used in com- junk material, by processing or changing the bona fide sale. 

mercial waterway transportation who form of an article or by combining or assembling d) Discounts, rebates, and similar al- acquire liquid fuel must keep adequate two or more articles. If you furnish the materials RECORDS

lowances actually granted to the pur- records of all fuel used for taxable purposes. and keep title to those materials and to the chaser. Operators who are seeking an exclusion from finished article, you are considered the manuthe tax must keep records that will support any facturer even though another person actually e) Local advertising charges. A charge

exclusion claimed. manufactures the taxable article. made separately when the article is

Page 19
sold and that qualifies as a charge for does not apply to the taxes on coal and For sales for use as supplies for vessels, if

“local advertising” may, within certain the manufacturer and purchaser are not regis- vaccines.) Supplies for vessels means

limits, be excluded from the sale price. tered, the owner or agent of the vessel must ships’ stores, sea stores, or legitimate

equipment on vessels of war of the United provide an exemption certificate to the manufac- f) Charges for warranty paid at the States or any foreign nation, vessels em- turer before or at the time of sale. See section purchaser’s option. However, a charge ployed in the fisheries or whaling busi- 48.4221–4(d) of the regulations for the certifi- for a warranty of an article that the ness, or vessels actually engaged in cate requirements. manufacturer requires the purchaser to foreign trade. pay to obtain the article is included in Proof of export requirement. Within 6

the sale price on which the tax is fig- • Sale of an article for use by the purchaser months of the date of sale or shipment by the ured. for further manufacture, or for resale by manufacturer, whichever is earlier, the manuthe purchaser to a second purchaser for facturer must receive proof of exportation. See

Bonus goods. Allocate the sale price if you use by the second purchaser for further section 48.4221–3(d) of the regulations for evigive free nontaxable goods with the purchase of manufacture. (This exemption does not dence that qualifies as proof of exportation.

apply to the tax on coal.) Use for further taxable merchandise. Figure the tax only on the manufacture means use in the manufac- Proof of resale for further manufacture re- sale price attributable to the taxable articles. quirement. Within 6 months of the date of sale ture or production of an article subject to or shipment by the manufacturer, whichever is Example. A manufacturer sells a quantity of the manufacturers excise taxes. If you buy earlier, the manufacturer must receive proof that taxable articles and gives the purchaser certain articles tax free and resell or use them the article has been resold for use in further nontaxable articles as a bonus. The sale price of other than in the manufacture of another manufacture. See section 48.4221–2(c) of the the shipment is $1,500. The normal sale price is article, you are liable for the tax on their regulations for evidence that qualifies as proof of $2,000: $1,500 for the taxable articles and $500 resale or use just as if you had manufac- resale. for the nontaxable articles. Since the taxable tured and sold them.

items represent 75% of the normal sale price, Information to be furnished to purchaser. • Sale of an article for export or for resale by the tax is based on 75% of the actual sale price, The manufacturer must indicate to the pur- the purchaser to a second purchaser for or $1,125 (75% of $1,500). The remaining $375 chaser that the articles normally would be sub- export. The article may be exported to a is allocated to the nontaxable articles. ject to tax and are being sold tax free for an foreign country or to a possession of the exempt purpose because the purchaser has United States. (A vaccine shipped to a Taxable Event provided the required certificate. possession of the United States is not

considered to be exported.) If an article is Tax attaches when the title to the article sold sold tax free for export and the manufac- Credits or Refunds passes from the manufacturer to the buyer. turer does not receive proof of export, de- When the title passes depends on the intention The manufacturer may be eligible to obtain a scribed later, the manufacturer is liable for of the parties as gathered from the contract of credit or refund of the manufacturers tax for the tax. sale. In the absence of expressed intention, the certain uses, sales, exports, and price readjust- legal rules of presumption followed in the juris- • Sales of articles of native Indian handi- ments. The claim must set forth in detail the

diction where the sale occurs determine when craft, such as bows and arrow compo- facts upon which the claim is based.

title passes. nents, manufactured by Indians on

If the taxable article is used by the manufac- reservations, in Indian schools, or under Uses, sales, and exports. A credit or refund

turer, the tax attaches at the time use begins. U.S. jurisdiction in Alaska. (without interest) of the manufacturers taxes

The manufacturer is liable for the tax. may be allowable if a tax-paid article is, by any

person:

Partial payments. The tax applies to each Requirements for Exempt Sales • Exported, partial payment received when taxable articles The following requirements must be met for a are: • Used or sold for use as supplies for ves- sale to be exempt from the manufacturers tax. sels (except for coal and vaccines), • Leased,

Registration requirements. The manufac- • Sold to a state or local government for its • Sold conditionally, turer, first purchaser, and second purchaser in exclusive use (except for coal, gas guz-

• Sold on installment with chattel mortgage, the case of resales must be registered. See the zlers, and vaccines),

or Form 637 instructions for more information. • Sold to a nonprofit educational organiza-

• Sold on installment with title to pass in the Exceptions to registration requirements. tion for its exclusive use (except for coal,

future. Registration is not required for any of the follow- gas guzzlers, and vaccines), or

ing. To figure the tax, multiply the partial payment by • Used for further manufacture of another

the tax rate in effect at the time of the payment. article subject to the manufacturers taxes • State or local governments. (except for coal). • Foreign purchasers of articles sold or re- Exemptions sold for export. If a tax-paid article is exported, the exporter or

The following sales are exempt from the manu- shipper may claim a credit or refund if the manu- • The United States.

facturers tax. facturer waives its right to claim the credit or • Parties to a sale of supplies for vessels. refund. In the case of a tax-paid article used to • Sale of an article to a state or local gov- make another taxable article, the subsequent ernment for the exclusive use of the state

Certification requirement. manufacturer may claim the credit or refund. If the purchaser is or local government. (This exemption does required to be registered, the purchaser must not apply to the taxes on coal, gas guz- Price readjustments. In addition, a credit or give the manufacturer its registration number zlers, and vaccines.) State is defined in refund (without interest) may be allowable for a Definitions and certify the exempt purpose for which the under Fuel Taxes, earlier. tax-paid article for which the price is readjusted article will be used. The information must be in by reason of return or repossession of the article • Sale of an article to a nonprofit educa- writing and may be noted on the purchase order or a bona fide discount, rebate, or allowance for tional organization for its exclusive use. or other document furnished by the purchaser to taxes based on price. (This exemption does not apply to the the seller in connection with the sale.

taxes on coal, gas guzzlers, and vac- For a sale to a state or local government, an Conditions to allowance. To claim a credit or cines.) Nonprofit educational organization exemption certificate must be signed by an of- refund in the case of export, supplies for ves- is defined under Communications Tax. ficer or employee authorized by the state or local sels, or sales to a state or local government or

• Sale of an article for use by the purchaser nonprofit educational organization, the person government. See section 48.4221–5(c) of the

as supplies for vessels. (This exemption who paid the tax certifies on the claim that one of regulations for the certificate requirements.

Page 20
the following applies and that the claimant has ble bow and any quiver suitable for use with 1) Fishing rods and poles (and component the required supporting information. arrows, described next. For a list of taxable and parts), fishing reels, fly fishing lines, and nontaxable articles, see Revenue Ruling 98–5 • The tax was neither included in the price other fishing lines not over 130 pounds in Cumulative Bulletin 1998–1 (or in Internal of the article nor collected from a vendee. test, fishing spears, spear guns, and spear Revenue Bulletin 1998–2).

• The person has repaid, or agreed to re- tips. Pay this tax with your return. No tax deposit

2) Items of terminal tackle, including leaders, is required. pay, the tax to the ultimate vendor of the

article. artificial lures, artificial baits, artificial flies,

fishing hooks, bobbers, sinkers, snaps, Arrow Components • The person has secured the written con- drayles, and swivels (but not including nat- sent of the ultimate vendor to allowance of ural bait or any item of terminal tackle de- A tax of 12.4% of the sale price is imposed on

the credit or refund. signed for use and ordinarily used on the sale by the manufacturer of any shaft, point,

fishing lines not described in (1)). nock, or vane of a type used in the manufacture The ultimate vendor generally is the seller mak- of any arrow that after its assembly meets either ing the sale that gives rise to the overpayment of 3) The following items of fishing supplies and of the following conditions. tax. accessories: fish stringers, creels, tackle

boxes, bags, baskets, and other contain- • It measures 18 inches or more in overall To claim a credit or refund for further manuers designed to hold fish, portable bait length. facture, the claim must include a statement that containers, fishing vests, landing nets, gaff contains the following. • It measures less than 18 inches in overall

hooks, fishing hook disgorgers, and dress- length but is suitable for use with a taxable • The name and address of the manufac- ing for fishing lines and artificial flies. bow, discussed earlier. turer and the date of payment. 4) Fishing tip-ups and tilts.

• An identification of the article for which the Pay this tax with your return. No tax deposit is 5) Fishing rod belts, fishing rodholders, fish- credit or refund is claimed. required. ing harnesses, fish fighting chairs, fishing

• The amount of tax paid on the article and outriggers, and fishing downriggers. Coal the date on which it was paid. See Revenue Ruling 88–52 in Cumulative Bul-

• Information indicating that the article was letin 1988–1 for a more complete description of A tax is imposed on the first sale of coal mined in

used as material in the manufacture or the items of taxable equipment. the United States. The producer of the coal is

liable for the tax. The producer is the person production of, or as a component part of, a Electric outboard boat motors and sonar who has vested ownership of the coal under second article manufactured or produced devices. A tax of 3% of the sale price is im- state law immediately after the coal is severed by the manufacturer, or was sold on or in posed on the sale by the manufacturer of electric from the ground. Determine vested ownership connection with, or with the sale of a sec- outboard motors and sonar devices suitable for without regard to any contractual arrangement ond article manufactured or produced by finding fish. This includes any parts or accesso- for the sale or other disposition of the coal or the the manufacturer. ries sold on or in connection with the sale of payment of any royalties between the producer those articles. The tax on any sonar device, • An identification of the second article. and third parties. A producer includes any per- however, cannot exceed $30. A sonar device son who extracts coal from coal waste refuse suitable for finding fish does not include any For claims by the exporter or shipper, the piles (or from the silt waste product that results device that is a graph recorder, a digital type, a claim must contain the proof of export and a from the wet washing of coal). meter readout, a combination graph recorder, or statement signed by the person that paid the tax The tax is not imposed on coal extracted a combination meter readout. waiving the right to claim a credit or refund. The from a riverbed by dredging if it can be shown

statement must include the amount of tax paid, Certain equipment resale. The tax on the that the coal has been taxed previously.

the date of payment, and the office to which it sale of sport fishing equipment is imposed a

was paid. Tax rates. The tax on underground-mined second time under the following circumstances. coal is the lower of: To claim a credit or refund for a price read- If the manufacturer sells a taxable article to any

person, the manufacturer is liable for the tax. If justment, the person who paid the tax must • $1.10 a ton, or

submit, with the claim, a statement that contains the purchaser or any other person then sells it to • 4.4% of the sale price. the following. a person who is related (discussed next) to the

manufacturer, that related person is liable for a

• A description of the circumstances that The tax on surface-mined coal is the lower of: second tax on any subsequent sale of the artigave rise to the price readjustment. cle. The second tax, however, is not imposed if • 55 cents a ton, or

the constructive sale price rules under section • An identification of the article whose price • 4.4% of the sale price. 4216(b) of the Internal Revenue Code apply to was readjusted. the sale by the manufacturer.

• The price at which the article was sold. Coal will be taxed at the 4.4% rate if the selling If the second tax is imposed, a credit for tax price is less than $25 a ton for previously paid by the manufacturer is available • The amount of tax paid on the article and underground-mined coal and less than $12.50 a provided the related person can document the the date on which it was paid. ton for surface-mined coal. Apply the tax propor- tax paid. The documentation requirement is

• The name and address of the purchaser. tionately if a sale or use includes a portion of a generally satisfied only through submission of ton. copies of actual records of the person that previ- • The amount repaid to the purchaser or ously paid the tax. credited to the purchaser’s account. Example. If you sell 21,000 pounds (10.5

Related person. For the tax on sport fishing tons) of coal from an underground mine for

equipment, a person is a related person of the $525, the price per ton is $50. The tax is $1.10 × Sport Fishing Equipment manufacturer if that person and the manufac- 10.5 tons ($11.55).

turer have a relationship described in section A tax of 10% of the sale price is imposed on 465(b)(3)(C) of the Internal Revenue Code. Coal production. Coal is produced from sur- many articles of sport fishing equipment sold by face mines if all geological matter (trees, earth, the manufacturer. This includes any parts or Bows rock) above the coal is removed before the coal accessories sold on or in connection with the is mined. Treat coal removed by auger and coal sale of those articles. A tax of 11% of the sale price is imposed on the reclaimed from coal waste refuse piles as pro- Pay this tax with your return. No tax deposits sale by the manufacturer of any bow having a duced from a surface mine.

are required. draw weight of 10 pounds or more. The tax also Treat coal as produced from an underground

Sport fishing equipment includes all the fol- is imposed on the sale of any part or accessory mine when the coal is not produced from a

lowing items. suitable for inclusion in or attachment to a taxa- surface mine. In some cases, a single mine may

Page 21
yield coal from both surface mining and under- foreign country. For example, coal is in the cept in the case of an automobile bus chassis or

ground mining. Determine if the coal is from a stream of export when: body with tires).

surface mine or an underground mine for each

ton of coal produced and not on a mine-by-mine 1) The coal is loaded on an export vessel and Tires exempt from tax. The tax does not apbasis. title is transferred from the producer to a ply to the following items.

foreign purchaser, or

Determining tonnage or selling price. The • Tires of extruded tiring with an internal

producer pays the tax on coal at the time of sale 2) The producer sells the coal to an export wire fastening agent. broker in the United States under terms of or use. In figuring the selling price for applying • Recapped or retreaded tires if the tires a contract showing that the coal is to be the tax, the point of sale is f.o.b. (free on board) have been sold previously in the United shipped to a foreign country. mine or f.o.b. cleaning plant if you clean the coal States and were taxable tires at the time

before selling it. This applies even if you sell the Proof of export includes any of the following of sale.

coal for a delivered price. The f.o.b. mine or items. • Tire carcasses not suitable for commercial f.o.b. cleaning plant is the point at which you • A copy of the export bill of lading issued use. figure the number of tons sold for applying the by the delivering carrier. applicable tonnage rate, and the point at which • Tires for use on qualifying intercity, local, you figure the sale price for applying the 4.4% • A certificate signed by the export carrier’s and school buses. For tax-free treatment, rate. agent or representative showing actual ex- the registration requirements discussed The tax applies to the full amount of coal portation of the coal. earlier under Requirements for Exempt sold. However, the IRS allows a calculated re- Sales apply. • A certificate of landing signed by a cus- duction of the taxable weight of the coal for the toms officer of the foreign country to which weight of the moisture in excess of the coal’s Qualifying intercity or local bus. This is the coal is exported. inherent moisture content. Include in the sale any bus used mainly (more than 50%) to trans- price any additional charge for a freeze-condi- • If the foreign country does not have a cus- port the general public for a fee and that either tioning additive in figuring the tax. toms administrator, a statement of the for- operates on a schedule along regular routes or Do not include in the sales price the excise eign consignee showing receipt of the seats at least 20 adults (excluding the driver). tax imposed on coal. coal.

Qualifying school bus. This is any bus Coal used by the producer. The tax on coal substantially all the use (85% or more) of which applies if the coal is used by the producer in Tires is to transport students and employees of other than a mining process. A mining process schools.

means the same for this purpose as for percent- Tax is imposed on the sale by the manufacturer

age depletion. For example, the tax does not of tires of the type used on highway vehicles and Credit or refund. A credit or refund (without

apply if, before selling the coal, you break it, made all or in part of rubber. interest) is allowable if the tax on a tire has been

clean it, size it, or apply any other process con- The tax is based on the weight of each tire. paid on its sale by the manufacturer and the tire

sidered mining under the rules for depletion. In The tax does not apply to tires that weigh 40 is sold by any person on, or in connection with,

this case, the tax applies only when you sell the pounds or less. The tax rate is shown in the any other article that is:

coal. The tax does not apply to coal used as fuel Form 720 instructions. • An automobile bus chassis or body, in the coal drying process since it is considered

to be used in a mining process. However, the tax Determination of weight. Do not include • Exported,

does apply when you use the coal as fuel or as metal rims or rim bases in figuring the total

weight of a tire. But include in the total weight, • Sold to a state or local government for its an ingredient in making coke since the coal is exclusive use, not used in a mining process. the wire, staples, darts, clips, and other material

You must use a constructive sale price to or fastening devices that form a part of the tire or • Sold to a nonprofit educational organiza- are required for its use. figure the tax under the 4.4% rate if you use the tion for its exclusive use, or

coal in other than a mining process. Base your Consider studs as part of a tire, and include

• Used or sold for use as supplies for ves- constructive sale price on sales of a like kind and them in the total weight. The total weight of a

sels. grade of coal by you or other producers made tubeless tire or inner tube includes the weight

of the air valve and stem or any other mecha- f.o.b. mine or cleaning plant. Normally, you use The person who sold the article is eligible to nism that functions as a part of the tire or at- the same constructive price used to figure your make the claim.

percentage depletion deduction. taches to the inner tube and is used in

connection with inflating the tire or tube or mainBlending. If you blend surface-mined coal Gas Guzzler Tax taining its air pressure.

with underground-mined coal during the clean- When you sell tires with metal rims or rim Tax is imposed on the sale by the manufacturer ing process, you must figure the excise tax on bases attached, you must keep records estab- of automobiles of a model type that has a fuel the sale of the blended, cleaned coal. Figure the lishing what portion of the total weight of the economy standard as measured by the Environ- tax separately for each type of coal in the blend. finished product represents the tire without the mental Protection Agency (EPA) of less than Base the tax on the amount of each type in the metal rim or rim base. 22.5 miles per gallon. If you import an automo- blend if you can determine the proportion of Alternative method of determining weight. bile for personal use, you may be liable for this each type of coal contained in the final blend. If you have received permission from the IRS, tax. Figure the tax on Form 6197, as discussed Base the tax on the ratio of each type originally you may determine total weight of tires that you later. The tax rate is based on fuel economy put into the cleaning process if you cannot deter- manufactured and sold using the average rating. The tax rates for the gas guzzler tax are mine the proportion of each type of coal in the weight for each type, size, grade, and classifica- shown on Form 6197. blend. However, the tax is limited to 4.4% of the tion. A person that lengthens an existing automo- sale price per ton of the blended coal. See Revenue Procedure 92–82 in Cumula- bile (for example, to make a stretch limousine) is

Exemption from tax. The tax does not apply tive Bulletin 1992–2 for several alternative the manufacturer of an automobile.

to sales of lignite and imported coal. The only methods you can use to determine tire weight.

other exemption from the tax on the sale of coal Automobiles. An automobile is any

is for coal exported as discussed next. Manufacturer’s retail stores. The excise tax four-wheeled vehicle that is:

on tires is imposed at the time the tires are Exported. The tax does not apply to the • Rated at an unloaded gross vehicle weight delivered to the manufacturer-owned retail

sale of coal if the coal is in the stream of export of 6,000 pounds or less, stores, not at the time of sale. when sold by the producer and the coal is actu- • Propelled by an engine powered by gaso- ally exported. Tires on imported articles. The importer of line or diesel fuel, and Coal is in the stream of export when sold by an article equipped with taxable tires is treated

the producer if the sale is a step in the exporta- as the manufacturer of the tires and is liable for • Intended for use mainly on public streets,

tion of the coal to its ultimate destination in a the tire excise tax when the article is sold (ex- roads, and highways.

Page 22
Limousines. The tax generally applies to Exemptions. No one is exempt from the gas

limousines (including stretch limousines) re- guzzler tax, including the federal government, Retail Tax on gardless of their weight. state and local governments, and nonprofit eduVehicles not subject to tax. For the gas cational organizations. However, see Vehicles Heavy Trucks, not subject to tax, earlier. guzzler tax, the following vehicles are not considered automobiles. Form 6197. Use Form 6197 to figure your tax Trailers, and Tractors

liability for each quarter. Attach Form 6197 to 1) Vehicles operated exclusively on a rail or A tax of 12% of the sales price is imposed on the your Form 720 for the quarter. See the instruc- rails. first retail sale of the following articles, including tions for Form 6197 for more information about

related parts and accessories sold on or in con- filing and the special rules for filing if you import 2) Vehicles sold for use and used primarily: nection with, or with the sale of, the articles. an automobile for personal use.

a) As ambulances or combination Credit or refund. If the manufacturer paid the • Truck chassis and bodies. ambulance-hearses, tax on a vehicle that is used or resold for an • Truck trailer and semitrailer chassis and b) For police or other law enforcement emergency use (see item (2) under Vehicles not bodies. purposes by federal, state, or local gov- subject to tax), the manufacturer can claim a

ernments, or credit or refund. See Credits and Refunds, later. • Tractors of the kind chiefly used for highway transportation in combination with a c) For firefighting purposes. Vaccines trailer or semitrailer.

3) Vehicles treated under 49 USC 32901 A sale of a truck, truck trailer, or semitrailer is Tax is imposed on certain vaccines sold by the (1978) as non-passenger automobiles. considered a sale of a chassis and a body. manufacturer in the United States. A taxable This includes limousines manufactured pri- vaccine means any of the following vaccines. The seller is liable for the tax. marily to transport more than 10 persons.

• Any vaccine containing diphtheria toxoid. The manufacturer can sell a vehicle de- Chassis or body. A chassis or body is taxable

scribed in item (2) tax free only when the sale is • Any vaccine containing tetanus toxoid. only if you sell it for use as a component part of a

made directly to a purchaser for the described highway vehicle that is a truck, truck trailer or • Any vaccine containing pertussis bacteria, emergency use and the manufacturer and pur- semitrailer, or a tractor of the kind chiefly used extracted or partial cell bacteria, or spe- chaser (other than a state or local government) for highway transportation in combination with a cific pertussis antigens. are registered. trailer or semitrailer.

Treat an Indian tribal government as a state • Any vaccine containing polio virus. Highway vehicle. A highway vehicle is any only if the police or other law enforcement pur- • Any vaccine against measles. self-propelled vehicle designed to carry a load poses are an essential tribal government func- over public highways, whether or not it is also tion. • Any vaccine against mumps. designed to perform other functions.

Model type. Model type is a particular class of • Any vaccine against rubella. Vehicles not considered highway vehicles. automobile as determined by EPA regulations. • Any vaccine against hepatitis B. The following vehicles are not highway vehicles

for purposes of the retail tax. Fuel economy. Fuel economy is the average • Any vaccine against chicken pox.

number of miles an automobile travels on a • Any vaccine against rotavirus gastroenter- 1) Certain specially-designed mobile machin- gallon of gasoline (or diesel fuel) rounded to the itis. ery for nontransportation functions. nearest 0.1 mile as figured by the EPA.

• Any conjugate vaccine against streptococ- 2) Certain trailers and semitrailers specially Imported automobiles. The tax applies to cus pneumoniae. designed to perform nontransportation automobiles that do not have a prototype-based functions off the highway. fuel economy rating assigned by the EPA. An • Any HIB vaccine.

automobile imported into the United States with- 3) Certain specially-designed vehicles for the

out a certificate of conformity to United States The tax is 75 cents per dose of each taxable primary function of transporting a specific

emission standards and which has no assigned vaccine. The tax per dose on a vaccine that type of load other than over the public

fuel economy rating must be either: contains more than one taxable vaccine is 75 highway for certain operations (construccents times the number of taxable vaccines. tion, manufacturing, mining, processing, • Converted by installation of emission con- farming, drilling, timbering, or similar oper- trols to conform in all material respects to Credit or refund. A credit or refund (without ations). Their use in carrying this load over an automobile already certified for sale in interest) is available if the vaccine is: public highways is substantially limited or the United States, or • Returned to the person who paid the tax impaired because of their design.

• Modified by installation of emission control (other than for resale), or

components and individually tested to • Destroyed. Gross vehicle weight. The tax does not apply demonstrate emission compliance.

The claim for a credit or refund must be filed to truck chassis and bodies suitable for use with

An imported automobile that has been con- within 6 months after the vaccine is returned or a vehicle that has a gross vehicle weight of

destroyed. 33,000 pounds or less. It also does not apply to verted to conform to an automobile already certi- truck trailer and semitrailer chassis and bodies fied for sale in the United States may use the Conditions to allowance. To claim a credit suitable for use with a trailer or semitrailer that fuel economy rating assigned to that certified or refund, the person who paid the tax must automobile. has a gross vehicle weight of 26,000 pounds or have repaid or agreed to repay the tax to the A fuel economy rating is not generally avail- less. Tractors (and truck chassis completed as ultimate purchaser of the vaccine or obtained able for modified imported automobiles because tractors) are subject to tax without regard to the consent of such purchaser to allowance of gross vehicle weight. the EPA does not require a highway fuel econ- the credit or refund. omy test on them. A separate highway fuel The gross vehicle weight means the maxieconomy test would be required to devise a fuel mum total weight of a loaded vehicle. Generally,

economy rating (otherwise the automobile is this maximum total weight is the gross vehicle

presumed to fall within the lowest fuel economy weight rating provided by the manufacturer or

rating). determined by the seller of the completed artiFor more information about fuel economy cle. The seller’s gross vehicle weight rating must

ratings for imported automobiles, see Revenue take into account the strength of the chassis

Ruling 86–20 and Revenue Procedure 86–9 in frame and the axle capacity and placement. See

Cumulative Bulletin 1986–1, and Revenue Pro- section 145.4051–1(e)(3) of the regulations for

cedure 87–10 in Cumulative Bulletin 1987–1. more information.

Page 23
Parts or accessories. The tax applies to parts and accessories (and installation charges) dur- the tax paid on the prior taxable sale. The credit

or accessories sold on or in connection with, or ing that period. cannot exceed the tax on the resale. See section

with the sale of, a taxable article. For example, if 145.4052–1(a)(4) of the regulations for informaat the time of the sale by the retailer, the part or Example. You bought a taxable vehicle and tion on the conditions to allowance for the credit.

accessory has been ordered from the retailer, placed it in service on April 8. On May 3, you Use treated as sale. If any person uses a the part or accessory will be considered as sold bought and installed parts and accessories at a taxable article before the first retail sale of the in connection with the sale of the vehicle. The cost of $850. On July 15, you bought and in- article, that person is liable for the tax as if the stalled parts and accessories for $300. Tax of tax applies in this case whether or not the re- article had been sold at retail by that person. $138 (12% of $1,150) applies on July 15. Also, tailer bills the parts or accessories separately. Figure the tax on the price at which similar arti- tax will apply to any costs of additional parts and If the retailer sells a taxable chassis, body, or cles are sold in the ordinary course of trade by accessories installed on the vehicle before Oc- tractor without parts or accessories considered retailers. The tax attaches when the use begins. tober 8. essential for the operation or appearance of the If the seller of an article regularly sells the

taxable article, the sale of the parts or accesso- articles at retail in arm’s-length transactions, fig- First retail sale defined. The sale of an article ries by the retailer to the purchaser is considered ure the tax on its use on the lowest established is treated as the first retail sale, and the seller made in connection with the sale of the taxable retail price for the articles in effect at the time of will be liable for the tax imposed on the sale article even though they are shipped separately, the taxable use. unless one of the following exceptions applies. at the same time, or on a different date. The tax If the seller of an article does not regularly

applies unless there is evidence to the contrary. • There has been a prior taxable sale, sell the articles at retail in arm’s-length transacFor example, if a retailer sells to any person a lease, or use of the article (however, see tions, a constructive price on which the tax is

chassis and the bumpers for the chassis, or sells Tax on resale of tax-paid trailers and figured will be determined by the IRS after cona taxable tractor and the fifth wheel and attach- semitrailers, later). sidering the selling practices and price strucments, the tax applies to the parts or accesso- tures of sellers of similar articles. • The sale qualifies as a tax-free sale under ries regardless of the method of billing or the If a seller of an article incurs liability for tax on section 4221 of the Internal Revenue time at which the shipments were made. The tax the use of the article and later sells or leases the Code (see Sales exempt from tax, later). does not apply to parts and accessories that are article in a transaction that otherwise would be

spares or replacements. • The seller in good faith accepts from the taxable, liability for tax is not incurred on the later

purchaser a statement signed under pen- sale or lease. Separate purchase. The tax generally ap- alties of perjury and executed in good faith plies to the price of a part or accessory and its that the purchaser intends to resell the ar- Presumptive retail sales price. There are installation if the following conditions are met. ticle or lease it on a long-term basis. rules to ensure that the tax base of transactions

• The owner, lessee, or operator of any ve- considered to be taxable sales includes either

hicle that contains a taxable article installs Leases. A long-term lease (a lease with a an actual or presumed markup percentage. If

any part or accessory on the vehicle. term of 1 year or more, taking into account the person liable for tax is the vehicle’s manufacoptions to renew) before a first retail sale is turer, producer, or importer, the following dis- • The installation occurs within 6 months af- treated as a taxable sale. The tax is imposed on cussions show how you figure the presumptive ter the vehicle is first placed in service. the lessor at the time of the lease. retail sales price depending on the type of transA short-term lease (a lease with a term of action and the persons involved in the transac- The owners of the trade or business installing less than 1 year, taking into account options to tion. Table 1 outlines the appropriate tax base the parts or accessories are secondarily liable calculation for various transactions. renew) before a first retail sale is treated as a for the tax. taxable use. The tax is imposed on the lessor at The presumed markup percentage to be

A vehicle is placed in service on the date the used for trucks and truck-tractors is 4%. But for the time of the lease.

owner takes actual possession of the vehicle. truck trailers and semitrailers and remanufacThis date is established by a signed delivery Exported vehicle. A vehicle exported tured trucks and tractors, the presumed markup before its first retail sale, used in a foreign coun- ticket or other comparable document indicating percentage is zero.

delivery to and acceptance by the owner. try, and then returned to the United States, is Sale. For a taxable sale by a manufacturer, subject to the retail tax on its first retail sale after The tax does not apply if the installed part or producer, importer, or related person, you gen- importation. accessory is a replacement part or accessory. erally figure the tax on a tax base of the sales The tax also does not apply if the total price of Tax on resale of tax-paid trailers and price plus an amount equal to the presumed the parts and accessories, including installation semitrailers. The tax applies to a trailer or markup percentage times that sales price. charges, during the 6-month period is $1,000 or semitrailer resold within 6 months after having

less. However, if the total price is more than been sold in a taxable sale. The seller liable for Long-term lease. In the case of a long-term

$1,000, lease by a manufacturer, producer, importer, or the tax applies to the cost of all parts the tax on the resale can claim a credit equal to

related person, figure the tax on a tax base of

Table 1. Tax Base the constructive sales price plus an amount

equal to the presumed markup percentage

Transaction Figuring the Base times the constructive sales price.

Short-term lease. When a manufacturer, Sale by the manufacturer, producer, Sales price plus (presumed markup producer, importer, or related person leases an importer, or related person percentage × sales price) article in a short-term lease considered a taxaSale by the dealer Total consideration paid for the item including ble use, figure the tax on a constructive sales

any charges incident to placing it in a price at which those or similar articles generally condition ready for use are sold in the ordinary course of trade by retailers. Long-term lease by the manufacturer, Constructive sales price plus (presumed But if the lessor in this situation regularly producer, importer, or related person markup percentage × constructive sales price) sells articles at retail in arm’s-length transacShort-term lease by the manufacturer, Constructive sales price at which such or tions, figure the tax on the lowest established

producer, importer, or related person similar articles are sold retail price in effect at the time of the taxable

use. Short-term lease by a lessor other than the Price for which the article was sold to the If a person other than the manufacturer, pro- manufacturer, producer, importer, or related lessor plus the cost of parts and accessories ducer, importer, or related person leases an person installed by the lessor plus a presumed

markup percentage article in a short-term lease considered a taxable use, figure the tax on a tax base of the price

Short-term lease where the articles are Lowest established retail price in effect at the for which the article was sold to the lessor plus

regularly sold at arm’s length time of the taxable use the cost of parts and accessories installed by the

lessor and a presumed markup percentage.

Page 24
Related person. A related person is any sure water pump, hose components, and the Combining an article with an item in this list does

member of the same controlled group as the vacuum pipe. not give rise to taxability. However, see Parts or

manufacturer, producer, or importer. Do not accessories, discussed earlier. Sales not at arm’s length. For any taxable treat as a related person a person that sells the article sold (not at arm’s length) at less than the articles through a permanent retail establish- Articles exempt from tax. The tax on heavy fair market price, figure the excise tax on the ment in the normal course of being a retailer if trucks, trailers, and tractors does not apply to price for which similar articles are sold at retail in that person has records to prove the article was sales of the articles described in the following the ordinary course of trade. sold for a price that included a markup equal to discussions.

or greater than the presumed markup percent- A sale is not at arm’s length if either of the Rail trailers and rail vans. This is any age. following apply. chassis or body of a trailer or semitrailer deGeneral rule for sales by dealers to the con- signed for use both as a highway vehicle and a • One of the parties is controlled (in law or sumer. For a taxable sale, other than a railroad car (including any parts and accessories in fact) by the other or there is common long-term lease, by a person other than a manu- designed primarily for use on and in connection control, whether or not the control is actu- facturer, producer, importer, or related person, with it). Do not treat a piggyback trailer or semi- ally exercised to influence the sales price. your tax base is the retail sales price as dis- trailer as designed for use as a railroad car.

cussed next under Determination of tax base. • The sale is made under special arrange- Parts and accessories. This is any part or When you sell an article to the consumer, ments between a seller and a purchaser. accessory sold separately from the truck or generally you do not add a presumed markup to trailer, except as described earlier under Parts the tax base. However, you do add a markup if Installment sales. If the first retail sale is an or accessories and Separate purchase. all the following apply. installment sale, or other form of sale in which

Trash containers. This is any box, • You do not perform any significant activi- the sales price is paid in installments, the tax

arises at the time of the sale. The tax is figured container, receptacle, bin, or similar article that ties relating to the processing of the sale

on the entire sales price. No part of the tax is meets all the following conditions. of a taxable article.

deferred because the sales price is paid in in- • The main reason for processing the sale • It is designed to be used as a trash stallments. container. through you is to avoid or evade the presumed markup. Restoration of worn vehicles. The tax • It is not designed to carry freight other does not apply to the sale or use of a worn • You do not have records proving that the than trash.

vehicle restored to a usable condition if the cost article was sold for a price that included a • It is not designed to be permanently of the restoration is not more than 75% of the markup equal to or greater than the pre- mounted on or affixed to a truck chassis or cost of a comparable new vehicle. If the restora- sumed markup percentage. body. tion includes the use of a glider kit, the tax does

In these situations, your tax base is the sales not apply to the sale or use of the restored price plus an amount equal to the presumed House trailers. This is any house trailer (re- vehicle as long as the total cost of the repair is markup percentage times that selling price. gardless of size) suitable for use in connection not more than the 75% limit. with either passenger automobiles or trucks.

Determination of tax base. These rules ap- Repairs and modifications. The tax does Camper coaches or bodies for self-pro- ply to both normal retail sales price and pre- not apply to the sale or use of an article that has pelled mobile homes. This is any article de- sumptive retail sales price computations. To been repaired or modified unless the cost of the signed to be mounted or placed on trucks, truck arrive at the tax base, the price is the total repairs and modifications is more than 75% of chassis, or automobile chassis and to be used consideration paid (including trade-in allow- the retail price of a comparable new article. This primarily as living quarters or camping accom- ance) for the item and includes any charge inci- includes modifications that change the transpor- modations on and off the trucks. Further, the tax dent to placing the article in a condition ready for tation function of an article or restore a wrecked does not apply to chassis specifically designed use. However, see Presumptive retail sales article to a functional condition. However, this and constructed to accommodate and transport price, earlier. exception generally does not apply to an article self-propelled mobile home bodies.

Exclusions from tax base. Exclude from that was not subject to the tax when it was new. Farm feed, seed, and fertilizer equipment. the tax base the retail excise tax imposed on the Further manufacture. The tax does not ap- This is any body primarily designed to process sale. Exclude any state or local retail sales tax if ply to the use by a person of a taxable article as or prepare, haul, spread, load, or unload feed, stated as a separate charge from the price material in the manufacture or production of, or seed, or fertilizer to or on farms. This exemption whether the sales tax is imposed on the seller or as a component part of, another article to be applies only to the farm equipment body (and purchaser. Also exclude the value of any used manufactured or produced by that person. Do parts and accessories) and not to the chassis component of the article furnished by the first not treat a person as engaged in the manufac- upon which the farm equipment is mounted. user of the article.

Exclude charges for transportation, delivery, ture of any article merely because that person Ambulances and hearses. This is any am- combines the article with any of the following bulance, hearse, or combination insurance, and installation (other than installa- items. ambulance-hearse. tion charges for parts and accessories, discussed earlier) and other expenses incurred in • Coupling device (including any fifth Truck-tractors. This is any truck-tractor connection with the delivery of an article to a wheel). specifically designed for use in shifting semitrail- purchaser. These expenses are those incurred ers in and around freight yards and freight termi- in delivery from the retail dealer to the customer. • Wrecker crane. nals.

In the case of delivery directly from the manufac- • Loading and unloading equipment (includ- Concrete mixers. This is any article de- turer to the dealer’s customer, include the trans- ing any crane, hoist, winch, or power lift- signed to be placed or mounted on a truck, truck portation and delivery charges to the extent the gate). trailer, or semitrailer chassis to be used to pro- charges do not exceed what it would have cost cess or prepare concrete. to ship the article to the dealer. • Aerial ladder or tower.

Exclude amounts charged for machinery or • Ice and snow control equipment. equipment that does not contribute to the high- Sales exempt from tax. The following sales

way transportation function of the vehicle, pro- • Earth moving, excavation, and construc- are ordinarily exempt from tax.

vided those charges are supported by adequate tion equipment. • Sales to a state or local government for its records. For example, for an industrial vacuum • Spreader. exclusive use. loader vehicle, exclude amounts charged for the

vacuum pump and hose, filter system, material • Sleeper cab. • Sales to Indian tribal governments, but

separator, silencer or muffler, control cabinet, only if the transaction involves the exer- • Cab shield. and ladder. Similarly, for a sewer cleaning vehi- cise of an essential tribal government

cle, exclude amounts charged for the high pres- • Wood or metal floor. function.

Page 25
• Sales to a nonprofit educational organiza- the vessel has completed at least one outward on a premium payment of $10.10, the tax

tion for its exclusive use. and one homeward passage. The tax may be is 11 cents).

imposed even if a passenger does not make • Sales for use by the purchaser for further 3) Reinsurance policies covering any of the both an outward and a homeward passage as manufacture of other taxable articles (see taxable contracts described in items (1) long as the voyage begins or ends in the United below). and (2): 1 cent. States.

• Sales for export or for resale by the pur- However, the tax does not apply to casualty

chaser to a second purchaser for export. insurance premiums paid to foreign insurers for Passenger. A passenger is an individual carried on the vessel other than the Master or a coverage of export goods in transit to foreign • Sales to the United Nations for official use. crew member or other individual engaged in the destinations.

business of the vessel or its owners. Any person who makes, signs, issues, or Registration requirement. In general, the sells any of the documents and instruments sub- seller and buyer must be registered for a sale to Example 1. John Smith works as a guest ject to the tax, or for whose use or benefit they be tax free. See the Form 637 instructions for lecturer. The cruise line hired him for the benefit are made, signed, issued, or sold, is liable for more information. Certain registration excep- of the passengers. Therefore, he is engaged in the tax. tions apply in the case of sales to state and local the business of the vessel and is not a passen- governments and to foreign purchasers for ex- ger. Premium. Premium means the agreed price

port. or consideration for assuming and carrying the

Example 2. Marian Green is a travel agent. risk or obligation. It includes any additional Further manufacture. If you buy articles

She is taking the cruise as a promotional trip to charge or assessment payable under the con- tax free and resell or use them other than in the

manufacture of another article, you are liable for determine if she wants to offer it to her clients. tract, whether in one sum or installments. If

She is a passenger. premiums are refunded, claim the tax paid on the tax on their resale or use just as if you had

manufactured and sold them. those premiums as an overpayment against tax

Taxable situations. There are two taxable sit- due on other premiums paid or file a claim for

Credits and refunds. A credit or refund (with- uations. The first situation involves voyages on refund.

out interest) of the tax on heavy vehicles may be commercial passenger vessels extending over When liability attaches. The liability for this allowable if the tax has been paid with respect to one or more nights. A voyage extends over one tax attaches when the premium payment is an article and, before any other use, such article or more nights if it extends for more than 24 transferred to the foreign insurer or reinsurer is used by any person as a component part of hours. A passenger vessel is any vessel with (including transfers to any bank, trust fund, or another taxable article manufactured or pro- stateroom or berth accommodations for more similar recipient designated by the foreign in- duced. The person using the article as a compo- than 16 passengers. surer or reinsurer) or to any nonresident agent, nent part is eligible for the credit or refund. The second situation involves voyages on a solicitor, or broker. A person can pay the tax A credit or refund is allowable if, before any commercial vessel transporting passengers en- before the liability attaches if the person keeps other use, an article is, by any person: gaged in gambling on the vessel beyond the records consistent with that practice. territorial waters of the United States. Territorial • Exported, The person who makes the payment of the waters of the United States are those waters premium to the foreign insurer or to any nonresi- • Used or sold for use as supplies for ves- within the international boundary line between dent agent, solicitor, or broker must file the re- sels, the United States and any contiguous foreign turn and pay the tax. This is the resident person country or within 3 nautical miles (3.45 statute • Sold to a state or local government for its who actually transfers the money or its miles) from low tide on the coastline. If passen- exclusive use, or equivalent to the insurer or agent. If that person gers participate as players in any policy game or does not pay the tax, any person liable for the • Sold to a nonprofit educational organiza- other lottery, or any other game of chance for tax must file the return and pay the tax. tion for its exclusive use. money or other thing of value that the owner or

A credit or refund is also allowable if there is a operator of the vessel (or their employee, agent, The person liable for this tax must keep

or franchisee) conducts, sponsors, or operates, accurate records that identify each pol- price readjustment by reason of the return or the voyage is subject to the ship passenger tax. RECORDS icy or instrument subject to tax. These repossession of an article or by reason of a bona The tax applies regardless of the duration of the records must clearly establish the type of policy fide discount, rebate, or allowance. voyage. A casual, friendly game of chance with or instrument, the gross premium paid, the iden- See also Conditions to allowance under Man- other passengers that is not conducted, spon- tity of the insured and insurer, and the total ufacturers Taxes, earlier. sored, or operated by the owner or operator is premium charged. If the premium is to be paid in

not gambling for determining if the voyage is installments, the records must also establish the Tire credit. A credit is allowed against the tax subject to the ship passenger tax. amount and anniversary date of each install- on heavy vehicles if tires are sold on or in con- ment. nection with the sale of the article. The credit is Exemptions. The tax does not apply when a The records must be kept at the place of equal to the manufacturers excise tax imposed vessel is on a voyage of less than 12 hours business or other convenient location for at least on the tires (discussed earlier). This is the sec- between 2 points in the United States or if a 3 years after the later of the date any part of the tion 4051(d) tire credit and is claimed on line 11a vessel is owned or operated by a state or local tax became due, or the date any part of the tax of Schedule C (Form 720) for the same quarter government. was paid. During this period, the records must for which the tax on the heavy vehicle is re- be readily accessible to the IRS. ported. The person having control or possession of a

policy or instrument subject to this tax must keep Foreign Insurance the policy for at least 3 years after the date any

Ship Passenger Tax part of the tax on it was paid. Taxes

A tax of $3 per passenger is imposed on certain Tax is imposed on insurance policies issued by Treaty-based positions under IRC 6114. ship voyages, as explained later under Taxable foreign insurers. The following tax rates apply to You may have to file an annual report disclosing situations. The tax is imposed only once for each each dollar (or fraction thereof) of the premium the amount of premiums exempt from United passenger, either at the time of first embarkation paid. States excise tax as a result of the application of or disembarkation in the United States. a treaty with the United States that overrides (or The person providing the voyage (the opera- 1) Casualty insurance and indemnity, fidelity, otherwise modifies) any provision of the Internal tor of the vessel) is liable for the tax. and surety bonds: 4 cents (for example, on Revenue Code. a premium payment of $10.10, the tax is Voyage. A voyage is the vessel’s journey that Attach any disclosure statement to the first 44 cents). includes the outward and homeward trips or quarter Form 720. You may be able to use Form

passages. The voyage starts when the vessel 2) Life, sickness, and accident insurance, 8833, Treaty-Based Return Position Disclosure

begins to load passengers and continues until and annuity contracts: 1 cent (for example, Under Section 6114 or 7701(b), as a disclosure

Page 26
statement. See the Form 720 instructions for • Schedule A, Excise Tax Liability, is used designee to perform certain actions. See the

how and where to file. to record your net tax liability for each form instructions for more information.

See Revenue Procedure 92–14 in Cumula- semimonthly period in a quarter. Complete

it if you have an entry in Part I. One-time filing. If you import a vehicle, you tive Bulletin 1992–1 for procedures you can use

to claim a refund of this tax under certain U.S. may be eligible to make a one-time filing of Form • Schedule C, Claims, is used to make 720 for the gas guzzler tax if you meet the treaties. claims only if you are reporting a liability in following conditions. Part I or Part II.

• You do not import gas guzzling cars in the

Attachments to Form 720. You may have course of your trade or business. Obligations Not to attach the following forms. • You are not required to file Form 720 to

• Form 6197 for the gas guzzler tax. report any other excise taxes. in Registered Form • Form 6627 for environmental taxes. File Form 720 for the quarter in which you Tax is imposed on any person who issues a incur the tax liability. Attach Form 6197 to report registration-required obligation not in registered Form 720X. This form is used to make adjust- the gas guzzler tax. Pay the full tax with the form. The tax is: ments to liability reported on Forms 720 filed in return. No deposits are required. Check the

• 1% of the principal of the obligation, multi- previous quarters. You can file Form 720X by one-time filing box on page 1, Form 720.

plied by itself or, if it shows a decrease in tax, you can

attach it to Form 720. See the form and its Final return. File a final return if either of the • The number of calendar years (or portions following apply to you. instructions for more information.

of calendar years) during the period startConditions to allowance. For tax de- • You go out of business. ing on the date the obligation was issued

and ending on the date it matures. creases, the claimant must check the appropri- • You will not owe excise taxes that are re- ate box on Form 720X stating that: portable on Form 720 in future quarters. A registration-required obligation is any 1) For adjustments of communications or air obligation other than one that meets any of the transportation taxes, the claimant has: Due dates. Form 720 must be filed by the following conditions. following due dates. a) Repaid the tax to the person from 1) It is issued by a natural person. whom it was collected, or Quarter Covered Due Dates

2) It is not of a type offered to the public. b) Obtained the consent of that person to January, February, March ..... April 30

3) It has a maturity (at issue) of not more allowance of the adjustment. April, May, June ............ July 31

than one year. July, August, September ...... October 31

2) For other adjustments, the claimant has: October, November, December January 31 4) It can only be issued to a foreign person.

a) Not included the tax in the price of the If any due date falls on a Saturday, Sunday, For item (4), if the obligation is not in regis- article and not collected the tax from or legal holiday, you can file the return on the tered form, the interest on the obligation must be next business day. the purchaser, payable only outside the United States and its You must report the floor stocks tax imposed possessions. Also, the obligation must state on b) Repaid the tax to the ultimate pur- on ODCs held on January 1, as discussed ear- its face that any U.S. person who holds it shall chaser, or lier, on the return due by July 31 of the year that be subject to limits under the U.S. income tax c) Attached the written consent of the ulti- the tax is imposed. laws. mate purchaser to the allowance of the

adjustment.

However, the conditions listed under (2) do not Paying the Taxes Filing Form 720 apply to environmental taxes, the ship passenger tax, obligations not in registered form, for- Excise taxes are due and payable without as- Use Form 720 to report and pay the excise taxes eign insurance taxes, fuels used on inland sessment or notice. If you need to make a pay- discussed earlier. File Form 720 for each calen- waterways, alcohol sold as fuel but not used as ment when you file your quarterly return, make dar quarter until you file a final Form 720. If you fuel, and certain fuel taxes if the tax was based your payment by check or money order payable are not reporting a tax that you normally report, on use (for example, dyed diesel fuel used in to the United States Treasury. Write on your enter zero on the line for that tax. trains or buses, LPG, and CNG). check or money order your employer identificaBe sure to sign the return. An unsigned re- tion number, Form 720, and the period covered

turn is not considered filed. Employer identification number. If you file by the payment.

You may be required to file your returns on a Form 720, you need an employer identification

monthly or semimonthly basis instead of quar- number (EIN), unless you are a one-time filer Floor stocks tax on ODCs. You must deposit

terly if you do not make deposits as required (discussed later). If you do not have an EIN, use the floor stocks tax imposed on ODCs held on

Form SS–4, Application for Employer Identifi- January 1, as discussed earlier, by June 30 of (see Deposit Requirements, later) or are liable

cation Number, to apply for an EIN. You can get the year that the tax is imposed. for the excise tax on gasoline, diesel fuel, or

kerosene and meet certain conditions. a Form SS–4 from the IRS or from the Social

Security Administration. If you do not receive an Deposit Requirements

Form 720. The form has various sections. EIN by the time a return is due, file your return

anyway and write “Applied for” and the date you If you have to file a quarterly excise tax return on

• Part I consists of excise taxes generally applied in the space for the EIN. Form 720, you may have to make deposits of

required to be deposited (See Deposit Re- You can apply for an EIN by telephone, fax, your excise taxes before the return is due. If you

quirements, later). or mail. See the Form SS–4 instructions for how are not required to make deposits, you pay the

to apply. tax when you file Form 720. See Exceptions, • Part II consists of excise taxes that are

later. not required to be deposited. Third party designee. You can check the

• Part III consists of the lines for your total “Yes” box in the third party designee area to Federal tax deposit coupons. If you do not

tax, showing any claims and overpay- authorize the IRS to discuss your Form 720 with make your deposits electronically (discussed

ments from previous quarters, indicating an employee of your business or another per- next), they must be accompanied by a Form

the amount of your deposits, and deter- son. This allows the IRS to call the designee to 8109, Federal Tax Deposit Coupon. If you do not

mining the balance due or any overpay- answer any questions that arise during the have a coupon book, contact your local IRS

ment. processing of your return. It also allows your office or call 1–800–829–4933.

Page 27
Electronic deposit requirement. You must these rules, an additional deposit is required in Report alternative method taxes deuse the Electronic Federal Tax Payment System September and different dates may apply if you posited under the September rule on

(EFTPS) to make electronic deposits of all de- are required to make electronic deposits (see Form 720 for the 4th quarter.

TIP

pository tax liabilities (including employment Electronic deposit requirement, earlier). The

taxes, corporate income tax, and excise taxes) taxes for that part of the period not covered by

you incur after 2002, if you meet either of the the special rules should be deposited by the Make the deposit for the remaining following conditions. normal due date. days of the first semimonthly period in

See Publication 509 for an excise tax calen- September by the regular due date. CAUTION

! • You had to make electronic deposits in dar that shows the due dates for the current 2002.

year. • You deposited more than $200,000 in federal depository taxes in 2001. Regular method taxes. Deposits of taxes Amount of Deposits If you do not meet these conditions, electronic (other than alternative method taxes) for a semideposits are voluntary. monthly period are due by the 14th day following Deposits for a semimonthly period generally

the semimonthly period. Therefore, the deposit must be at least 95 percent of the net tax liability For information about EFTPS, access it on the for the first semimonthly period is due by the for that period unless the safe harbor rule (dis- Internet at www.eftps.gov, or see Publication 29th of that month. The deposit for the second cussed later) applies. Generally, you do not 966, Now a Full Range of Electronic Choices to semimonthly period is due by the 14th of the have to make a deposit for a period in which you Pay ALL Your Federal Taxes. following month. incurred no tax liability. You can enroll in EFTPS on-line or you can If the 14th day is a Saturday, Sunday, or call: Net tax liability. Your net tax liability is your legal holiday in the District of Columbia, you

• 1–800–945–8400, or must make the deposit by the tax liability for the period minus any claims on immediately pre- Schedule C (Form 720) for the period. You may ceding day that is not a Saturday, Sunday, or • 1–800–555–4477. figure your net tax liability for a semimonthly legal holiday. period by dividing your net liability incurred durSeptember rule. For 2003, deposit by Sep- Exceptions ing the calendar month by two. If you use this

tember 29 the taxes for the period beginning method, you must use it for all semimonthly

You do not have to make deposits of taxes in the September 16 and ending September 25. If periods in the calendar quarter.

following situations. You pay these taxes when making electronic deposits, deposit by Septem- Do not reduce your liability by any you file your Form 720 for the quarter. ber 29 the taxes for the period beginning Sep- amounts from Form 720X. tember 16 and ending September 26. CAUTION

!

1) The liability is for taxes on the following Make the deposit for the remaining items. days of the second semimonthly period

a) Sport fishing equipment. in September by the regular due date. CAUTION

!

September rule. To figure your net tax liability under the September rule, see sections b) Electric outboard motors and sonar de- 40.6302(c)–2 and, for alternative method taxes, vices.

40.6302(c)–3 of the regulations. Alternative method taxes. You can deposit c) Bows. communications and air transportation taxes d) Arrow components. based on amounts considered as collected (the Safe Harbor Rule alternative method) rather than on amounts ac- e) Fuels used on inland waterways. tually collected. You can use the safe harbor rule to figure if you f) Alcohol sold as fuel but not used as If you use the alternative method, the tax have deposited a sufficient amount of tax. The fuel. included in amounts billed or tickets sold during rule applies separately to regular method taxes

a semimonthly period is considered as collected and alternative method taxes. 2) The liability is for the gas guzzler tax that during the first 7 days of the second following The safe harbor rule applies to persons who is reportable on a one-time filing. (See the semimonthly period. You must deposit these filed a Form 720 for the look-back quarter (the earlier discussion, One-time filing, under taxes by the third banking day after that seventh second calendar quarter preceding the current Filing Form 720.) day. quarter). If you filed for the look-back quarter,

3) The net liability for taxes listed in Part I of To use the alternative method, you must you will meet the semimonthly deposit requireForm 720 does not exceed $2,500 for the ment for the current quarter if all the following keep a separate account of the tax included in

quarter. conditions are met. the amounts billed or tickets sold during the

4) The tax liability is for the removal of a month. Report on Form 720 the tax included in • The deposit of that tax for each semibatch of gasohol from an approved refin- amounts billed or tickets sold and not the monthly period in the current quarter is not amount of tax that is actually collected. ery by bulk transfer, if the refiner elects to less than 1/6 (16.67%) of the net tax liabiltreat itself for that removal as not regis- ity reported for that tax for the look-back Example. Under the alternative method, the tered. quarter. tax included in amounts billed or tickets sold • Each deposit is timely made. between March 1 and March 15, 2003, is considWhen To Make Deposits ered as collected during the first 7 days of April • Any underpayment for the current quarter

2003. The deposit of these taxes is due by April is paid by the due date of the return.

10, 2003, 3 banking days after April 7. These These rules apply to taxes reported on Form 720 • For regular method taxes, liability does not amounts are reported on the Form 720 for the for which deposits are required. include any tax that was not imposed, or a second quarter of 2003. Generally, you make deposits for a semi- tax on a chemical not subject to tax, at all

monthly period. A semimonthly period is the first September rule. For 2003, deposit by Sep- times during the look-back quarter.

15 days of a month or the 16th day through the tember 29 the communications and air transpor- • For alternative method taxes, liability does end of a month. tation taxes included in the amounts billed or

not include any tax that was not imposed All taxes are deposited under the rules for tickets sold during the period beginning Septem- at all times during the look-back quarter regular method taxes. However, communica- ber 1 and ending September 10. If making elec- and the month preceding the look-back tion and air transportation taxes can be depos- tronic deposits, deposit by September 29 the air quarter. ited under the rules for alternative method transportation and communications taxes intaxes. cluded in the amounts billed or tickets sold dur- • For the semimonthly period for which the

All excise taxes that must be deposited are additional deposit is required (September ing the period beginning September 1 and

subject to the special September rules. Under rule), the additional deposit must be at ending September 11.

Page 28
least 11/90 (12.23%), 10/90 (11.12%) for Principal. A principal is a person who is in the 1) Games of a type in which usually the wa- non-EFTPS, of the net tax liability reported business of accepting wagers for his or her own gers are placed, winners are determined, for the look-back quarter. account. This is the person who makes a profit and the prizes are distributed in the pres- or risks loss depending on the outcome of the ence of everyone who placed a wager. event or contest for which the wager is ac- Tax rate increases. You must modify the safe cepted. 2) Drawings conducted by a tax-exempt or- harbor rule if there has been an increase in the

ganization, if the net proceeds of the draw- rate of tax. You must figure your tax liability in Agent. This is the agent of the principal who ing do not benefit a private shareholder or the look-back quarter as if the increased rate accepts wagers for the principal. individual. had been in effect. To qualify for the safe harbor

rule, your deposits cannot be less than 1/6 of the Wagers. Wagers include any wager: Card games, roulette games, dice games,

refigured tax liability. bingo, keno, and gambling wheels usually fall • Made on sports events or contests with a within exception (1) above. person in the business of accepting wagers, Form 11–C Credits and Refunds • Placed in a wagering pool on a sports

event or contest, if the pool is conducted You use Form 11–C to register with the IRS

A credit can be claimed on Schedule C of Form for profit, or certain information on wagering activity and to

720 or a refund can be claimed on Form 8849 for pay the occupational tax on wagering. Your can- • Placed in a lottery conducted for profit. the credits and refunds described previously. celed check is proof of registration and payment.

To file a claim for a credit on Schedule C, you

must have a tax liability to report on Form 720 for Sports event. A sports event includes every Who must file. You must file Form 11–C if

type of amateur, scholastic, or professional you are a principal or an agent, defined earlier. the quarter. If you have no tax liability for the sports competition, such as: quarter, you must use Form 8849 to file a claim When to file. You must file your first Form for a refund. Auto racing Baseball Basketball 11–C before you begin accepting wagers. After Generally, claims must be filed within 3 years Billiards Bowling Boxing that, file a renewal return by July 1 for each year of the filing of the return reporting the tax to Cards Checkers Cricket that you accept wagers. You may also be re- which the claim relates, or 2 years from when Croquet Dog racing Football quired to file a first return for a new entity created the tax reported on the return was paid, which- Golf Gymnastics Hockey when certain changes in ownership or control ever is later. A return filed before the due date is Horse racing Lacrosse Rugby occur. In addition, you are required to file a considered to have been filed on the due date. Soccer Squash Tennis supplemental registration when certain events

See Publication 378 for claims by ultimate Track Tug of war Wrestling occur. See the Form 11–C instructions.

purchasers of fuels and registered ultimate vendors, including information on when to file. Contest. A contest is any competition involv- Information required. Follow the instructions

For specific information on claiming a credit ing speed, skill, endurance, popularity, politics, on the back of the form. All filers must have an

or refund for a particular excise tax, see the strength, or appearance, such as the following. employer identification number (EIN). You candiscussion about that tax. not use your social security number. If you do • Elections. not have an EIN, use Form SS–4, Application

• The outcome of nominating conventions. for Employer Identification Number, to apply for

an EIN. You can get a Form SS–4 from the IRS • Dance marathons. Tax on Wagering or from the Social Security Administration. If you

• Log-rolling contests. do not receive an EIN by the time a return is due,

file your return anyway and write “Applied for” The following two taxes are imposed on wager- • Wood-chopping contests. and the date you applied in the space for the ing activities. • Weightlifting contests. EIN.

• Occupational tax. You must pay the occu- You can apply for an EIN by telephone, fax, • Beauty contests. pational tax if you accept taxable wagers or mail. See the Form SS–4 instructions for how

for yourself or another person. See Form • Spelling bees. to apply.

11–C, later, for more information. If you are a principal, you must show the

Wagering pool. A wagering pool conducted number of agents that accept wagers for you • Wagering tax. You must pay the tax on and their names, addresses, and EINs. If you wagering if you are in the business of ac- for profit includes any method or scheme for engage a new agent after filing Form 11–C, you cepting wagers or running a wagering pool giving prizes to one or more winning bettors must file a supplemental registration showing or lottery. You must also pay the tax on based on the outcome of a sports event, a con- this information within 10 days after you engage wagering if you have not properly regis- test, or a combination or series of these events the agent. tered the name and address of your princi- or contests if the wagering pool is managed and

conducted for the purpose of making a profit. A Agents must show the name, address, and pal on Form 11–C. See Form 730, later,

wagering pool or lottery may be conducted for EIN of each of their principals. If you are en- for more information.

profit even if a direct profit does not occur. If you gaged by a new principal after having filed a

operate the wagering pool or lottery with the Form 11–C, you must file a supplemental regis- Exempt organizations. Organizations ex- expectation of a profit in the form of increased tration within 10 days after being engaged by the empt from income tax under section 501 or 521 sales, attendance, or other indirect benefits, you new principal. If you do not provide the required of the Internal Revenue Code are not exempt conduct it for profit. information about the principal, you will be liable

from the tax on wagering or the occupational tax. for the excise tax on wagers you accept as if you

However, see Lottery, later, for an exception. Lottery. This includes the numbers game, pol- were the principal.

icy, punch boards, and similar types of wagerConfidentiality. No Treasury Department em- ing. In general, a lottery conducted for profit Example. Ken operates a numbers game

ployee may disclose any information that you and engages 10 people to receive wagers from includes any method or scheme for the distribusupply in relation to the wagering taxes, unless tion of prizes among persons who have paid or the public on his behalf. Ken also employs a

necessary to administer or enforce the Internal promised to pay for a chance to win the prizes. secretary and a bookkeeper. Ken and each of

Revenue laws. The winning prizes are usually determined by the 10 agents are liable for the tax. They must

the drawing of numbers, symbols, or tickets from each file Form 11–C. The secretary and the

Definitions a wheel or other container or by the outcome of bookkeeper are not liable for the tax unless they

a given event. also accept wagers for Ken.

The following definitions apply to Form 11–C It does not include either of the following On Ken’s Form 11–C, he lists all required

and Form 730. kinds of events. information (name, address, and EIN) for each

Page 29
of his ten agents as well as himself. He does not cepted. If the wager is authorized, the rate is • Paying taxes late.

list his secretary or bookkeeper. 0.25% of the wager. • Failing to make deposits. Each of the 10 agents file Form 11–C show- When to file. Once you have filed Form 730 ing his or her name, address, and EIN, as well • Depositing taxes late. reporting tax, file a return for each subsequent as Ken’s. month whether or not you have taxable wagers • Making false statements relating to tax.

to report. File Form 730 for each month by the Figuring the tax. The following tax must be • Failing to register. last day of the following month. If you have none paid annually for every year in which taxable to report, write “0” in the last box of the dollar • Misrepresenting that tax is excluded from wagers are accepted. amount column. If you stop accepting wagers the price of an article. • $50 if all wagers accepted are authorized permanently, check the final return box on the

under the laws of the state in which ac- form. Trust fund recovery penalty. If you provide cepted. Credit or refund. A credit or refund may be taxable communications or air transportation

• $500 for all other wagers. claimed for an overpayment of the wagering tax services, you have to collect excise taxes (as

or for the amount of tax imposed on a wager that discussed earlier) from those persons who pay The tax year begins on July 1. If you start ac- is laid off with another person who is liable for you for those services. You must pay over these cepting wagers after July 31, the tax is prorated the tax on the amount laid off. Claim a credit on taxes to the U.S. Government. for the first year. The prorated amounts are

shown in the table in the Form 11–C instruc- line 5 of Form 730 or file a claim for refund on If you willfully fail to collect or pay over these

tions. Form 8849 using Schedule 6. No credit or refund taxes, or if you evade or defeat them in any way,

will be allowed unless the timely filed claim has the trust fund recovery penalty may apply. WillRefund. A refund for an overpayment of the the required statements, certificates, and con- fully means voluntarily, consciously, and intenoccupational tax may be claimed on Form 8849 sents attached. For more information, see the tionally. The trust fund recovery penalty equals

using Schedule 6. See the Form 8849 instruc- instructions for Form 730 and Form 8849. 100% of the taxes not collected or not paid over

tions for details. Conditions to allowance. One of the fol- to the U.S. Government.

lowing statements must be attached to the claim The trust fund recovery penalty may be imForm 730 for credit or refund. posed on any person responsible for collecting,

accounting for, and paying over these taxes. If • The tax has not been collected from the Form 730 is used for figuring the tax on wagers. this person knows that these required actions person who placed the wager. The wagering tax applies to the wagers (as are not taking place for whatever reason, the defined earlier), regardless of the outcome of • The tax has been repaid to that person. person is acting willfully. Paying other expenses the individual wagers. of the business instead of paying the taxes is • The written consent of that person to The tax applies only to a wager that meets make the claim has been obtained. willful behavior.

either of the following conditions. A responsible person can be an officer or

• It is accepted in the United States. employee of a corporation, a partner or em- If the claim is for a laid-off wager accepted by

the claimant, the statement must be attached for ployee of a partnership, or any other person who • It is placed by a person who is in the both the person who placed the laid-off wager had responsibility for certain aspects of the busi- United States with a U.S. citizen or resiand the person who placed the original wager. ness and financial affairs of the employer (or dent, or in a wagering pool or lottery con- business). This may include accountants, trust- ducted by a U.S. citizen or resident. Each person liable for the wagering tax ees in bankruptcy, members of a board, banks, must keep records to reflect each day’s

Wagers made within the United States are insurance companies, or sureties. The responsi- operations. Your records should in- RECORDS

taxable regardless of the citizenship or place of ble person could even be another corporation— clude the following information. in other words, anyone who has the duty and the residence of the parties to the wager. • The gross amount of all wagers accepted. ability to direct, account for, or pay over the

Laid-off wagers. Persons accepting more money. Having signature power on the business • The gross amount of each class or type of wagers than they are willing to carry may lay off checking account could be a significant factor in wager accepted on each event, contest, or a portion of the wagers with another person to determining responsibility. other wagering medium. avoid the risk of loss. If you accept a wager • The gross amount of any wagers laid off taken initially by someone else (other than an

agent acting for you) include the wager in your with other persons and the name, adgross receipts. If you accept a wager and lay off dress, and registration number of each Examination and

all or part of it with a person who is liable for the person with whom you placed the laid-off

wagers. tax, you may be entitled to a credit or refund, Appeal Procedures discussed later. For more information on records, see sections

44.4403–1 and 44.6001–1 of the regulations. If your excise tax return is examined and you Excluded wagers. Tax is not imposed on any disagree with the findings, you can get informa- of the following. tion about audit and appeal procedures from

• Parimutuel wagering, including horse rac- Publication 556, Examination of Returns, Aping, dog racing, and jai alai when licensed peal Rights, and Claims for Refund. An

under state law. Penalties unagreed case involving an excise tax covered

in this publication differs from other tax cases in • Coin-operated devices such as pinball ma- and Interest that you can only contest it in court after pay- chines. ment of the tax by filing suit for a refund in the Penalties and interest may result from any of the • Sweepstakes, wagering pools, or lotteries United States District Court or the United States following acts. that are conducted by an agency of a state Court of Federal Claims.

if the wager is placed with the state • Failing to collect and pay over tax as the

agency or its authorized agents or employ- collecting agent (see Trust fund recovery

ees. penalty, next).

• Failing to keep adequate records. Rulings Program

Figuring the tax. The amount of the wager is • Failing to file returns. the amount risked by the bettor, including any The IRS has a program for assisting taxpayers

fee or charge incident to placing the wager. It is • Failing to pay taxes. who have technical problems with tax laws and

not the amount that the bettor stands to win. regulations. The IRS will answer inquiries from • Filing returns late. The tax is 2% of the wager if it is not author- individuals and organizations about the tax efized under the laws of the state in which ac- • Filing false or fraudulent returns. fect of their acts or transactions. The National

Page 30
Office of the IRS issues rulings on those mat- • Search regulations and the Internal Reve- Also, some IRS offices and libraries have

ters. nue Code. the Internal Revenue Code, regulations,

A ruling is a written statement to a taxpayer Internal Revenue Bulletins, and Cumula- • Receive our electronic newsletters on hot that interprets and applies tax laws to the tive Bulletins available for research pur- tax issues and news. taxpayer’s specific set of facts. There are also poses. determination letters issued by IRS directors • Learn about the benefits of filing electroni- • Services. You can walk in to your local and information letters issued by IRS directors cally (IRS e-file). IRS office to ask tax questions or get help or the National Office. • Get information on starting and operating There is a fee for most types of determination with a tax problem. Now you can set up an a small business. letters and rulings. For complete details of the appointment by calling your local IRS ofrulings program, see Publication 1375, Proce- fice number and, at the prompt, leaving a You can also reach us with your computer dures for Issuing Rulings, Determination Let- message requesting Everyday Tax Solu- using File Transfer Protocol at ftp.irs.gov. ters, and Information Letters, etc. tions help. A representative will call you

back within 2 business days to schedule TaxFax Service. Using the phone at- an in-person appointment at your conve- tached to your fax machine, you can nience. receive forms and instructions by call- How To Get Tax Help ing 703–368–9694. Follow the directions from

the prompts. When you order forms, enter the Mail. You can send your order for You can get help with unresolved tax issues, catalog number for the form you need. The items forms, instructions, and publications to order free publications and forms, ask tax ques- you request will be faxed to you. the Distribution Center nearest to you tions, and get more information from the IRS in For help with transmission problems, call the and receive a response within 10 workdays after several ways. By selecting the method that is FedWorld Help Desk at 703–487–4608. your request is received. Find the address that best for you, you will have quick and easy ac- applies to your part of the country. cess to tax help.

• Western part of U.S.: Contacting your Taxpayer Advocate. If you Phone. Many services are available by Western Area Distribution Center have attempted to deal with an IRS problem phone. Rancho Cordova, CA 95743–0001 unsuccessfully, you should contact your Taxpayer Advocate. • Central part of U.S.:

The Taxpayer Advocate represents your in- Central Area Distribution Center • Ordering forms, instructions, and publica- terests and concerns within the IRS by protect- tions. Call 1–800–829–3676 to order cur- P.O. Box 8903

ing your rights and resolving problems that have rent and prior year forms, instructions, and Bloomington, IL 61702–8903

not been fixed through normal channels. While publications. • Eastern part of U.S. and foreign Taxpayer Advocates cannot change the tax law • Asking tax questions. Call the IRS with addresses: or make a technical tax decision, they can clear

your tax questions at 1–800–829–4933. Eastern Area Distribution Center up problems that resulted from previous contacts and ensure that your case is given a com- P.O. Box 85074 • Solving problems. Take advantage of Eve- plete and impartial review. Richmond, VA 23261–5074 ryday Tax Solutions service by calling your To contact your Taxpayer Advocate: local IRS office to set up an in-person ap-

• Call the Taxpayer Advocate at pointment at your convenience. Check CD-ROM for tax products. You can

1–877–777–4778. your local directory assistance or order IRS Publication 1796, Federal

www.irs.gov for the numbers. Tax Products on CD-ROM, and obtain: • Call, write, or fax the Taxpayer Advocate

office in your area. • TTY/TDD equipment. If you have access

to TTY/TDD equipment, call 1–800–829– • Current tax forms, instructions, and publi- • Call 1–800–829–4059 if you are a 4059 to ask tax questions or to order cations. TTY/TDD user. forms and publications. • Prior-year tax forms and instructions.

For more information, see Publication 1546, • TeleTax topics. Call 1–800–829–4477 to • Popular tax forms that may be filled in The Taxpayer Advocate Service of the IRS. listen to pre-recorded messages covering electronically, printed out for submission, various tax topics. Free tax services. To find out what services and saved for recordkeeping.

are available, get Publication 910, Guide to Free • Internal Revenue Bulletins.

Tax Services. Evaluating the quality of our telephone serv- It contains a list of free tax publications and an index of tax topics. It also de- ices. To ensure that IRS representatives give The CD-ROM can be purchased from Na- scribes other free tax information services, accurate, courteous, and professional answers, tional Technical Information Service (NTIS) by including tax education and assistance pro- we use several methods to evaluate the quality calling 1–877–233–6767 or on the Internet at

grams and a list of TeleTax topics. of our telephone services. One method is for a http://www.irs.gov/cdorders. The first release second IRS representative to sometimes listen Personal computer. With your per- is available in early January and the final release in on or record telephone calls. Another is to ask sonal computer and modem, you can is available in late February. some callers to complete a short survey at the access the IRS on the Internet at end of the call. www.irs.gov. While visiting our web site, you CD-ROM for small businesses. IRS

can: Publication 3207, Small Business ReWalk-in. Many products and services source Guide, is a must for every small • See answers to frequently asked tax ques- are available on a walk-in basis. business owner or any taxpayer about to start a tions or request help by e-mail. business. This handy, interactive CD contains

• Download forms and publications or all the business tax forms, instructions and pubsearch for forms and publications by topic lications needed to successfully manage a busi- • Products. You can walk in to many post or keyword. ness. In addition, the CD provides an offices, libraries, and IRS offices to pick up

certain forms, instructions, and publica- abundance of other helpful information, such as • Order IRS products on-line. how to prepare a business plan, finding financ- tions. Some IRS offices, libraries, grocery • View forms that may be filled in electroni- stores, copy centers, city and county gov- ing for your business, and much more. The de- cally, print the completed form, and then ernments, credit unions, and office supply sign of the CD makes finding information easy save the form for recordkeeping. stores have an extensive collection of and quick and incorporates file formats and

• View Internal Revenue Bulletins published products available to print from a CD-ROM browsers that can be run on virtually any

in the last few years. or photocopy from reproducible proofs. desktop or laptop computer.

Page 31
 It is available in March. You can get a free ATF Form 5630.5: • Manufacturers who use alcohol to produce

copy by calling 1-800-829-3676 or by visiting the nonbeverage products. Alcohol, Tobacco; website at www.irs.gov/smallbiz. ATF Form 5630.7: Firearms • Importers and wholesalers of imported

perfumes.

A number of excise taxes apply to alcoholic

beverages, tobacco products, and firearms. If The businesses covered by Form 5630.7 inyou produce, sell, or import guns, tobacco, or clude manufacturers, importers, and dealers in Appendix A alcoholic products, or if you manufacture equip- firearms (National Firearms Act).

ment for their production, you may be liable for

This appendix provides information about forms one or more excise taxes. Use Form 5630.5 ATF Form 5300.26: Firearms

(Alcohol, Tobacco) or Form 5630.7 (Firearms), you may have to use to report certain excise Special Tax Registration and Return, to register Use ATF Form 5300.26, Federal Firearms and taxes not covered in this publication. your place of business and pay an annual tax. Ammunition Excise Tax Return, to determine

If you need forms or more information The businesses covered by Form 5630.5 in- your firearms excise tax liability. Mail all domesabout the forms, write to or call: clude the following. tic firearms excise tax returns to the special

purpose post office box (lockbox) as indicated • Brewers and dealers of liquor, wine, or on the return form. File returns for Puerto Rico beer. and the Virgin Islands with the Chief, Puerto

National Revenue Center • Distillers, importers, and wholesale and re- Rico Operations, Alcohol, Tobacco, and FireSpecial Occupational Tax tail dealers of distilled spirits. arms.

550 Main Street

Cincinnati, OH 45202

(513) 684–2979 or 1–800–937–8864

National Revenue Center

Excise Tax

550 Main Street

Cincinnati, OH 45250–3263

(513) 684–3334 or 1–800–398–2282

Page 32
Part I. Products that are mixtures containing ODCs

Imported Products Table

Mixtures containing ODCs, including but not limited to:

—anti-static sprays

—automotive products such as “carburetor cleaner,” “stop

leak,” “oil charge”

—cleaning solvents

—contact cleaners

—degreasers

—dusting sprays

—electronic circuit board coolants

—electronic solvents

—Ethylene oxide/CFC-12

—fire extinguisher preparations and charges

—flux removers for electronics

—insect and wasp sprays

—mixtures of ODCs

—propellants

—refrigerants

Part II. Products in which ODCs are used for purposes of refrigeration or air conditioning, creating an

aerosol or foam, or manufacturing electronic components

Product Name

Harmonized Tariff

Schedule Heading ODC ODC Weight

Rigid foam insulation defined in §52.4682-1(d)(3)

Foams made with ODCs, other than foams

defined in §52.4682-1(d)(3)

Scrap flexible foam made with ODCs

Medical products containing ODCs—

—surgical staplers

—cryogenic medical instruments

—drug delivery systems

—inhalants

Dehumidifiers, household

Chillers:

charged with CFC-12

charged with CFC-114

charged with R-500

Refrigerator-freezers, household:

not > 184 liters

> 184 liters but not > 269 liters

> 269 liters but not > 382 liters

> 382 liters

Refrigerators, household

not > 184 liters

> 184 liters but not > 269 liters

> 269 liters but not > 382 liters

> 382 liters

Freezers, household

Freezers, household

Refrigerating display counters not

> 227 kg

8415.82.00.50

8415.82.00.65

8418.10.00.10

8418.10.00.20

8418.10.00.30

8418.10.00.40

8418.21.00.10

8418.21.00.20

8418.21.00.30

8418.21.00.90

8418.30

8418.40

8418.50

CFC-12

CFC-12

CFC-114

CFC-12

CFC-11

0.344

1600.

1250.

1920.

1.081

0.13

1.321

0.26

1.541

0.35

1.871

0.35

1.081

1.321

0.261

1.541

0.35

1.871

0.35

2.01

0.4

2.01

0.4

50.01

CFC-12 260.0

CFC-11

CFC-12

CFC-11

CFC-12

CFC-11

CFC-12

CFC-11

CFC-12

CFC-11

CFC-12

CFC-11

0.13

CFC-12

CFC-11

CFC-12

CFC-11

CFC-12

CFC-11

CFC-12

CFC-11

CFC-12

Appendix B

This appendix provides the Imported Products Table. This is a listing of imported products containing or manufactured with ozone-depleting

chemicals (ODCs). See Imported Taxable Products for more information on these tables.

Page 33
Part II. (continued)

Product Name

Harmonized Tariff

Schedule Heading ODC ODC Weight

CFC-12

Icemaking machines:

charged with CFC-12

charged with R-502

Drinking water coolers:

charged with CFC-12

charged with R-500

Centrifugal chillers, hermetic:

charged with CFC-12

charged with CFC-114

charged with R-500

Reciprocating chillers:

charged with CFC-12

Mobile refrigeration systems:

containers

trucks

trailers

Refrigeration condensing units:

not > 746W

> 746W but not > 2.2KW

> 2.2 KW but not > 7.5KW

> 7.5KW but not > 22.3 KW

>22.3KW

Fire extinguishers, charged w/ODCs

Electronic typewriters and word processors

Electronic calculators

Electronic calculators w/printing device

Electronic calculators

Account machines

Cash registers

Digital automatic data processing machines

w/cathode ray tube, not included in

subheading 8471.20.00.90

Laptops, notebooks, and pocket computers

Digital processing unit w/entry value

not > $100K

> $100K

Combined input/output units (terminal)

Keyboards

Display units

Printer units

Input or output units

Hard magnetic disk drive units not included in

subheading 8471.93.10 for a disk of a

diameter:

not > 9 cm (31⁄2 inches)

> 9 cm (31⁄2 inches) but not > 21 cm

(81⁄4 inches)

Nonmagnetic storage unit w/entry value > $1,000

Magnet disk drive unit for a disk of a diameter

over 21 cm (81⁄4 inches)

Power supplies

8418.69

8418.69

8418.69

8418.69

8418.99

8418.99.00.05

8418.99.00.10

8418.99.00.15

8418.99.00.20

8418.99.00.25

8424

8469

8470.10

8470.21

8470.29

8470.40

8470.50

8471.20

8471.20.00.90

8471.91

8471.91

8471.92

8471.92

8471.92

8471.92

8471.92

8471.93

8471.93

8471.93

8471.93.10

8471.99.30

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-12

CFC-115

CFC-114

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

1.4

3.39

0.21

0.22

1600.

1250.

1920.

200.

15.

11.

20.

0.3

1.0

3.0

8.5

17.0

0.2049

0.0035

0.0057

0.0035

0.1913

0.1913

0.3663

0.03567

0.4980

27.6667

0.3600

0.0742

0.0386

0.1558

0.1370

0.2829

1.1671

2.7758

4.0067

0.0655

Page 34
Part II. (continued)

Product Name

Harmonized Tariff

Schedule Heading ODC ODC Weight

CFC-12

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

Electronic office machines

Populated cards for digital processing unit in

subheading 8471.91 with value:

not > $100K

> $100 K

Automatic goods—vending machines with

refrigerating device

Microwave ovens with electronic controls, with

capacity of:

0.99 cu. ft. or less

1.0 through 1.3 cu. ft.

1.31 cu. ft. or greater

Microwave oven combination with electronic

controls

Telephone sets w/entry value:

not > $11.00

> $11.00

Teleprinters & teletypewriters

Switching equipment not included in subheading

8517.30.20

Private branch exchange switching equipment

Modems

Intercoms

Facsimile machines

Loudspeakers, microphones, headphones, &

electric sound amplifier sets, not included in

subheading 8518.30.10

Telephone handsets

Turntables, record players, cassette players, and

other sound reproducing apparatus

Magnetic tape recorders & other sound recording

apparatus, not included in subheading

8520.20

Telephone answering machines

Color video recording/reproducing apparatus

Videodisc players

Cordless handset telephones

Cellular communication equipment

TV cameras

Camcorders

Radio combinations

Radios

Motor vehicle radios with or w/o tape player

Radio combinations

Radios

Tuners w/o speaker

Television receivers

VCRs

Home satellite earth stations

Electronic assemblies for HTS headings 8525,

8527, & 8528

8472

8473.30

8473.30

8476.11

8476.50

8516.50.40.60

8517.10

8517.10

8517.20

8517.30

8517.30.20

8517.40

8517.81

8517.82

8518

8518.30.10

8519

8520

8520.20

8521.10.00.20

8521.90

8525.20.50

8525.20.60

8525.30

8525.30

8527.11

8527.19

8527.21

8527.31

8527.32

8527.39.00.20

8528

8528.10.40

8528.10.80.55

8529.90

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

0.001

0.1408

4.82

0.45

0.0300

0.0441

0.0485

0.0595

0.0225

0.1

0.1

0.1267

0.0753

0.0225

0.0225

0.0225

0.0022

0.042

0.0022

0.0022

0.1

0.0586

0.0106

0.1

0.4446

1.423

0.0586

0.0022

0.0014

0.0021

0.0022

0.0014

0.0022

0.0386

0.0586

0.0106

0.0816

Page 35
Part II. (continued)

Product Name

Harmonized Tariff

Schedule Heading ODC ODC Weight

CFC-12

CFC-113

CFC-113

CFC-113

Indicator panels incorporating liquid crystal

devices or light emitting diodes

Printed circuits

Computerized numerical controls

Diodes, crystals, transistors and other similar

discrete semiconductor devices

Electronic integrated circuits and

microassemblies

Signal generators

Avionics

Signal generators subassemblies

Insulated or refrigerated railway freight cars

Passenger automobiles:

foams (interior)

foams (exterior)

with charged a/c

without charged a/c

electronics

Light trucks:

foams (interior)

foams (exterior)

with charged a/c

without charged a/c

electronics

Heavy trucks and tractors, with GVW 33,001 lbs

or more:

foams (interior)

foams (exterior)

with charged a/c

without charged a/c

electronics

Motorcycles with seat foamed with ODCs

Bicycles with seat foamed with ODCs

Seats foamed with ODCs

Aircraft

Optical fibers

Electronic cameras

Photocopiers

Avionics

Electronic drafting machines

Complete patient monitoring systems

Complete patient monitoring systems;

subassemblies thereof

Physical or chemical analysis instruments

Oscilloscopes

Foam chairs

Foam sofas

Foam mattresses

8531.20

8534

8537.10.00.30

8541

8542

8543.20

8543.90.40

8543.90.80

8606

8703

8704

8704

8711

8712

8714.95

8802

9001

9006

9009

9014.20

9017

9018.19.80

9018.19.80.60

9027

9030

9401

9401

9404.21

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-11

CFC-11

CFC-11

CFC-12

CFC-113

CFC-12

CFC-11

CFC-11

CFC-12

CFC-113

CFC-12

CFC-11

CFC-11

CFC-12

CFC-113

CFC-11

CFC-11

CFC-11

CFC-12

CFC-113

CFC-12

CFC-113

CFC-113

CFC-113

CFC-113

CFC-12

CFC-113

CFC-113

CFC-12

CFC-113

CFC-11

CFC-12

CFC-113

CFC-11

CFC-11

CFC-11

0.0146

0.001

0.1306

0.0001

0.0002

0.6518

0.915

0.1265

100.1

0.8

0.7

2.0

0.2

0.5

0.6

0.1

2.0

0.2

0.4

0.6

0.1

3.0

2.0

0.4

0.04

0.04

0.04

0.25 lb./1000 lbs

Operating Empty

Weight (OEW)

30.0 lbs./1000 lbs. OEW

0.005 lb./ thousand feet

0.01

0.0426

0.915

0.12

0.94

3.4163

1.9320

0.0003

0.0271

0.49

0.5943

0.2613

0.30

0.75

1.60

Page 36
Part II. (continued)

Product Name

Harmonized Tariff

Schedule Heading ODC ODC Weight

CFC-113

CFC-113

CFC-113

Electronic games and electronic components

thereof

Electronic items not otherwise listed in

the Table

not included in HTS

chapters 84, 85, 90

9504

0.0004 pound/$1.00 of

entry value

included in HTS

chapters 84, 85, 90

0.0004 pound/$1.00 of

entry value

Part III.

Product Name

Harmonized Tariff

Schedule Heading

Products that are not imported taxable products

Room air conditioners

Dishwashers

Clothes washers

Clothes dryers

Floppy disk drive units

Transformers and inductors

Toasters

Unrecorded media

Recorded media

Capacitors

Resistors

Switching apparatus

Cathode tubes

8415.10.00.60

8422.11

8450.11

8451.21

8471.93

8504

8516.72

8523

8524

8532

8533

8536

8540

1 Denotes an ODC used in the manufacture of rigid foam insulation.

Page 37
Model Certificate A

FIRST TAXPAYER’S REPORT

1.

2.

3.

4.

5.

6.

First Taxpayer’s name, address, and employer identification number

Name, address, and employer identification number of the buyer of the taxable fuel subject to tax

Date and location of removal, entry, or sale

Volume and type of taxable fuel removed, entered, or sold

Check type of taxable event:

Removal from refinery

Entry into United States

Bulk transfer from terminal by unregistered position holder

Bulk transfer not received at an approved terminal

Sale within the bulk transfer/terminal system

Removal at the terminal rack

Removal or sale by the blender

Amount of federal excise tax paid on account of the removal, entry, or sale

The undersigned taxpayer (“Taxpayer”) has not received, and will not claim, a credit with respect to, or a refund of, the tax on the

taxable fuel to which this form relates.

Under penalties of perjury, Taxpayer declares that Taxpayer has examined this statement, including any accompanying schedules and

statements, and, to the best of Taxpayer’s knowledge and belief, they are true, correct and complete.

Signature and date signed

Printed or typed name of person signing this report

Title

Appendix C

This appendix contains models of the certificates, reports, and statements discussed earlier under Fuel Taxes.

Page 38
Model Certificate B

STATEMENT OF SUBSEQUENT SELLER

1.

2.

3.

4.

Name, address, and employer identification number of seller in subsequent sale

Name, address, and employer identification number of the buyer in subsequent sale

Date and location of subsequent sale

Volume and type of taxable fuel sold

The undersigned seller (“Seller”) has received the copy of the first taxpayer’s report provided with this statement in connection with

Seller’s purchase of the taxable fuel described in this statement.

Under penalties of perjury, Seller declares that Seller has examined this statement, including any accompanying schedules and

statements, and, to the best of Seller’s knowledge and belief, they are true, correct and complete.

Signature and date signed

Printed or typed name of person signing this report

Title

Page 39
Model Certificate C

NOTIFICATION CERTIFICATE OF TAXABLE FUEL REGISTRANT

Name, address, and employer identification number of person receiving certificate

The undersigned taxable registrant (“Registrant”) hereby certifies under penalties of perjury that Registrant is registered by the Internal

Revenue Service with registration number and that Registrant’s registration has not been revoked or suspended by the

Internal Revenue Service.

Registrant understands that the fraudulent use of this certificate may subject Registrant and all parties making such fraudulent use of

this certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Signature and date signed

Printed or typed name of person signing

Title of person signing

Name of Registrant

Employer identification number

Address of Registrant

Page 40
Model Certificate D

CERTIFICATE OF PERSON BUYING GASOLINE BLENDSTOCKS FOR USE OTHER THAN IN THE PRODUCTION OF

FINISHED GASOLINE

Name, address, and employer identification number of seller

Signature and date signed

Printed or typed name of person signing

Title of person signing

Name of Buyer

Employer identification number

Address of Buyer

(To support tax-free sales under section 4081 of the Internal Revenue Code.)

The undersigned buyer (“Buyer”) hereby certifies the following under penalties of perjury:

The gasoline blendstocks to which this certificate relates will not be used to produce finished gasoline.

This certificate applies to the following (complete as applicable):

If this is a single purchase certificate, check here and enter:

1. Invoice or delivery ticket number

2. (number of gallons) of (type of gasoline blendstocks)

If this is a certificate covering all purchases under a specified account or order number, check here and enter:

1. Effective date

2. Expiration date

(period not to exceed 1 year after the effective date)

3. Type (or types) of gasoline blendstocks

4. Buyer account or order number

Buyer will not claim a credit or refund under section 6427(h) of the Internal Revenue Code for any gasoline blendstocks covered by this

certificate.

Buyer will provide a new certificate to the seller if any information in this certificate changes.

If Buyer resells the gasoline blendstocks to which this certificate relates, Buyer will be liable for tax unless Buyer obtains a certificate

from the purchaser stating that the gasoline blendstocks will not be used to produce finished gasoline and otherwise complies with the

conditions of §48.4081-4(b)(3) of the Manufacturers and Retailers Excise Tax Regulations.

Buyer understands that if Buyer violates the terms of this certificate, the Internal Revenue Service may withdraw Buyer’s right to

provide a certificate.

Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been withdrawn. In addition, the

Internal Revenue Service has not notified Buyer that the right to provide a certificate has been withdrawn from a purchaser to which Buyer

sells gasoline blendstocks tax free.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such fraudulent use of this

certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Page 41
Model Certificate E

CERTIFICATE OF REGISTERED GASOHOL BLENDER

Name, address, and employer identification number of seller

(To support sales of gasoline at the gasohol production tax rate under section 4081(c) of the Internal Revenue Code)

Name of buyer (“Buyer”) certifies the following under penalties of perjury:

Buyer is registered as a gasohol blender with registration number . Buyer’s registration has not been suspended or

revoked by the Internal Revenue Service.

The gasoline bought under this certificate will be used by Buyer to produce gasohol (as defined in §48.4081-(6)(b) of the Manufacturers

and Retailers Excise Tax Regulations) within 24 hours after buying the gasoline.

Type of gasohol Buyer will produce (check one only):

10% gasohol

7.7% gasohol

5.7% gasohol

If the gasohol the Buyer will produce will contain ethanol, check here:

This certificate applies to the following (complete as applicable):

If this is a single purchase certificate, check here and enter:

1. Account number

2. Number of gallons

If this is a certificate covering all purchases under a specified account or order number, check here and enter:

1. Effective date

2. Expiration date

(period not to exceed 1 year after the effective date)

3. Buyer account or order number

Buyer will not claim a credit or refund under section 6427(f) of the Internal Revenue Code for any gasoline covered by this certificate.

Buyer agrees to provide seller with a new certificate if any information in this certificate changes.

Buyer understands that Buyer’s registration may be revoked if the gasoline covered by this certificate is resold or is used other than in

Buyer’s production of the type of gasohol identified above.

Buyer will reduce any alcohol mixture credit under section 40(b) by an amount equal to the benefit of the gasohol production tax rate

under section 4081(c) for the gasohol to which this certificate relates.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making any fraudulent use of this

certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Printed or typed name of person signing

Title of person signing

Employer identification number

Address of Buyer

Signature and date signed

Page 42
Model Certificate F

CERTIFICATE OF PERSON BUYING AVIATION-GRADE KEROSENE FOR USE AS A FUEL IN AN AIRCRAFT

(To support tax-free removals and entries of aviation-grade kerosene under section 4082 of the Internal Revenue Code.)

Printed or typed name of person signing

Title of person signing

Employer identification number

Address of Buyer

Signature and date signed

Name of buyer

(Buyer) certifies the following under penalties of perjury:

The aviation-grade kerosene to which this certificate applies will be used by Buyer as a fuel in an aircraft or resold by Buyer for that

use.

2. All purchases between (effective date) and (expiration date) (period not to exceed one year after the

effective date) under account or order number(s) . If this certificate applies only to Buyer’s purchases for certain locations,

check here and list the locations.

1. A single purchase on invoice or delivery ticket number .

This certificate applies to percent of Buyer’s purchases from (name, address, and employer

identification number of seller) as follows (complete as applicable):

Buyer is buying the kerosene for (check either or both as applicable):

Buyer’s use as a fuel in an aircraft.

Resale for use as a fuel in an aircraft.

Buyer will provide a new certificate to the seller if any information in this certificate changes.

If Buyer sells the aviation-grade kerosene to which this certificate relates and does not deliver it into the fuel supply tank of an aircraft,

Buyer will be liable for tax unless Buyer obtains a certificate from its buyer stating that the aviation-grade kerosene will be used as a fuel in

an aircraft.

If Buyer violates the terms of this certificate, the Internal Revenue Service may withdraw Buyer’s right to provide a certificate.

Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been withdrawn.

The fraudulent use of this certificate may subject Buyer and all parties making any fraudulent use of this certificate to a fine or

imprisonment, or both, together with the costs of prosecution.

Page 43
Model Certificate G

CERTIFICATE OF REGISTERED FEEDSTOCK USER

(To support tax-free removals and entries of kerosene under section 4082 of the Internal Revenue Code.)

Printed or typed name of person signing

Title of person signing

Employer identification number

Address of Buyer

Signature and date signed

Name of buyer

(Buyer) certifies the following under penalties of perjury:

Buyer is a registered feedstock user with registration number . Buyer’s registration has not been revoked or

suspended.

2. All purchases between (effective date) and (expiration date) (period not to exceed one year after the

effective date) under account or order number(s) . If this certificate applies only to Buyer’s purchases for certain locations,

check here and list the locations.

1. A single purchase on invoice or delivery ticket number .

This certificate applies to percent of Buyer’s purchases from (name, address, and employer

identification number of seller) as follows (complete as applicable):

If Buyer sells the kerosene to which this certificate relates, Buyer will be liable for tax on that sale.

Buyer will provide a new certificate to the seller if any information in this certificate changes.

If Buyer violates the terms of this certificate, the Internal Revenue Service may revoke the Buyer’s registration.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making any fraudulent use of this

certificate to a fine or imprisonment, or both, together with the costs of prosecution.

The kerosene to which this certificate applies will be used by Buyer for a feedstock purpose.

Page 44
Model Certificate H

FIRST PRODUCER’S REPORT

First Producer’s name, address, and employer identification number

Printed or typed name of person signing

Title of person signing

Signature and date signed

Under penalties of perjury, First Producer declares that First Producer has examined this statement, including any accompanying

schedules and statements, and, to the best of First Producer’s knowledge and belief, it is true, correct and complete.

Buyer’s name, address, and employer identification number

Date and location of taxable sale

Volume and type of aviation fuel sold

Amount of federal excise tax paid on account of the sale

Model Certificate I

STATEMENT OF SUBSEQUENT SELLER (AVIATION FUEL)

Name, address, and employer identification number of seller in subsequent sale

Printed or typed name of person signing

Title of person signing

Signature and date signed

Under penalties of perjury, Seller declares that Seller has examined this statement, including any accompanying schedules and

statements, and, to the best of Seller’s knowledge and belief, it is true, correct and complete.

Name, address, and employer identification number of buyer in subsequent sale

Date and location of subsequent sale

Volume and type of aviation fuel sold

The undersigned seller (Seller) has received the copy of the first producer’s report provided with this statement in connection with

Seller’s purchase of the aviation fuel described in this statement.

Page 45
Model Certificate J

CERTIFICATE OF PERSON BUYING COMPRESSED NATURAL GAS (CNG) FOR A NONTAXABLE USE

Name, address, and employer identification number of seller

(To support tax-free sales of CNG under section 4041 of the Internal Revenue Code.)

Printed or typed name of person signing

Title of person signing

Employer identification number

Address of Buyer

Signature and date signed

(Name of buyer)

(“Buyer”) certifies the following under penalties of perjury:

The CNG to which this certificate relates will be used in a nontaxable use.

This certificate applies to the following (complete as applicable):

If this is a single purchase certificate, check here and enter:

1. Invoice or delivery ticket number

2. (number of MCFs)

If this is a certificate covering all purchases under a specified account or order number, check here and enter:

1. Effective date

2. Expiration date

(period not to exceed 1 year after the effective date)

3. Buyer account or order number

Buyer will not claim a credit or refund under section 6427 of the Internal Revenue Code for any CNG to which this certificate relates.

Buyer will provide a new certificate to the seller if any information in this certificate changes.

Buyer understands that if Buyer violates the terms of this certificate, the Internal Revenue Service may withdraw Buyer’s right to

provide a certificate.

Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been withdrawn. In addition, the

Internal Revenue Service has not notified Buyer that the right to provide a certificate has been withdrawn from a purchaser to which Buyer

sells CNG tax free.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making any fraudulent use of this

certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Page 46
To help us develop a more useful index, please let us know if you have ideas for index entries. Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A Coal: Exceptions ............ 3 1363 ................ 7

Affiliated corporations ....... 7 Blending . . . . . . . . . . . . . 22 Ozone-depleting 2290 ................ 2

Air transportation taxes: Exemptions . . . . . . . . . . . 22 chemicals ............ 2 5300.26 . . . . . . . . . . . . . 32

Producer . . . . . . . . . . . . . 21 United States (defined) .... 3 5630.5 . . . . . . . . . . . . . . 32 225-mile-zone rule ....... 6

Production . . . . . . . . . . . . 21 Examination procedures . . . . 30 5630.7 . . . . . . . . . . . . . . 32 Alaska . . . . . . . . . . . . . 6, 7 Selling price . . . . . . . . . . . 22 Excluded liquid . . . . . . . . . . 12 6197 .......... 22, 23, 27 Baggage .............. 7

Tax rates . . . . . . . . . . . . 21 637 . . . . . . . . . . . . . . . . . 2 Bonus tickets ........... 7 Exempt articles, retail tax . . . 25

Coin-operated telephones .... 5 6478 . . . . . . . . . . . . . . . 19 Credits or refunds ........ 7 Exempt communication services:

Comments 6627 . . . . . . . . . . . . . . 2, 27 Exemptions ............ 6 .............. 2 American Red Cross ...... 5 720 . . . . . . . . . . . . . . 23, 27 Export ............... 7 Commercial waterway Answering service ....... 5 720X . . . . . . . . . . . . . . . 27

Fixed-wing ambulance ..... 7 transportation . . . . . . . . . . 18 Coin-operated telephones . . 5 730 . . . . . . . . . . . . . . . . 30

Hawaii Communications taxes: Common carriers ........ 5 . . . . . . . . . . . . . 6, 7 8109 . . . . . . . . . . . . . . . 27 Coin-operated telephones . . 5 Installation charges ....... 5 Helicopters ............ 7 SS-4 . . . . . . . . . . . . . . . 27 Credits or refunds ........ 5 International International air travel Free tax services . . . . . . . . . 31 Deposits . . . . . . . . . . . . . 28 organizations ......... 5 facilities ............. 7

Military personnel Fuels: Exemptions ............ 5 ........ 5 Military personnel ........ 7 Mobile radio telephone Aviation . . . . . . . . . . . . . 16 Figuring the tax ......... 4 Package tours .......... 6 Compressed natural gas . . 18 Local telephone service .... 4 service ............. 5 Persons by air .......... 6 Diesel . . . . . . . . . . . . . . . 12 Prepaid telephone cards . . . 5 News services .......... 5 Persons liable . . . . . . . . 6, 7 Gasohol . . . . . . . . . . . . . 11 Private communication Nonprofit educational Property by air .......... 7 Gasoline .............. 9 service ............. 4 organizations ......... 5

Tax rates ............. 6 Kerosene . . . . . . . . . . . . 12 Teletypewriter exchange Nonprofit hospitals ....... 5

Taxable transportation ..... 6 Special motor fuel . . . . . . . 17 service ............. 4 Private communication

Travel agency .......... 6 Used on inland Toll telephone service ..... 4 service ............. 4

Uninterrupted waterways . . . . . . . . . . 18 WATS service .......... 5 Radio broadcasts ........ 5

international .......... 6 Compressed natural gas . . . . 18 Security systems ........ 5

Aircraft: Credit or refund: Exempt sales, heavy G Affiliated corporations ..... 7 Gas guzzler tax . . . . . . . . 23 trucks . . . . . . . . . . . . . . . 25 Gambling . . . . . . . . . . . . . . 26 Fixed-wing air ambulance . . 7 Gasoline tax . . . . . . . . . . 11 Exemptions: Gas guzzler tax: Helicopters ............ 7 General rules . . . . . . . . . . 29 Air transportation taxes .... 6 Automobiles . . . . . . . . . . 22 Museums . . . . . . . . . . . . 17 Manufacturers taxes . . . . . 20 Bonus tickets ........... 7 Credit or refund . . . . . . . . 23 Small planes ........... 7 Resale of tax-paid Coal . . . . . . . . . . . . . . . . 22 Limousines . . . . . . . . . . . 23

Alaska: semitrailers . . . . . . . . . . 24 Communications taxes .... 5 Vehicles not subject to Air transportation taxes .... 6 Retail tax . . . . . . . . . . . . 26 Federal government ...... 5 tax . . . . . . . . . . . . . . . 23

Tax on diesel fuel or Tire tax . . . . . . . . . . . . . . 22 Fixed-wing air ambulance . . 7 Gasohol . . . . . . . . . . . . . . . 11

kerosene . . . . . . . . . . . 13 Vaccines . . . . . . . . . . . . . 23 For export . . . . . . . . . . . . 20 Gasoline blendstocks . . . . . . 10

Alternative method Wagering taxes . . . . . . . . 30 Further manufacturing . . . . 20 Gasoline, defined ......... 9 deposits . . . . . . . . . . . . . 28 Helicopters ............ 7

American Red Cross ....... 5 Indian handicrafts . . . . . . . 20

Answering service ......... 5 D Indian tribal governments . . . 5 H

Appeal procedures . . . . . . . . 30 Deposits: Military personnel ........ 7 Hawaii, air transportation Alternative method . . . . . . 28 Nonprofit educational Approved refinery, defined . . . 8 taxes ................ 6

Approved terminal, defined . . . 8 Electronic . . . . . . . . . . . . 28 organizations . . . . . . . 5, 20 Heavy trucks: Exceptions . . . . . . . . . . . 28 State and local First retail sale, defined . . . 24 Arrow components . . . . . . . . 21 Federal tax deposit governments . . . . . . . 5, 20 Further manufacture . . . . . 25 Assistance (See Tax help) coupons . . . . . . . . . . . . 27 Tires . . . . . . . . . . . . . . . 22 Glider kits . . . . . . . . . . . . 25 Aviation fuel . . . . . . . . . . . . 16 Net tax liability . . . . . . . . . 28 Vessel supplies . . . . . . . . 20 Installment sales . . . . . . . 25 Aviation gasoline, defined .... 9 Regular method . . . . . . . . 28 Parts or accessories . . . . . 24

Requirements . . . . . . . . . 27 Presumptive retail sales Safe harbor rule . . . . . . . . 28 F price . . . . . . . . . . . . . . 24 B When to make . . . . . . . . . 28 Farming . . . . . . . . . . . . . . . 15 Related persons . . . . . . . . 25 Back-up tax . . . . . . . . . . . . 15 Diesel fuel: Federal government ........ 5 Separate purchases . . . . . 24

Biodiesel, defined ......... 8 Buses . . . . . . . . . . . . . . . 15 Federal tax deposit Tax base . . . . . . . . . . . . . 25

Blended taxable fuel, Definitions . . . . . . . . . . . . 12 coupons . . . . . . . . . . . . . 27 Tax rate . . . . . . . . . . . . . 23

defined ............... 8 Exemption . . . . . . . . . . . . 13 Firearms . . . . . . . . . . . . . . 32 Helicopters . . . . . . . . . . . . 7, 17

Blender, defined .......... 9 Farm . . . . . . . . . . . . . . . 15 Fixed-wing air ambulance . . . 17 Help (See Tax help) Bonus tickets ............ 7 Dyed diesel fuel . . . . . . . . . . 14 Floor stocks tax: Highway use tax .......... 2

Bows . . . . . . . . . . . . . . . . . 21 Dyed kerosene . . . . . . . . . . 14 Ozone-depleting Highway vehicle Bulk transfer, defined ....... 9 chemicals ............ 4 (Diesel-powered) . . . . . . . 12

Bulk transfer/terminal system, Form 720: E defined ............... 9 Attachments . . . . . . . . . . 27 EFTPS . . . . . . . . . . . . . . . 28 Due dates I Buses: . . . . . . . . . . . . 27

Diesel fuel Electric outboard motors . . . . 21 Final return . . . . . . . . . . . 27 Imported taxable products . . . . . . . . . . . . 15

Employer identification (ODCs) Paying the tax . . . . . . . . . 27 ............... 3 Kerosene . . . . . . . . . . . . 15

Tire tax number . . . . . . . . . . . . . . 27 Schedule A . . . . . . . . . . . 27 Information returns, liquid . . . . . . . . . . . . . . 22

Enterer, defined ........... 9 Schedule C . . . . . . . . . . . 27 products .............. 8

Entry, defined ............ 9 Special one-time filing . . . . 27 Interest and penalties . . . . . . 30

C Environmental taxes: Form: International air travel

Chemicals, ozone-depleting: Credit or refund . . . . . . . . . 3 11–C . . . . . . . . . . . . . . . 29 facilities .............. 7

Page 47
K Ozone-depleting chemicals: Cost of transportation . . . . 19 Trucks . . . . . . . . . . . . . . 23

Kerosene: Floor stocks tax ......... 4 Delivery costs . . . . . . . . . 19 Taxable fuel registrant ...... 8

Buses . . . . . . . . . . . . . . . 15 Imported taxable Discounts . . . . . . . . . . . . 19 Taxpayer Advocate . . . . . . . 31

Definitions . . . . . . . . . . . . 12 products ............ 3 Installation costs . . . . . . . . 19 Teletypewriter exchange

Exemption . . . . . . . . . . . . 13 Insurance costs . . . . . . . . 19 service ............... 4

Farming . . . . . . . . . . . . . 15 Local advertising P Terminal operator, defined . . . 9 charges . . . . . . . . . . . . 19 Penalties: Terminal, defined .......... 9 Manufacturers excise L Dyed diesel fuel . . . . . . . . 14 Throughputter, defined ...... 9 tax . . . . . . . . . . . . . . . 19

Liquid products, information Dyed kerosene . . . . . . . . . 14 Tires: Rebates . . . . . . . . . . . . . 19

returns ............... 8 Pipeline operator, defined .... 9 Credit against heavy truck Retail dealer preparation Local telephone service ..... 4 Position holder, defined ..... 9 tax . . . . . . . . . . . . . . . 26 costs . . . . . . . . . . . . . . 19

Prepaid telephone cards ..... 5 Warranty charges Credit or refund of tax . . . . 22 . . . . . . . 20

Publications (See Tax help) Exemptions . . . . . . . . . . . 22 M Security systems .......... 5 Manufacturers taxes . . . . . 22 Manufacturer, defined . . . . . . 19 Ship passenger tax . . . . . . . 26 Weight determination . . . . 22

Manufacturers taxes: R Sonar devices . . . . . . . . . . . 21 Toll telephone services ...... 4 Arrow components . . . . . . 21 Rack, defined ............ 9 Special motor fuels . . . . . . . 17 Train (Diesel-powered) . . . . . 12 Bows . . . . . . . . . . . . . . . 21 Radio broadcasts ......... 5 Sport fishing equipment: Travel agency ............ 6 Coal . . . . . . . . . . . . . . . . 21 Refiner, defined ........... 9 List of equipment . . . . . . . 21 TTY/TDD information . . . . . . 31 Credits or refunds . . . . . . . 20 Refinery, defined .......... 9 Resales . . . . . . . . . . . . . 21

Exemptions . . . . . . . . . . . 20 Refund of second tax State and local ....... 8 Gas guzzler tax . . . . . . . . 22 governments ........... 5 U Registrant .............. 8 Lease . . . . . . . . . . . . . . . 19 State, defined ............ 9 Uninterrupted international Registrant, defined ......... 9 Lease payments . . . . . . . . 20 Suggestions ............. 2 air transportation . . . . . . 6, 7 Registration: Partial payments . . . . . . . 20

Registration Form 637 ............. 2 . . . . . . . . . . . 20

Gasoline .............. 8 T V Related person . . . . . . . . 21

Kerosene ............. 8 Tax help Vaccines: Requirements for exempt . . . . . . . . . . . . . . . 31

Registration-required Credit or refund . . . . . . . . 23 sales . . . . . . . . . . . . . . 20 Tax rate:

obligations . . . . . . . . . . . . 27 Manufacturers tax . . . . . . . 23 Sale . . . . . . . . . . . . . . . . 19 Air transportation of

Sport fishing equipment . . . 21 Regular method deposits . . . 28 persons Vehicles: ............. 6

Tires . . . . . . . . . . . . . . . 22 Related persons: Air transportation of Gas guzzler . . . . . . . . . . . 22

Vaccines . . . . . . . . . . . . . 23 Heavy trucks . . . . . . . . . . 25 property ............. 7 Imported . . . . . . . . . . . . . 23

Mobile radio telephone Sport fishing equipment . . . 21 Arrow components . . . . . . 21 Law enforcement . . . . . . . 23

service ............... 5 Removal, defined ......... 9 Bows . . . . . . . . . . . . . . . 21 Vessel operator, defined ..... 9

More information (See Tax help) Restoration of vehicles . . . . . 25 Coal . . . . . . . . . . . . . . . . 21

Retail tax: Communications tax ...... 4 W

Credits and refunds Electric outboard motor . . . 21 N . . . . . . 26 Wagering taxes:

Heavy trucks International air travel

News services . . . . . . . . . . 23 Credit or refund . . . . . . . . 30 ............ 5 facilities ............. 7 Rulings Program . . . . . . . . . 30 Definitions . . . . . . . . . . . . 29 Nonprofit educational Obligations not in Rural airports ............ 6 Waterways . . . . . . . . . . . . . 18 organizations ........... 5 registered form . . . . . . . 27 WATS service ............ 5 Policies issued by foreign

O S persons . . . . . . . . . . . . 26 ■

Obligations not in registered Sale, defined ............ 9 Ship passenger tax . . . . . . 26

Sales price: Sonar devices . . . . . . . . . 21 form . . . . . . . . . . . . . . . . 27

Bonus goods . . . . . . . . . . 20 Sport fishing equipment . . . 21

Page 48