rom 4136

Department of the Treasury
Internal Revenue Service

Computation of Credit for Federal Tax on
Gasoline, Special Fuels, and Lubricating Oil

® Attach this form to your income tax return.

| 1980

Name (as shown on your income tax return)

Social security or employer identification number

Gasoline, Diesel Fuel
and Special Motor Fuels

Lubricating Oil

Type of Business Use

Number of

‘Multiply Column

‘Number of

Multiply Coll
Gallons Rate of ultiply Column
Used Column (E)
)

1 Nonhighway:
a Farm (for farming purposes)

b Commercial fishing vessel (See
instructions C.4. and D.2.(c)):
(i) Gasoline

(ii) Diesel fuel or special fuels.

c¢ Other (specify)
2 Intercity, local, and school buses
(See instruction C.3.)
3 Gasoline/alcohol mixture . . .
4 Aircraft. © 6 2 6 ee ee

caters PT | cola cay
WZ LN UTE: Ve
a
02
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—

an

©
YY,

06

ZZ

06

06

Cilla WV

5 Totals . Y Vi $
Part Ill Aviation Fuels
Fuels. Other Than Gasoline Multiply Column
Gasolit Rate of
‘Type of Business Use et Number of Gallons Used Tax (A) oF (8)

Nulsbor Bt Gallons Used
Aw

(8)

Column (C)
© ©)

6 a Farm (for farming purposes) . WU|]TTMMMMMA
(Aerial applicators see instruc- |Y
tion C.1.) a 04 }.
07
b Aviation (applies only to com: _ 04 ih
viati . y, =|
rcial use as defined in in- iz . H
struction D.2.(@)) « . WMH 07 |
7 Total... - : _|$ _
8 Total income tax credit claimed, cr the 5, columns © and © and The 7. column D) (Se instruction BD. _!$ i
* Tax Rate (per gallon used)
Type of Use (aaevtati Diesel Fuel and Special Motor Fuel Aviation Fuel

(Nonaviation
Use)

Farm (farming purposes)

A or 4¢ whichever paid

4¢ or 7¢ TL. paid

Other

or 4¢ whichever pai

= MMM

Aviation (applies only to commercial use as defined

in instruction D.2.(d))

4¢ or 7¢ whichever paid

Instructions

(Section references are to the Internal
Revenue Code unless otherwise specified)

At the time we printed this form, Congress
was considering proposals that could change
the credit computation for some of the items
listed on the form. If the proposals become law
and apply to 1980, they must be considered in
figuring your credit for 1980. We will use news
media and other means available to provide you
with information and instructions on any
changes.

New Law.—Line 3

Beginning January 1, 1979, a taxpayer who mixed
alcohol with gasoline on which the 4-cents-a-gallon
Federal excise tax has been imposed is eligible for
a credit or refund of the gasoline tax. The alcohol
must have been made from other than petroleum,

natural gas, or coal. The mixture must have in-
cluded at least 10% of 190 proof alcohol and must
have been sold or used in the taxpayer's trade or
business.

Gasoline used in the mixture from January 1,
1979, through April 1, 1980, is considered sold or
used on April 2, 1980, for purposes of claiming a
refund or credit.

Form 843 for Quarterly Tax Refund.—You may
want to file a claim for a tax refund instead of a
credit. To do so you must be able to claim at least
$1,000 ($200 for gasoline/alcohol mixture) a quar-
ter for any fuel category or lubricating oil. Use Form
843, Claim, for filing. File for any of the first
three quarters of your tax year before the end of
the next quarter. Show separate computations for a
claim on gasoline, special fuels, and lubricating
oils. Don’t include gasoline or special fuels used on
a farm for farming purposes. You may claim a credit
only, not a refund, for tax paid on such fuel.

You may use a 4136 as a worksheet to show
your computations, and attach it to your Form 843.

Don’t include on Form 4136 the credit you claiin
‘on Form 843 for any of the first three quarters of
your tax year.

A. Purpose of Form 4136.—You must
file this form if you claim credit for Fed-
eral excise tax on certain kinds of fuel.
These include gasoline, special fuels, and
lubricating oil as defined in instructions C,
D, and E.

An individual, estate, trust, or corpora-
tion may file this form, but a partnership
may not. However, when a partnership files
Form 1065, U.S. Partnership Return of In-
come, it must include a statement show-
ing:

‘© How many gallons of the fuels are al-

located to each partner.

(Continued on back)

313-168-1


e qhe types of use, as shown in this

form.

B. Year to Include the Credit Resulting
from Business Use of Fuel or Oil.—When
you claim a credit or refund, you must in-
clude it in your gross income to the extent
it resulted in a reduction of your income
tax. The year in which you include it de-
pends upon your method of accounting.

1. Cash Method.—lf you use the cash
method, include the amount of credit in
gross income for the tax year in which
you file the tax return that claims the
credit. If you file an amended return, or if
you file a claim for credit or refund (and
claim the credit for the tax), include the
refund that results from the credit in your
gross income for the tax year you receive
it.

2. Accrual Method.—lIf you use the ac-
crual method, figure the amount of the
credit or refund due at the close of your
tax year. Include it in income, even if you
have not filed a claim for refund,

C. What Gasoline to Include.—You may
claim credit for Federal excise tax on gaso-
line for farm uses, business nonhighway
uses, intercity, local, and school bus uses,
commercial fishing vessel uses, and for
mixing with alcohol.

1. Farm Use.—You may claim a credit
for gasoline used for farming on a trade or
business farm in the United States. Such
farms include the following:

@ Stock, dairy, poultry, fur-bearing ani-

mal, and truck farms.

© Plantations, ranches,

ranges, and greenhouses.

@ Orchards.

Gasoline is considered used for farming
only if the owner, tenant, or operator of
the farm uses the gasoline. If gasoline is
used for the farming tasks set forth below
by anyone else, the owner, tenant, or opera-
tor is considered the user of the gasoline,
There is an exception to this rule. An aerial
applicator is considered to have used gaso-
line for farming when performing the farm-
ing tasks under the following conditions:

@ The applicator is the ultimate pur-

chaser of the gasoline; and

The farm owner, tenant, or operator
agrees not.to be treated as the user
and ultimat@- purchaser of the gaso-
ine.

are following tasks are considered farm-

nurseries,

ea) Cultivating the soil, and raising or
harvesting any horticultural or agri-
cultural commodity. This includes
raising livestock, bees, poultry, fur-
bearing animals, and wildlife.

Handling, drying, packing, grading,
or storing any horticultural or agri-
cultural commodity before manufac-
ture. This occurs only if the owner,
tenant, or operator produced more
than half of the commodity treated.

(c) Planting, cultivating, or cutting trees,
or preparing them for market. This
does not include milling the lumber.

(d) Operating, managin; conserving,
improving, or maintaining the farm
and its tools and equipment.

Gasoline is not considered used for
farming under the following conditions:

(a) It is used off the farm to transport

livestock, feed, crops, or equipment.

(b) It is used in processing, packaging,
freezing, or canning operations.

(c) It is used for personal purposes.

(d) It is used on the farm of another
person, even though used for farm-
ing.

Often a vehicle will be used on the farm
both for farming and for nonfarming pur-
poses. In these cases, show the number of
gallons of gasoline used for each purpose
when claiming credit.

(b)

2. Business Nonhighway Uses.—You
may claim a credit for gasoline used for
business nonhighway purposes. Business
nonhighway use does not include gasoline
used in a motorboat or in a highway vehi-
cle that either:

© Is registered or required to be regis-

tered for highway use under the laws
of any State, the District of Columbia,
or foreign country; 1

@ Is owned by the United States and is

used on the highway.

3. Intercity, Local, or School Bus
Uses.—lf you are the ultimate purchaser
of gasoline for a bus that provides trans-
portation (1) to the general public for a
fee or (2) to students and school employ-
ees, you may claim a credit for the excise
tax you paid on gasoline used for this
service.

If you provide transportation on inter-
city and local buses on non-scheduled ir-
regular routes, you may take the credit
only if the seating capacity of the bus is at
least 20 adults, not including the driver.

4. Commercial Fishing Vessel Use.—
You may claim a credit for excise tax paid
on gasoline used in a commercial fishing
vessel in the amount of 2 cents a gallon. A
commercial fishing vessel is one used in
the fisheries or whaling business and used:

Exclusively for catching shrimp and

other types of aquatic life for sale
commercially as bait, or

© On specific trips exclusively for catch-

ing fish to be sold commercially.

5. Gasoline/alcohol Mixture.—You may
claim a credit for excise tax paid on gaso-
line mixed with alcohol. The alcoho! must
have been made from other than petro-
leum, natural gas, or coal. The mixture
must have included at least 10% of 190
proof alcohol and must have been sold or
used in your trade or business.

D. What Special Fuels to Include.—

1. Definitions of Special Fuels.—

(a) Diesel Fuel.—This fuel is a liquid
that is:

(1) Sold for use in a diesel-powered

highway vehicle; or

(2) Used for fuel in such a highway vehi-
cle. (This use is not taxable if there
was a taxable sale of the fuel under
(1) above.) The use of diesel fuel is
not taxable if it is taxable as gaso-
line under section 4081.

(b) Special Motor Fuels.—These fuels
include benzol, benzene, naphtha, lique-
fied petroleum gas, casinghead and natu-
ral gasoline and other liquid, except kero-
sene, gas oil, fuel oil, diesel fuel, or any
product taxable under section 4081. Spe-
cial motor fuels must be:

(1) Sold for use as a fuel in a motor ve-

hicle or motorboat; or

(2) Used for fuel in a motor vehicle or
motorboat. (This use is not taxable
if there was a taxable sale of the
fuel under (1) above.)

(c) Noncommercial Aviation Fuel.—
This is any fuel, such as jet fuel, that is
not taxable under section 4081 but that is
taxable at 7 cents a gallon. This fuel also
includes gasoline that is taxable under sec-
tion 4081 and that is taxed at an additional
3 cents a gallon. The liquid or gasoline
must be:

(1) Sold for use as fuel in an aircraft
that is not used in commercial avia-
tion; or

(2) Used for fuel in such an aircraft.
(This use is not taxable if there was
a taxable sale of the fuel under (1)
above.)

2. Uses of Special Fuels.—

(a) Farm Use.—You may claim credit

for Federal excise tax on fuels as defined

‘fy US, GOVERNMENT PRINTING OFFICE : 1980—O-813-168

in D.1. See instruction C.1. for require-
ments for “farm use.”

(b) Intercity, Local, and School Bus
Uses.—You may claim credit for Federal
excise tax on fuels as defined in D.1. See
instruction C.3. for intercity, local, and
school bus requirements.

(c) Commercial Fishing Vessel Use—
You may claim a credit for Federal excise
tax on fuels as defined in D.1. of 2¢ or 4¢,
whichever paid, that were used in vessels
while employed in the fisheries or whaling
business. See instruction C.4.

(d) Commercial Aviation Use.—You may
claim credit for Federal excise taxes on
noncommercial aviation fuels as defined
in D.1.(c) used in commercial aviation. For
this purpose commercial aviation is the use
of an aircraft in a business of carrying
people or property by air for pay. It re-
quires reporting the excise tax on Form
720, Quarterly Federal Excise Tax Return.
The use of an aircraft may be considered
noncommercial aviation if the aircraft:

(1) Has a maximum certificated takeoff
weight of 6,000 pounds or less and
is not operated on an established
line; or

(2) Is owned or leased by a member of
an affiliated group and is not avail-
able for hire to nonmembers.

(e) Nontaxable Uses.—

(1) Diesel and Special Motor Fuel.—
These fuels (defined in D.1.) may qualify
for a credit in any of the following cases:

@ You resold the fuel.

e You used the fuel for a nontaxable

purpose.

© You used the fuel for a purpose that

was not the one you bought it for.
This other purpose must make a
lower tax rate apply. If any of these
three conditions exist, claim as credit
the figure you get by subtracting (a)
the tax that applies to the actual use
of the fuel, from (b) the tax imposed
by section 4041 on the fuel sold to
you.

E. What Lubricating Oil to Include.—
You may claim an income tax credit for lu-
bricating oil that is used in qualified busi-
ness use, in a qualified bus, or in a com-
mercial fishing vessel. You may include:

© Oil to lubricate plant machinery.

© Oil to lubricate vehicles such as air-

craft, bulldozers, buses, power shov-
els, and farm tractors.

You may not include:
Cutting oils.
Used oil.

Oil used in a highway motor vehicle,
such as a truck, if used for other than
business nonhighway use. See in-
struction C.2.

Oil sold free of the Federal excise tax
on lubricating oil. Such oil includes
transformer or insulating oil, some
motor fuel additives, crude neat’s-
foot oil, castor oil, and oils purchased
excise-tax-free by use of an exemp-
tion certificate.

F. What Fuels Not to Include.—Do not
include gasoline lost or destroyed through
spillage, accident, or shrinkage. Such gaso-
line is not considered to be used and there-
fore does not qualify for credit or refund.

G. Additional Information.—Publication
225, Farmer’s Tax Guide, and Publication
378, Fuel Tax Credits—Nonhighway Bu:
ness Equipment, Aircraft, Buses, and Taxi-
cabs, are available from the Internal Reve-
nue Service.

313-168-1