MODIFICATION OF THE CHAIRMAN’S MARK ON THE

“HIGHWAY REAUTHORIZATION AND EXCISE TAX 

SIMPLIFICATION ACT OF 2004”

Scheduled for Markup

By the

SENATE COMMITTEE ON FINANCE

on February 2, 2004

Prepared by

the Staff of the

JOINT COMMITTEE ON TAXATION

February 2, 2004

JCX-10-04
i

CONTENTS

Page

INTRODUCTION .......................................................................................................................... 1

I. MODIFICATION TO PROVISIONS IN THE CHAIRMAN’S MARK.................................... 2

A. Extension of Highway Trust Fund and Aquatic Resources Trust Fund ............................. 2

B. Assessable Penalty for Refusal of Entry............................................................................. 2

C. Permit Ultimate Vendors to Administer Credits and Refunds of Highway Motor Fuels... 2

D. Modification of Tax on Use of Highway Vehicles............................................................. 2

E. Total Accountability ........................................................................................................... 3

F. Credit for Taxpayers Owning Commercial Power Takeoff Vehicles................................. 3

II. ADDITIONAL PROVISIONS .................................................................................................. 4

A. Provisions Relating to Fuel Fraud Prevention .................................................................... 4

1. Terminate dyed diesel use by intercity buses ................................................................. 4

2. Modify definition of off-highway vehicle ...................................................................... 5

3. Provide for transfer from Airport and Airway Trust Fund to Highway Trust Fund

 to adjust for continued highway use of aviation fuel...................................................... 7

4. Extension of temporary additional duty on ethyl alcohol (VEETC) .............................. 8

B. Excise Tax Reform and Simplification............................................................................... 8

1. Credit for auxiliary power units installed on diesel-powered trucks.............................. 8

2. Reduction in rate of tax on portable aerated bait containers........................................... 9

C. Miscellaneous ................................................................................................................... 10

1. Treasury study of highway fuels used by trucks for non-transportation purposes....... 10

2. Delta Regional Transportation Plan.............................................................................. 11

3. Treatment of employer-provided transit and van pooling benefits............................... 11

III. PROPOSALS TO REPLENISH THE GENERAL FUND..................................................... 13

A. Modification to Corporate Estimated Tax Requirements................................................. 13
1

INTRODUCTION

The Senate Committee on Finance has scheduled a markup on February 2, 2004, of the 

“Highway Reauthorization and Excise Tax Simplification Act of 2004.” A description of the 

Chairman's mark of the Highway Reauthorization and Excise Tax Simplification Act was 

published on January 29, 2004.1 This document,2 prepared by the staff of the Joint Committee 

on Taxation, provides a description of the Chairman’s Modification. This document is divided 

into three parts. The first part describes modifications to proposals included in the Chairman’s 

mark. The second part describes proposals that were not included in the Chairman’s mark. The 

third part includes revenue offset proposals not included in the Chairman’s mark.

 

1

 Joint Committee on Taxation, Description of the Chairman's Mark of the “Highway 

Reauthorization and Excise Tax Simplification Act of 2004” (JCX-5-04), January 29, 2004.

2

 This document may be cited as follows: Joint Committee on Taxation, Modification of 

the Chairman’s Mark on the “Highway Reauthorization and Excise Tax Simplification Act of 

2004” (JCX-10-04), February 2, 2004.
2

I. MODIFICATION TO PROVISIONS IN THE CHAIRMAN’S MARK

A. Extension of Highway Trust Fund and Aquatic Resources Trust Fund

The modification clarifies that the Code provisions governing the purposes for which 

monies in the Highway Account may be spent are updated to include the reauthorization bill. 

The purposes for which monies in the Aquatic Resources Trust Fund may be spent are similarly 

updated as provided by the reauthorization bill.

The modification also provides that the prohibition on the use of Highway Account 

money for rail projects does not apply to projects in existence on the date of enactment.

B. Assessable Penalty for Refusal of Entry

The modification clarifies that the assessable penalty is imposed with respect to all 

refusals to permit entries or actions authorized under section 4083(c). As under the Chairman’s 

mark, the penalty will not apply if it is shown that such refusal is due to reasonable cause.

C. Permit Ultimate Vendors to Administer Credits

and Refunds of Highway Motor Fuels

The modification provides additional requirements of ultimate vendors who file for 20-

day refunds on behalf of their customers. To qualify for 20-day refunds of highway exempt use, 

the ultimate vendor must certify that all of his claimants are registered and approved for highway 

exempt use. The ultimate vendor must register with the Secretary and, as part of his registration, 

the ultimate vendor must submit for pre-certification the highway exempt users on whose behalf 

the ultimate vendor will file claims for refunds. The submission must include the name and 

taxpayer identification number of the exempt user if such user will use the fuel on-road. 

Ultimate vendors will submit a list of their exempt users quarterly. This modification does not 

alter rules applicable to any claim for refund other than those requesting refund for exempt 

highway use within 20 days.

D. Modification of Tax on Use of Highway Vehicles

The modification requires electronic reporting for taxpayers filing excise tax returns with 

respect to 25 or more highway motor vehicles. 

Under present law, any highway motor vehicle that is issued a base plate by Canada or 

Mexico and is operated on U.S. highways is subject to the highway use tax whether or not the 

vehicles are required to be registered in the United States. The tax rate is reduced by 25 percent 

for Canadian and Mexican vehicles.3 The modification eliminates the reduced rates for Canadian 

and Mexican vehicles, so that all vehicles are taxed at the same rate.

The modification delays the requirements for display of a decal or electronic 

identification device until October 1, 2005.

 

3

 Sec. 4483(f): Treas. Reg. sec. 41.4483-7(a).
3

E. Total Accountability

The modification clarifies that the requirements of the bulk transfer exemption, as 

modified by the proposal, apply to removal of any product covered by the proposal. For 

example, under the modification, removal of a gasoline blendstock requiring further processing 

is considered removal of a taxable product and may be removed in bulk tax-free only if the 

requirements of the bulk transfer exemption are met. As a result, persons that remove such a 

product must register with the Secretary in order to qualify for a bulk transfer exemption.

The modification provides that non bulk removals from a foreign trade zone have the 

same tax and reporting requirements as products declared for export in non bulk removals at any 

other refinery or terminal. A refund is available if such a product is taxed on removal and 

exported, pursuant to present law refund provisions for exports of taxable fuel (sections 6416 and 

6427). Customs bonded storage facilities located within a foreign trade zone are subject to the 

reporting requirements of the proposal even if such facilities are not liable for tax.

F. Credit for Taxpayers Owning Commercial Power Takeoff Vehicles

The modification strikes the requirement that the Secretary of Treasury provide a method 

for exempting fuel used for power takeoff equipment.
4

II. ADDITIONAL PROVISIONS

A. Provisions Relating to Fuel Fraud Prevention

1. Terminate dyed diesel use by intercity buses

Present Law

A manufacturer’s tax of 24.4 cents per gallon applies to diesel fuel.4 Diesel fuel that is to 

be used for a nontaxable purpose will not be taxed upon removal from the terminal if it is dyed to 

indicate its nontaxable purpose. Use in an intercity bus is a nontaxable use for purposes of the 

manufacturers tax on diesel fuel. However, diesel fuel is subject to a retail backup tax. The 

retail tax is 7.4 cents per gallon for intercity buses, but only applies if no tax was imposed on the 

diesel under the manufacturers tax.5 Thus, dyed diesel removed from the terminal is exempt 

from the manufacturers tax but a tax of 7.3 cents per gallon (plus .1 for LUST) is imposed on the 

delivery of the dyed fuel into the fuel supply tank of the intercity bus. The operator of the bus is 

liable for the tax. 

Under present law, intercity bus operators also may buy fully taxed undyed diesel and 

seek a refund of the difference between the 24.4 cents per gallon rate and the 7.3 cents per gallon 

rate.

Description of Proposal

The proposal eliminates the ability of intercity buses to buy dyed diesel and self-assess 

the 7.4 cents per gallon. Under the proposal, operators of such buses must buy clear fuel and 

seek a refund of the difference between 24.4 and 7.4 cents per gallon of tax on diesel fuel. The 

proposal permits refund claimants to obtain interest if they file their refund claims electronically 

and the Secretary does not pay such claims within 20 days. The proposal also permits ultimate 

vendors to make such refund claims if the bus operator assigns its right to claim a refund to the 

ultimate vendor and the purchase of the fuel was made by credit card, including a fleet fueling 

card, under rules similar to that provided for ultimate vendor credit card purchases in the 

Chairman’s mark.

Effective Date

The proposal is effective for fuel sold after September 30, 2004.

 

4

 Sec. 4081.

5

 Sec. 4041(a)(1)(B) and sec. 4041(a)(1)(C)(III)(i).
5

2. Modify definition of off-highway vehicle

Present Law

Under present law, the definition of a “highway vehicle” affects the application of the 

retail tax on heavy vehicles, the heavy vehicle use tax, the tax on tires, and fuel taxes.6 Section 

4051 of the Code provides for a 12-percent retail sales tax on tractors and heavy trucks with a 

gross vehicle weight (“GVW”) over 33,000 pounds, and trailers with a GVW over 26,000

pounds. Section 4071 provides for a tax on highway vehicle tires that weigh more than 40 

pounds, with higher rates of tax for heavier tires. Section 4481 provides for an annual use tax on 

heavy vehicles with a GVW of 55,000 pounds or more, with higher rates of tax on heavier 

vehicles. All of these excise taxes are paid into the Highway Trust Fund.

Federal excise taxes are also levied on the motor fuels used in highway vehicles. 

Gasoline is subject to a tax of 18.4 cents per gallon, of which 18.3 cents per gallon is paid into 

the Highway Trust Fund and 0.1 cents per gallon is paid into the Leaking Underground Storage 

Tank (“LUST”) Trust Fund. Highway diesel fuel is subject to a tax of 24.4 cents per gallon, of 

which 24.3 cents per gallon is paid into the Highway Trust Fund and 0.1 cents per gallon is paid 

into the LUST Trust Fund.

The Code does not define a “highway vehicle.” For purposes of these taxes, Treasury 

regulations define a highway vehicle as any self-propelled vehicle or trailer or semitrailer 

designed to perform a function of transporting a load over the public highway, whether or not 

also designed to perform other functions. Excluded from the definition of highway vehicle are 

(1) certain specially designed mobile machinery vehicles for nontransportation functions (the 

“mobile machinery exception”); (2) certain vehicles specially designed for off-highway 

transportation for which the special design substantially limits or impairs the use of such vehicle 

to transport loads over the highway (the “off-highway transportation vehicle” exception); and (3) 

certain trailers and semi-trailers specially designed to function only as an enclosed stationary 

shelter for the performance of non-transportation functions off the public highways.7

On June 6, 2002, the Treasury Department put forth proposed regulations that would 

modify the off-highway transportation vehicle exception.8 Under the proposed regulations, a

vehicle is not treated as a highway vehicle if it is specially designed for the primary function of 

transporting a particular type of load other than over the public highway and because of this 

special design its capability to transport a load over the public highway is substantially limited or 

impaired. A vehicle’s design is determined solely on the basis of its physical characteristics. In 

determining whether substantial limitation or impairment exists, account may be taken of factors 

such as the size of the vehicle, whether it is subject to the licensing, safety, and other 

requirements applicable to highway vehicles, and whether it can transport a load at a sustained 

speed of at least 25 miles per hour. Under the proposed regulation, it is not material that a 

 

6

 Secs. 4051, 4071, 4481, 4041, and 4081.

7

 See Treas. Reg. sec. 48.4061-1(d)). 

8

 Prop. Treas. Reg. sec. 48.4051-1(a)(2)(i).
6

vehicle can transport a greater load off the public highway than it is permitted to transport over 

the public highway.

The proposed regulation provides an exception to the definition of a highway vehicle for 

nontransportation trailers and semitrailers.9 Under the proposed regulation, a trailer or 

semitrailer is not treated as a highway vehicle if it is specially designed to function only as an 

enclosed stationary shelter for the carrying on of an offhighway function at an offhighway site. 

For example, a trailer that is capable only of functioning as an office for an offhighway 

construction operation is not a highway vehicle.

Description of Proposal

The proposal adopts the definition of an offhighway transportation vehicle and a 

nontransportation trailer and semitrailer described in Proposed Treasury Regulation section 

48.4051-1(a)(2). 

For example, as provided in the proposed regulations,10 Vehicle C consists of a truck 

chassis on which an oversize body designed to transport and apply liquid agricultural chemicals 

on farms has been installed. It is capable of transporting a load over the public highway. It is 

132 inches in width, which is considerably in excess of standard highway vehicle width. For 

travel on uneven and soft terrain, it is equipped with oversize wheels with high-flotation tires, 

and nonstandard axles, brakes, and transmission. It has a special fuel and carburetor air filtration 

system that enable it to perform efficiently in an environment of dirt and dust. It is not able to 

maintain a speed of 25 miles per hour for more than one mile while fully loaded. Because 

Vehicle C is a self-propelled vehicle capable of transporting a load over the public highway, it 

would meet the general definition of a highway vehicle. However, its considerable physical 

characteristics for transporting its load other than over the public highway, when compared with 

its physical characteristics for transporting the load over the public highway, establish that it is 

specially designed for the primary function of transporting its load other than over the public 

highway. Further, the physical characteristics for transporting its load other than over the public 

highway substantially limit its capability to transport a load over the public highway. Therefore, 

Vehicle C is an offhighway vehicle and is not treated as a highway vehicle.

Effective Date

The proposal generally is effective after the date of enactment. As to the fuel taxes, the 

proposal is effective for taxable years beginning after the date of enactment.

 

9

 Prop. Treas. Reg. sec. 48.4051-1(a)(2)(ii).

10 Prop. Treas. Reg. sec. 48.4051-1(c), Example (3).
7

3. Provide for transfer from Airport and Airway Trust Fund to Highway Trust Fund to 

adjust for continued highway use of aviation fuel

Present Law

Aviation fuel is kerosene and any liquid (other than any product taxable under section 

4081) that is suitable for use as a fuel in an aircraft.11 In general, the rate of tax on aviation fuel 

is 21.9 cents per gallon.12 Aviation fuel sold for use or used in commercial aviation is taxed at a 

reduced rate of 4.4 cents per gallon.13 Certain sales of aviation fuel are exempt from tax.14

Taxes received for aviation fuel, except for the LUST Trust Fund financing rate, are 

appropriated to the Airport and Airway Trust Fund.15 Such appropriation occurs even if aviation 

fuel is used for non aviation purposes.

Taxes received on taxable fuel for transportation purposes generally are appropriated to 

the Highway Trust Fund.16

Description of Proposal

The proposal directs the Secretary to transfer from the Airport and Airway Trust Fund to 

the Highway Trust Fund annually an amount attributable to fuel that is used primarily for 

highway transportation purposes even though the fuel is taxed as if it were to be used for aviation 

purposes. The annual amount is to be allocated between the Highway Account and the Mass 

Transit Account, with 89 percent of the amount going to the Highway Account and 11 percent of 

the amount going to the Mass Transit Account. The total amount of the transfer for Fiscal Year 

2005 is $395 million; the amount for Fiscal Year 2006 is $425 million; the amount for Fiscal 

 

11 Sec. 4093(a).

12 Sec. 4091(b). This rate includes a 0.1 cent per gallon Leaking Underground Storage 

Tank (“LUST”) Trust Fund tax. The LUST Trust Fund tax is set to expire after March 31, 2005, 

with the result that on April 1, 2005, the tax rate is scheduled to be 21.8 cents per gallon. Secs. 

4091(b)(3)(B) & 4081(d)(3). Beginning on October 1, 2007, the rate of tax is reduced to 4.3 

cents per gallon. Sec. 4091(b)(3)(A).

13 Sec. 4092(b). The 4.4 cent rate includes 0.1 cent per gallon that is attributable to the 

LUST Trust Fund financing rate. A full exemption, discussed below, applies to aviation fuel that 

is sold for use in commercial aviation as fuel supplies for vessels or aircraft, which includes use 

by certain foreign air carriers and for the international flights of domestic carriers. Secs. 4092(a), 

4092(b), & 4221(d)(3).

14 Sec. 4092.

15 Sec. 9502(b).

16 Sec. 9503(b).
8

Year 2007 is $429 million; the amount for Fiscal Year 2008 is $432 million; and the amount for 

Fiscal Year 2009 is $435 million.

Effective Date

The proposal is effective on October 1, 2004.

4. Extension of temporary additional duty on ethyl alcohol (VEETC)

Present Law

Heading 9901.00.50 of the Harmonized Tariff Schedule of the United States (HTSUS) 

imposes a cumulative general duty of 14.27 cents per liter, in addition to any other duty 

applicable under the HTSUS, to imports of ethyl alcohol, or any mixture containing ethyl 

alcohol, if used as a fuel or in producing a mixture to be used as a fuel, that are entered into the 

United States prior to October 1, 2007. The temporary additional duty under Heading 

9901.00.50 offsets the alcohol fuels credit of 52 cents per gallon that is available to taxpayers 

that blend ethanol with gasoline; both domestic and imported ethanol is eligible for the alcohol 

fuels credit.

Description of Proposal 

The proposal extends the cumulative general duty of 14.27 cents per liter, in addition to 

any other duty applicable under the HTSUS, to imports of ethyl alcohol, or any mixture 

containing ethyl alcohol, if used as a fuel or in producing a mixture to be used as a fuel, that are 

entered into the United States prior to January 1, 2011. The proposal corresponds to the 

extension of the alcohol fuels credit through December 31, 2010, that is included in the 

Chairman’s mark. The proposal is intended to maintain the status quo with respect to ethanol 

imports.

Effective Date

The proposed extension of the temporary additional duty on ethyl alcohol would become 

effective on the date of enactment.

B. Excise Tax Reform and Simplification

1. Credit for auxiliary power units installed on diesel-powered trucks

Present Law

A 12-percent excise tax is imposed on the first retail sale of heavy highway vehicles, 

tractors, and trailers (generally, trucks having a gross vehicle weight in excess of 33,000 pounds 

and trailers having such a weight in excess of 26,000 pounds).
9

Description of Proposal

The proposal creates a tax credit for the purchase of certain auxiliary power units and 

installation on a heavy-duty highway vehicle. The taxpayer may claim a credit of $250 against 

his or her income tax liability. A qualifying auxiliary power unit is an integrated system that 

provides heat, air conditioning, engine warming, and electricity to the factory installed 

components on a heavy-duty vehicle as if the main drive engine of the vehicle were running. A 

qualifying auxiliary power unit is a unit employed to reduce long-term idling of the diesel engine 

on heavy-duty vehicles and a qualifying unit must be certified by the Administrator of the 

Environmental Protection Agency as meeting emissions standards in regulations as in effect on 

the date of enactment. A heavy-duty highway vehicle is any highway vehicle weighing more 

than 12,500 pounds and powered by a diesel engine.

The credit expires after 2006.

Effective Date

The proposal is effective for vehicles with auxiliary power units purchased and installed 

for taxable years beginning after the date of enactment.

2. Reduction in rate of tax on portable aerated bait containers

Present Law

In general, the Code imposes a 10 percent tax on the sale by the manufacturer, producer, 

or importer of specified sport fishing equipment, including portable bait containers.17 Parts or 

accessories that are sold on or in connection with taxable articles are also treated as taxable.18 

The Internal Revenue Service has ruled that aeration systems designed to keep fish and marine 

life alive are taxable parts or accessories when sold on or in connection with portable bait 

containers.19 Fish tank aerators, however, are not taxable.20

Revenues from the excise tax on sport fishing equipment are deposited in the Sport 

Fishing Account of the Aquatic Resources Trust Fund. Monies in the fund are spent, subject to 

an existing permanent appropriation, to support Federal-State sport fish enhancement and safety 

programs.

 

17 Secs. 4161(a)(1); 4162(a)(6)(E). A three percent rate, however, applies to the sale of 

electric outboard motors and sonar devices suitable for finding fish. Sec. 4161(a)(2)(A).

18 Sec. 4161(a)(3).

19

 See Private Ruling (IRS National Office Technical Advice Memorandum) 200022011 

(Feb. 23, 2000).

20 Rev. Rul. 85-150, 1985-2 C.B. 260.
10

Description of Proposal

The proposal reduces the excise tax on portable aerated bait containers to three percent.

Effective Date

The proposal is effective for articles sold by the manufacturer, producer, or importer on 

and after October 1, 2004.

C. Miscellaneous

1. Treasury study of highway fuels used by trucks for non-transportation purposes

Present Law

Fuel used in vehicles carrying equipment that is unrelated to the transportation function 

of the vehicle is subject to the Highway Trust Fund excise taxes without regard to whether the 

fuel is used for transportation or the unrelated equipment. An exception exempts from tax fuel 

used by non-transportation equipment if the fuel is used by a separate motor, if the vehicle owner 

can allocate fuel used in a manner acceptable to the IRS.

Description of Proposal

The proposal directs the Secretary of the Treasury to study the use of highway motor fuel 

by trucks that is not used for the propulsion of the vehicle. In particular, in the case of vehicles 

carrying equipment that is unrelated to the transportation function of the vehicle, the proposal 

directs the Secretary of the Treasury, in consultation with the Department of Transportation, and 

with public notice and comment to study and report to Congress its determination of the average 

annual amount of tax paid fuel consumed per vehicle, by type of vehicle, used by the propulsion 

engine to provide the power to operate the equipment attached to the highway vehicle. The 

Secretary will review the technical and administrative feasibility of exempting such nonpropulsive use of highway fuels for the highway motor fuels excise taxes. 

In the case where non-transportation equipment is run by a separate motor, the Secretary 

is to report the annual average amount of fuel exempted from tax in the use of such equipment by 

equipment type. The Secretary will review issues of administration and compliance related to 

the present-law exemption provided for such fuel use. 

In addition, the Secretary is to report his estimates of the amount of taxable fuel 

consumed by trucks due to the long-term idling of diesel engines. The Secretary will report his 

findings to the House Committee on Ways and Means and the Senate Committee on Finance not 

later than January 1, 2006.

Effective Date

The proposal is effective upon the date of enactment.
11

2. Delta Regional Transportation Plan

Present Law

The Delta Regional Authority is a Federal-State partnership, serving a 240-county/parish 

area in an eight-State region.21 No State is required to participate with the authority. The duties 

of the authority are to: (1) produce a regional development plan; (2) set priorities for approval of 

grants in the region; (3) assess the region’s needs and assets; (4) inform participating States 

about interstate cooperation; (5) work with States and local agencies to develop model 

legislation; (6) enhance the capacity of and support Local Development Districts, as well as the 

creation of Local Development Districts where none currently exist; (7) encourage private 

investment in economic development projects in the region; and (8) assist State governments 

with the States’ economic development program.

Description of Proposal

The proposal directs the Delta Regional Authority to conduct a comprehensive study of 

transportation assets and needs in the eight states comprising the Delta region (Alabama, 

Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and Tennessee). Upon 

completion of the study, the Delta Regional Authority is to create a regional strategic plan to 

achieve efficient transportation systems in the Delta region. 

The study and plan is to include but is not limited to the following transportation modes 

and systems: transit, rail, highway, interstate, bridges, air, airports, waterways and ports. The 

Delta Regional Authority is to work with local planning and development districts, local and 

regional governments, metropolitan planning organizations, State transportation entities, and 

Federal transportation agencies to develop a regional strategic transportation plan.

The proposal authorizes the Delta Regional Authority to receive $1,000,000 to conduct a 

comprehensive study and plan. These funds are to remain available until spent.

Effective Date

The proposal is effective on the date of enactment

3. Treatment of employer-provided transit and van pooling benefits

Present Law

Under present law, qualified transportation benefits are excludable from gross income 

and wages for employment tax purposes. Qualified transportation benefits are: (1) transportation 

in a commuter highway vehicle if such transportation is in connection with travel between the 

 

21 The covered States and counties are: Alabama - 20 counties; Arkansas - 42 counties; 

Illinois, 16 counties; Kentucky - 21 counties; Louisiana - 46 parishes; Mississippi - 45 counties; 

Missouri - 29 counties; and Tennessee - 21 counties. Delta Regional Authority, Legislative 

Matters and Overview, (February 1, 2004)< www.dra.gov/legislation.php >.
12

employee’s residence and place of employment (“van pooling”); (2) transit passes; and (3) 

qualified parking. For purposes of the exclusion for van pooling benefits, a commuter highway 

vehicle is any highway vehicle: (1) the seating capacity of which is at least six adults (excluding 

the driver); and (2) at least 80 percent of the mileage use of which can reasonably be expected to 

be (a) for purposes of transporting employees in connection with travel between their residences 

and their place of employment and (b) on trips during which the number of employees 

transported for such purposes is at least one-half of the adult seating capacity of such vehicle (not 

including the driver). 

The maximum amount of qualified parking that is excludable from income and wages is 

$195 per month (for 2004). The maximum amount of transit passes and van pooling benefits 

that are excludable from income and wages per month is $100 (for 2004). These dollar amounts 

are indexed for inflation.

Description of Proposal

Under the proposal, the maximum dollar amount of excludable van pooling and transit 

benefits would be increased to $120 per year. This dollar amount would be indexed for inflation.

Effective Date

The proposal would be effective for taxable years beginning after December 31, 2004.
13

III. PROPOSALS TO REPLENISH THE GENERAL FUND

A. Modification to Corporate Estimated Tax Requirements

Present Law

In general, corporations are required to make quarterly estimated tax payments of their 

income tax liability (section 6655). For a corporation whose taxable year is a calendar year, 

these estimated tax payments must be made by April 15, June 15, September 15, and December 

15. 

Description of Proposal

The proposal requires that corporate estimated tax payments due on or after July 1, 2009, 

and before October 1, 2009, be increased to 119 percent of the otherwise required amount. 

Effective Date

The proposal is effective on the date of enactment.