I

103D CONGRESS

2D SESSION H. R. 4588

To amend the Internal Revenue Code of 1986 to consolidate the retail

level and refinery level taxes on aviation gasoline by imposing the entire

tax at the refinery level.

IN THE HOUSE OF REPRESENTATIVES

JUNE 16, 1994

Mr. HANCOCK (for himself, Mr. BREWSTER, Mr. ARCHER, Mr. MINETA, Mr.

OBERSTAR, Mr. CLINGER, Mr. CARR of Michigan, Mr. HERGER, Mr.

PARKER, Mr. LIGHTFOOT, Mr. PETE GEREN of Texas, Mr. INHOFE, Mr.

MINGE, Mr. PETRI, Mr. SANGMEISTER, Mr. LEWIS of Florida, Mr.

COSTELLO, Mr. YOUNG of Alaska, Mr. BALLENGER, Mr. GENE GREEN

of Texas, Mr. ZELIFF, Mr. VALENTINE, Mr. SENSENBRENNER, and Mr.

DEFAZIO) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to consolidate

the retail level and refinery level taxes on aviation gasoline by imposing the entire tax at the refinery level.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. CONSOLIDATION OF TAXES ON AVIATION GASO4 LINE.

5 (a) IN GENERAL.—Subparagraph (A) of section

6 4081(a)(2) of the Internal Revenue Code of 1986 (relating
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1 to imposition of tax on gasoline and diesel fuel) is amend2 ed by redesignating clause (ii) as clause (iii) and by strik3 ing clause (i) and inserting the following:

4 ‘‘(i) in the case of gasoline other than

5 aviation gasoline, 18.3 cents per gallon,

6 ‘‘(ii) in the case of aviation gasoline,

7 19.3 cents per gallon, and’’.

8 (b) TERMINATION.—Subsection (d) of section 4081

9 of such Code is amended by redesignating paragraph (2)

10 as paragraph (3) and by inserting after paragraph (1) the

11 following new paragraph:

12 ‘‘(2) AVIATION GASOLINE.—On and after Janu13 ary 1, 1996, the rate specified in subsection

14 (a)(2)(A)(ii) shall be 4.3 cents per gallon.’’

15 (c) REPEAL OF RETAIL LEVEL TAX.—

16 (1) Subsection (c) of section 4041 of such Code

17 is amended by striking paragraphs (2) and (3) and

18 by redesignating paragraphs (4) and (5) as para19 graphs (2) and (3), respectively.

20 (2) Paragraph (3) of section 4041(c) of such

21 Code, as redesignated by paragraph (1), is amended

22 by striking ‘‘paragraphs (1) and (2)’’ and inserting

23 ‘‘paragraph (1)’’.

24 (d) CONFORMING AMENDMENTS.—
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1 (1) Paragraph (1) of section 4041(k) of such

2 Code is amended by adding ‘‘and’’ at the end of sub3 paragraph (A), by striking ‘‘, and’’ at the end of

4 subparagraph (B) and inserting a period, and by

5 striking subparagraph (C).

6 (2) Paragraph (1) of section 4081(d) of such

7 Code is amended by striking ‘‘each rate of tax speci8 fied in subsection (a)(2)(A)’’ and inserting ‘‘the

9 rates of tax specified in clauses (i) and (iii) of sub10 section (a)(2)(A)’’.

11 (3) Sections 6421(f)(2)(A) and 9502(f)(1)(A)

12 of such Code are each amended by striking ‘‘section

13 4041(c)(4)’’ and inserting ‘‘section 4041(c)(2)’’.

14 (4) Paragraph (2) of section 9502(b) of such

15 Code is amended by striking ‘‘14 cents’’ and insert16 ing ‘‘15 cents’’.

17 (e) EFFECTIVE DATE.—The amendments made by

18 this section shall take effect on October 1, 1994.

19 (f) FLOOR STOCKS TAX.—

20 (1) IMPOSITION OF TAX.—In the case of avia21 tion gasoline on which tax was imposed under sec22 tion 4081 of such Code before October 1, 1994, and

23 which is held on such date by any person, there is

24 hereby imposed a floor stocks tax of 1 cent per gal25 lon of such gasoline.
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1 (2) LIABILITY FOR TAX AND METHOD OF PAY2 MENT.—

3 (A) LIABILITY FOR TAX.—A person hold4 ing aviation gasoline on October 1, 1994, to

5 which the tax imposed by paragraph (1) applies

6 shall be liable for such tax.

7 (B) METHOD OF PAYMENT.—The tax im8 posed by paragraph (1) shall be paid in such

9 manner as the Secretary shall prescribe.

10 (C) TIME FOR PAYMENT.—The tax im11 posed by paragraph (1) shall be paid on or be12 fore March 31, 1995.

13 (3) DEFINITIONS.—For purposes of this sub14 section:

15 (A) HELD BY A PERSON.—Gasoline shall

16 be considered as ‘‘held by a person’’ if title

17 thereto has passed to such person (whether or

18 not delivery to the person has been made).

19 (B) SECRETARY.—The term ‘Secretary’

20 means the Secretary of the Treasury or his del21 egate.

22 (4) EXCEPTION FOR EXEMPT USES.—The tax

23 imposed by paragraph (1) shall not apply to gasoline

24 held by any person exclusively for any use to the ex-
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1 tent a credit or refund of the tax imposed by section

2 4081 of such Code is allowable for such use.

3 (5) EXCEPTION FOR FUEL HELD IN AIRCRAFT

4 TANK.—No tax shall be imposed by paragraph (1)

5 on aviation gasoline held in the tank of an aircraft.

6 (6) EXCEPTION FOR CERTAIN AMOUNTS OF

7 FUEL.—

8 (A) IN GENERAL.—No tax shall be im9 posed by paragraph (1) on aviation gasoline

10 held on October 1, 1994, by any person if the

11 aggregate amount of aviation gasoline held by

12 such person on such date does not exceed 6,000

13 gallons. The preceding sentence shall apply only

14 if such person submits to the Secretary (at the

15 time and in the manner required by the Sec16 retary) such information as the Secretary shall

17 require for purposes of this paragraph.

18 (B) EXEMPT FUEL.—For purposes of sub19 paragraph (A), there shall not be taken into ac20 count fuel held by any person which is exempt

21 from the tax imposed by paragraph (1) by rea22 son of paragraph (4) or (5).

23 (C) CONTROLLED GROUPS.—

24 (i) CORPORATIONS.—In the case of a

25 controlled group, the 6,000 gallon amount
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1 in subparagraph (A) shall be apportioned

2 among the component members of such

3 group in such manner as the Secretary

4 shall by regulations prescribe. For pur5 poses of the preceding sentence, the term

6 ‘‘controlled group’’ has the meaning given

7 to such term by subsection (a) of section

8 1563 of such Code; except that for such

9 purposes the phrase ‘‘more than 50 per10 cent’’ shall be substituted for the phrase

11 ‘‘at least 80 percent’’ each place it appears

12 in such subsection.

13 (ii) NONINCORPORATED PERSONS

14 UNDER COMMON CONTROL.—Under regula15 tions prescribed by the Secretary, prin16 ciples similar to the principles of clause (i)

17 shall apply to a group under common con18 trol where 1 or more of the members is not

19 a corporation.

20 (7) OTHER LAWS APPLICABLE.—All provisions

21 of law, including penalties, applicable with respect to

22 the taxes imposed by section 4081 of such Code

23 shall, insofar as applicable and not inconsistent with

24 the provisions of this subsection, apply with respect

25 to the floor stock taxes imposed by paragraph (1) to
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1 the same extent as if such taxes were imposed by

2 such section 4081.

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