Computation of Credit for Federal Tax |_OMB No. 1845-0162
Form 41 3 6 on Gasoline and Special Fuels 1 9 86
Department of the Treasury (And Credit for Purchase of Qualified Diesel-Powered Highway Vehicles) ‘Attachment
Internal Revenue Service (0) P Attach this form to your income tax return. Sequence No. 26
Name (as shown on your income tax return) ‘Social security or employer identification number
Gasoline and Gasohol, Diesel Fuel, and Other Special Motor Fuels
Type of Use (a) Number of (b) Rate (c) Multiply Column (a) by
Gallons Used of Tax Column (b) (except line 1)
1 Qualified diesel-powered highway vehicles (See instructions below.) . $
2  Nonhighway:
a Farm for farming | Purposes) (Ground applicators of agricultural Y}
(i) Gasoline, gasoline/alcohol mixture. ,03/.0333/.09" Lf My
(ii) Diesel fuel, diesel/alcohol mixture . .09/.15*  |$
(iii) Special fuels, special fuels/alcohol mixture. -03/.045/.09%
b Commercial fishing vessel (See instructions.):
(i) Gasoline, gasoline/alcohol mixture. -03/.0333/.09* Uf
(ii) Diesel fuel, diesel/alcohol mixture . .09/.15* $
(iii) Special fuels, special fuels/alcohol mixture .03/.045/.09*
c Off-highway business (specify) -. WY,
(i) Gasoline, gasoline/alcohol mixture. .03/.0333/.09* /
(ii) Diesel fuel, diesel/alcohol mixture .09/.15* $
(iii) Special fuels, special fuels/alcohol mixture .03/.045/.09*
3a Intercity, local, and school buses (See instructions.) . ,03/.0333/.09/.12* Mh
b Qualified local and school buses (See instructions.) . 15 $
4 Gasoline/alcohol mixture (gasohol) . 0566 $
5a Qualified methanol and ethanol . -06/.09* MW ij
b Diesel/alcohol mixture .06 $
¢ Special fuels/alcohol mixture . 06
6 Qualified taxicab 04 $
Aviation Fuel: Yh
7 Farm (for farming purposes) (Aerial applicators of agricultural substances, see instructions.) 03/.09/.12/.14* |$
8 Aviation (Applies only to commercial or certain helicopter uses as defined in instructions.) -03/.09/.12/.14* |$
9 Total income tax credit claimed (add lines 1 through 8). Enter here and on Form 1040, line 61; Form 1120, line
32f; Form 1120-A, line 28f; Form 1120S, line 26b; Form 1041, line 33b; or the proper line of other returns _.

* Use rate paid or allowable rate if less.

Instructions

(Section references are to the Internal Revenue
Code.)
Paperwork Reduction Act Notice. —We ask for
this information to carry out the Internal Revenue
laws of the United States. We need it to ensure
that taxpayers are complying with these laws and
to allow us to figure and collect the right amount
of tax. You are required to give us this information.
Purpose of Form.—File this form if you claim
credit for Federal excise tax on gasoline and
gasohol,desel fue, and other special fuels used
for certain types of business uses or the credit for
diesel-powered highway vehicles.

Figure the credit by multiplying the number of
gallons used by the rate of Federal excise tax paid
or the allowable rate if less.

An individual, estate, trust, or corporation may
file this form, but a partnership may not.
However, a partnership must attach to Form
1065, U.S. Partnership Return of Income, a
statement showing how many gallons of the fuels
are allocated to each partner, the types of use,
and the applicable tax rate as shown on this form.
Refund Instead of Credit.—If you paid excise
tax of at least $1,000 ($200 for gasoline/alcohol
mixture and $50 for gasoline, diesel fuel, or
special fuels used in a qualified taxicab) on
gasoline for nonhighway use (including use for
commercial fishing vessels) and intercity, local,
or school bus use in any one of the first three
quarters of the tax year, you may file for a refund
of the tax instead of a credit on Form 4136.

If you paid excise tax of at least $1,000
(include in the $1,000 the credit for purchase of
a qualified diesel-powered highway vehicle) on
special fuels for a nontaxable use, intercity, local
or schoo! bus use (including a qualified local bus),
certain aircraft museums use, and certain
helicopter use in any one of the first three
quarters of the tax year, you may file for a refund.

To claim the refund, file Form 843, Claim,
before the end of the quarter following the one for
which you are claiming the refund. Show separate
computations for a claim on gasoline, special
fuels, and alcohol mixtures. You may use Form
4136 as a worksheet to show your computations
and attach it to the Form 843 you file.

You must claim a credit, rather than a refund,
for any tax paid during the fourth quarter, and for
any tax under $1,000 ($200 for gasoline/alcohol
mixture and $50 for gasoline, diesel fuel, or
special fuels used in a qualified taxicab) for any
fuel used in the first three quarters. You must
also claim the credit rather than a refund, for tax
paid on gasoline, special fuels, or alcohol
mixtures used on a farm for farming purposes.

Do not claim a credit on Form 4136 for any
amount that you previously claimed as a refund.
Year To Include the Credit or Refund in
Income.—When you claim a credit or refund,
you must include it in your gross income to the
extent that it reduced your income tax. The year
you include it depends on your method of
accounting. This rule does not apply to the credit
claimed on line 1 for qualified diesel-powered
highway vehicles.

‘Cash Method. —If you use the cash method,
include the credit in gross income on your return
for the year you claim 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.

Accrual Method.—If you use the accrual
method, figure 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.

Credit for Purchase of Qualified Diesel-
Powered Highway Vehicles.—If you purchased a
diesel-powered highway vehicle for a use other
than resale and you are the first purchaser, you
may claim a credit of $102 for an automobile and
$198 for a light truck or van. A qualified diesel-
powered highway vehicle is any diesel-powered
highway vehicle that has at least 4 wheels, has a
gross vehicle weight rating of 10,000 pounds or
less, and is registered for highway use in the
United States under the laws of any state. Enter
the credit on line 1 of Form 4136. If you
purchased more than one vehicle that qualifies for
the credit, enter the total of the credits on line 1.
What Gasoline To Include.—You may claim
credit for Federal excise tax on gasoline or
gasohol for farm uses, commercial fishing vessel
Uses, off-highway business uses, intercity, local,
or school bus uses, and commercial or certain
helicopter aviation uses.
Farm Use.—You may claim a credit for
gasoline used for farming in a trade or business
(Continued on next page)

Form 4136 (1986)


Form 4136 (1986)

Page 2

farm in the U.S. The credit for gasoline is 9¢ a
gallon and 3¢ a gallon for gasohol. If gasoline
was purchased for blending with alcohol, the
credit is 3%¢ (.0333) a gallon. (See instructions
for aviation fuel used for farming.) Such farms
include the following: stock, dairy, poultry, fur-
bearing animals, truck farms, plantations,
ranches, nurseries, ranges, greenhouses, and
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 listed below by anyone else, the owner,
tenant, or operator is considered the user of the
gasoline. There is an exception to this rule. An
aerial or ground applicator of agricultural
substances is considered to have used gasoline
for farming if the applicator is the ultimate
purchaser of gasoline and the farm owner,
tenant, or operator agrees not to be treated as
the user and ultimate purchaser of the gasoline.

The following tasks are considered farming:

(a) Cultivating the soil, and raising or
harvesting any horticultural or agricultural
commodity. This includes raising livestock, bees,
poultry, fur-bearing animals, and wildlife.

(b) Handling, drying, packing, grading, or
storing any horticultural or agricultural
commodity before manufacture, but only if the
owner, tenant, or operator produced more than
half of the commodity treated.

(c) Planting, cultivating, cutting, or preparing
trees for market but not milling the lumber.

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

Gasoline is not considered used by you for
farming if itis used:

(a) Off the farm to transport livestock, feed,
crops, or equipment.

(b)_ In processing, packaging, freezing, or
canning operations

(c) For personal purposes.

(d)_ On the farm of another person, even
though used for farming.

Often a vehicle is used on the farm both for
farming and for nonfarming purposes. In these
cases, show the number of gallons of gasoline
used for each purpose when claiming a credit.

Commercial Fishing Vessel Use.—You may
claim a credit for tax paid on gasoline and a
gasoline/alcohol mixture (gasohol) used in a
commercial fishing vessel. The credit for gasoline
is 9¢ a gallon and 3¢ a gallon for gasohol. If
gasoline was purchased for blending with alcohol,
the credit is 3%¢ (.0333) 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 catching fish to
be sold commercially.

Off-Highway Business Uses.—You may claim
a credit for tax paid on gasoline and a
gasoline/alcohol mixture (gasohol) used for
off-highway business purposes. The credit for
gasoline is 9¢ a gallon and 3¢ a gallon for
gasohol. If gasoline was purchased for blending
with alcohol, the credit is 3¥¢ (.0333) a gallon.
Off-highway business use does not include
gasoline used in a motorboat that is not a
commercial fishing vessel, or in a highway vehicle
that either must be registered for highway use or
is owned by the U.S. and used on the highway.

Intercity, Local, or School Bus Uses.—If you
are the ultimate purchaser of gasoline or a
gasoline/alcohol mixture (gasohol) for a bus that
provides transportation (1) to the general public
for a fee, or (2) to students and school
employees, you may claim a credit for tax paid on
gasoline used for this service of 9¢ a gallon and
3¢ a gallon for gasohol. If gasoline was
purchased for blending with alcohol, the credit is
3446 (.0333) a gallon.

If you provide transportation on intercity and
local buses on nonscheduled irregular routes, you

may take the credit only if the seating capacity of
the bus is at least 20 adults, not including the
driver.

Gasoline Mixed With Alcohol.—You may
claim a credit for tax paid on gasoline that you
used to produce a gasoline/alcohol mixture that
was sold or used in your trade or business. The
credit is 5%4¢ (.0566) a gallon if you paid 9¢ a
gallon.

Qualified Taxicab Use.—The ultimate
purchaser may claim a credit for tax paid on
gasoline used in a qualified taxicab providing
Qualified taxicab service in the amount of 4¢ a
gallon.

A qualified taxicab is a land vehicle that holds
fewer than 10 adults including the driver. For
1978 and later model years, the vehicle model
must have a fuel economy rating better than the
average fuel economy standard for the model
year (18 mpg for 1978 models, 19 mpg for 1979,
20 mpg for 1980, 22 mpg for 1981, 24 mpg for
1982, 26 mpg for 1983, 27 mpg for 1984 and
272 mpg for 1985 and later years). A taxicab is
qualified if the vehicle received or could have
received an exemption from the fuel economy
standard for the model year. Fuel economy
standards do not apply for vehicles acquired
before 1979.

Qualified taxicab service means furnishing
nonscheduled land transportation for a fixed fee
in a qualified taxicab. The driver must be properly
licensed as a taxicab driver and must be able to
furnish ride-sharing.

Aviation Fuel—Farming, Commercial, or
Helicopter Uses. —You may claim a credit for
tax paid on aviation gasoline used in farming,
commercial, or certain helicopter aviation uses of
9¢ or 12¢ a gallon, whichever is paid. Also, you
may claim a credit for tax paid on gasohol of 3¢ a
gallon.

For the definition of farm use, see Farm Use,
under What Gasoline To Include.

Commercial aviation is the use of an aircraft
ina business of carrying people or property by air
for pay. The use of an aircraft may be considered
noncommercial aviation if the aircraft has a
maximum certificated takeoff weight of 6,000
pounds or less and is not operated on an
established line, or is owned or leased by a
member of an affiliated group and is not available
for hire to nonmembers.

Helicopter uses are:

(a) Transporting individuals, equipment, or
supplies in the exploration for, or the
development or removal of, hard minerals, oil, or
gas; or

(b) Planting, cultivating, cutting, transporting,
or caring for trees (including logging operations),
but only if the helicopter does not take off from,
or land at, a facility eligible for assistance under
the Airport and Airway Development Act of 1970,
or otherwise use services provided under the
Airport and Airway Improvement Act of 1982
during such use.

What Special Fuels To Include.—

(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 a diesel-powered
highway vehicle unless there was a taxable sale of
the fuel under (1) above.

(b) Special Motor Fuels.—These fuels
include benzol, benzene, naphtha, liquefied
petroleum gas, casing head and natural gasoline
and other liquids, except kerosene, gas oil, fuel
oil, diesel fuel, or any product taxable under
section 4081. Special motor fuels must be (1)
sold for use as a fuel in a motor vehicle 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) Qualified Methanol and Ethanol Fuels. —
These fuels include any liquid 85% of which
consists of alcohol produced other than from
petroleum or natural gas. The allowable credit for
tax paid is 9¢ a gallon. However, after 1986 the
allowable credit is 6¢ a gallon. Claim the credit on
line 5a.

(d) Diesel Fuel Mixed With Alcohol.—You
may claim a credit for tax paid on diesel fuel that
is later used in a mixture of diesel fuel and
alcohol if itis at least 10% alcohol. The allowable
credit is 6¢ a gallon.

(e) Special Fuels Mixed With Alcohol.—You
may claim a credit for tax paid on special fuels
that are later used in a mixture of a special fuel
and alcohol if itis at least 10% alcohol. The
allowable credit is 6¢ a gallon.

Uses of Special Fuels. —

Farm Use.—You may claim a credit for tax
paid on diesel fuel of 15¢ a gallon and for tax paid
on diesel fuel mixed with alcohol of 9¢ a gallon.
You may claim a credit for tax paid on special
motor fuels of 9¢ a gallon and 3¢ a gallon for
special fuels mixed with alcohol. If 85% of the
special fuel consists of alcohol produced from
natural gas, you may claim a credit for the tax
paid of 9¢ or 4¥¢ a gallon. Also, you may claim a
credit for qualified methanol and ethanol of 9¢
(3¢ after 1986). Enter the credit for methanol
and ethanol under special fuels on Form 4136 for
your type of use. For the definition of farm use,
see Farm Use, under What Gasoline To Include

Commercial Fishing Vessel Use.—You may
claim a credit for tax paid on diesel fuel of 15¢ a
gallon and 9¢ a gallon for diesel fuel mixed with
alcohol. You may claim a credit for tax paid on
special motor fuels of 9¢ a gallon and 3¢ a gallon
for special fuels mixed with alcohol. If 85% of the
special fuel consists of alcohol produced from
natural gas, you may claim a credit for the tax
paid of 9¢ or 412¢ a gallon, Also, you may claim a
credit for qualified methanol and ethanol of 9¢
(¢ after 1986). Enter the credit for methanol
and ethanol under special fuels on Form 4136 for
your type of use. For the definition of commercial
fishing vessel use, see Commercial Fishing Vessel
Use, under What Gasoline To Include.

Bus Uses.—Generally, you may claim a credit
for tax paid on diesel fuel of 12¢ a gallon for
intercity and local bus use.

You may claim a credit of 15¢ a gallon for tax
paid on diesel fuel if the fuel is used in a qualified
local bus or school bus. A qualified local bus is
any local bus that seats at least 20 adults (not
including the driver), that transports the general
public along regular scheduled routes, and that is
under contract (or receives more than a nominal
subsidy) from any state or local government to
furnish such transportation. You may claim a
credit for tax paid on special motor fuels of 9¢ a
gallon. For the definition of intercity, local, and
school bus uses, see Intercity, Local, or School
Bus Uses, under What Gasoline To Include.

Farming, Commercial, or Helicopter Aviation
Uses.—You may claim a credit for tax paid on
fuels of 14¢ a gallon that were for farming,
commercial, or helicopter aviation uses. See
instructions for the definitions of farming uses
and commercial or helicopter aviation uses under
What Gasoline To Include.

Other Nontaxable Uses—Diesel and Special
Motor Fuel.—These fuels may qualify for a
credit in any of the following cases:
© You resold the fuel.
© 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 exists, claim as
a 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. Enter the net amount of credit on line
2c(ii) or (ii), Form 4136, for off-highway
business credit.

What Fuels Not To Include.—Fuels lost through
spillage, accident, or shrinkage are not
considered used and do not qualify for credit or
refund.

Additional Information.—Publication 225,
Farmer's Tax Guide, and Publication 378, Fuel
Tax Credits, are available from the Internal
Revenue Service.