Federal Excise Taxes and Statutory Exemptions
Released: 1998-03-20T00:00:00

The chart below lists various federal excise taxes on retailers and manufacturers, the location of the tax in the Internal Revenue Code, a general rule as to who has to pay the tax, and a listing of statutory exemptions, with an indication of whether there are special exemptions for federal agencies.

The general rule for federal agencies is contained in IRC § 4907. Under IRC § 4907, the taxes imposed by subtitle D of the Code, except the occupational tax on wagering imposed by IRC § 4411, do apply to agencies and instrumentalities of the United States unless there are specific statutory exemptions. Subtitle D includes most of the excise taxes in the Internal Revenue Code, but it does not cover taxes on alcohol, tobacco, firearms, and the greenmail taxes contained in subtitle E.

IRC § 4221 contains five general exemptions from the excise taxes in chapters 31 and 32 of subtitle D. These include exemptions when the article is first sold (1) for use in further manufacture; (2) for export; (3) for use as supplies for vessels and aircraft; (4) to a state or local government for its exclusive use; and (5) to a nonprofit education organization for its exclusive use. The extent to which each of these exemptions applies to the relevant excise taxes is noted below.

Passenger Vehicle Luxury Tax IRC § 4001

Diesel Fuel IRC §§ 4041(a)(1), 4081(a)(2)

Gasoline Special Motor Fuels IRC § 4041(a)(2), 4081(a)(2)(A)(i)

Compressed Natural Gas IRC § 4041(a)(3)

Methanol and Ethanol Fuel IRC §§ 4041(b)(2), 4081(c)

Noncommercial Aviation Fuel Other than Gasoline IRC §§ 4041(c), 4091

Fuel Used in Commercial Transportation on Inland Waterways IRC § 4042

Heavy Trucks and Trailers Sold at Retail IRC § 4051

Gas Guzzler Tax IRC § 4064(a)

Tires of the type Used on Highway Vehicles IRC § 4071

Coal IRC § 4121

Vaccines IRC § 4131

Sporting Goods IRC § 4161

Firearms IRC § 4181

Communications IRC § 4251

Transportation by Air IRC § 4261

Transportation of Property by Air IRC § 4271

Foreign Insurers IRC § 4371

Wagering IRC § 4401

Occupational Tax on Wagering IRC § 4411

Ship Passengers Tax IRC § 4463

Highway Use Tax IRC § 4481

Ozone-Depleting Chemicals IRC § 4681

Unregistered Obligations IRC § 4701

Wagering Occupational Tax IRC § 4901

Gallonage Taxes IRC § 5001

Wines IRC § 5041

Beer IRC § 5051

Tobacco IRC § 5701

Machine Guns, Destructive Devices, and Certain Other Firearms IRC §§ 5801, 5811