An Act to amend the Internal Revenue Code of 1954 to relieve farmers from excise taxes in the case of gasoline and special fuels used on the farm for farming purposes.
PL 84-466 (H.R.8780), enacted 04/02/1956

70 S T A T . ] 
PUBLIC LAW 466-APR. 2, 1956 
87 
is amended to read as follows: "For the period beginning September 
1, 1954, and ending June 30, 1955, not to exceed $50,000,000, and for 
the fiscal year ending June 30, 1956, not to exceed $60,000,000, and for 
each of the two fiscal years in the period beginning July 1, 1956, and 
ending June 30, 1958, not to exceed $75,000,000, of the funds of the 
Commodity Credit Corporation shall be used to increase the consump-
tion of fluid milk by children in (1) nonprofit schools of high-school 
grade and under; and (2) such nonprofit nursery schools, child-care 
centers, settlement houses, summer camps, and similar nonprofit insti-
tutions as are devoted to the care and training of underprivileged 
children on a public welfare or charitable basis." 
SEC. 2. Section 204 (e) of the Agricultural Act of 1954 is amended 
f|"s?aV°9i)o. 
to read as follows: "As a means of stabilizing the dairy industry 
i use 397. * 
and further suppressing and eradicating brucellosis in cattle, the Sec-
retary is authorized to transfer not to exceed $17,000,000 for the fiscal 
year ending June 30, 1956, and $20,000,000 for each of the fiscal years 
1957 and 1958, from funds available to the Commodity Credit Cor-
poration to the appropriation item "Plant and Animal Disease and 
Pest Control" in the Department of Agriculture Appropriation Act 
for such fiscal year for the purpose of accelerating the brucellosis 
eradication program, for the purpose of increasing to not to exceed 
$50 per head of cattle the amount of the indemnities paid by the Fed-
eral Government for cattle destroyed because of brucellosis in con-
nection with cooperative control and eradication programs for such 
disease in cattle entered into by the Secretary under the authority of 
the Act of May 29, 1884, as amended, for the purpose of increasing 
y^i^c%ii' 
the number of such indemnities, and for the purpose of defraying any 
additional administrative expenses in connection therewith. 
There 
are hereby authorized to be appropriated such sums as may be neces-
sary to reimburse the Commodity Credit Corporation for expendi-
tures pursuant to this section." 
SEC. 3. The first sentence of subsection (a) and the first sentence of pii^8*'"efc*.' **'*°' 
subsection (b) of section 202 of the Agricultural Act of 1949, as 
68 stat. *9oo. 
amended, are amended by striking out "1956" and inserting in lieu 
' ^^^ i446a. 
thereof "1958". 
Approved April 2, 1956. 
Public Law 466 
CHAPTER 160 
AN ACT 
j^fii 
2
^ 1956 
To amend the Internal Revenue Code of 1954 to relieve farmers from excise taxes —[H. R. 8780]— 
in the case of gasoline and special fuels used on the farm for farming 
purposes. 
Taxes. 
G a s o l i n e 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled, 
SECTION 1. RELIEF FROM EXCISE TAX ON GASOLINE. 
special fuels. 
Subchapter B of chapter 65 of the Internal Kevenue Code of 1954 
f^^^^^ f/-j j . 
(rules of special application for abatements, credits, and refunds) 6420. 
is amended by renumbering section 6420 as 6421 and by inserting 
after section 6419 the following new section : 
"SEC. 6420. GASOLINE USED ON FARMS. 
"(a) GASOLINE.—If gasoline is used on a farm for farming pur-
jjoses, the Secretary or his delegate shall pay (Avithout interest) to 
the, ultimate purchaser of such gasoline the amount determined by 
multiplying— 
"(1) the number of gallons so used, by 
88 
PUBLIC LAW 466-APR. 2, 1956 
[70 S T A T . 
26^c?408*u' 
"(^^ ^^^ ^^^^ ^^ *^^ *
^
^
^ gasoline under section 4081 whicli 
applied on the date he purchased such gasoline. 
"(b) TIME FOR FILING CLAIM; PERIOD COVERED.—Not more than 
one claim may be filed under this section by any person with respect 
to gasoline used during the one-year period ending on June 30 of any 
year. No claim shall be allowed under this section with respect to 
any one-year period unless filed on or before September 30 of the year 
in which such one-year period ends. 
"(c) MEANING or TERMS.—For purposes of this section— 
"(1) USE ON A FARM FOR FARMING PURPOSES.—Gasoline shall 
be treated as used on a farm for farming purposes only if used 
(A) in carrying on a trade or business, (B) on a farm situated 
in the United States, and (C) for farming purposes. 
"(2) FARM.—The term 'farm' includes stock, dairy, poultry, 
fruit, fur-bearing animal, and truck farms, plantations, ranches, 
nurseries, ranges, greenhouses or other similar structures used 
primarily for the raising of agricultural or horticultural com-
modities, and orchards, 
"(3) FARMING PURPOSES.—Gasoline shall be treated as used for 
farming purposes only if used— 
"(A) by the owner, tenant, or operator of a farm, in con-
nection with cultivating the soil, or in connection with rais-
ing or harvesting any agricultural or horticultural com-
modity, including the raising, shearing, feeding, caring for, 
training, and management of livestock, bees, poultry, and 
fur-bearing animals and wildlife, on a farm of which he is 
the owner, tenant, or operator; except that if such use is by 
any person other than the owner, tenant, or operator of such 
farm, then (i) for purposes of this subparagraph, in applying 
subsection (a) to this subparagraph, and for purposes of sec-
tVxjsT'elii' 
*^oi^ ^^1^ (^) (2) (^) (^i) (b^* ^^^ *o^ purposes of section 
4041), the owner, tenant, or operator of the farm on which 
26^icf*404'!' 
gasoline or a liquid taxable under section 4041 is used shall 
be treated as the user and ultimate purchaser of such gasoline 
or liquid, and (ii) for purposes of applying section 6416 (b) 
(2) (C) (ii), any tax paid under section 4041 in respect of a 
liquid used on a farm for farming purposes (within the 
meaning of this subparagraph) shall be treated as having 
been paid by the owner, tenant, or operator of the farm on 
which such liquid is used; 
''(B) by the owner, tenant, or operator of a farm, in han-
dling, drying, packing, grading, or storing any agricultural 
or horticultural commodity in its unmanufactured state; 
but only if such owner, tenant, or operator produced more 
than one-half of the commodity which he so treated during 
the period with respect to which claim is filed; 
"(C) by the owner, tenant, or operator of a farm, in con-
nection with— 
"(i) the planting, cultivating, caring for, or cutting 
of trees, or 
"(ii) the preparation (other than milling) of trees for 
market, 
incidental to farming operations; or 
"(D) by the owner, tenant, or operator of a farm, in con-
nection with the operation, management, conservation, im-
provement, or maintenance of such farm and its tools and 
equipment. 
" (4) GASOLINE.—The term 'gasoline' has the meaning given to 
ffulcfVaa^ 
such term by section 4082 (b). 
70 S T A T . ] 
PUBLIC LAW 466-APR. 2, 1956 
m 
"(d) EXEMPT SALES; OTHER PAYMENTS OR REFUNDS AVAILABLE.— 
No amount shall be paid under this section with respect to any gasoline 
which the Secretary or his delegate determines was exempt from the 
tax imposed by section 4081. The amount which (but for this sen-
tence) would be payable under this section with respect to any gasoline 
shall be reduced oy any other amount which the Secretary or his dele-
gate determines is payable under this section, or is refundable under 
any provision of this title, to any person with respect to such gasoline. 
"(e) APPLICABLE LAWS.— 
"(1) I N GENERAL.—All provisions of law, including penalties, 
applicable in respect of the tax imposed b^ section 4081 shall, inso-
far as applicable and not inconsistent with this section, apply in 
in respect of the payments provided for in this section to the same 
extent as if such payments constituted refunds of overpayments of 
the tax so imposed. 
"(2) EXAMINATION OF BOOKS AND WITNESSES.—For the purpose 
of ascertaining the correctness of any claim made under this sec-
tion, or the correctness of any payment made in respect of any 
such claim, the Secretary or his delegate shall have the authority 
granted by paragraphs (1), (2), and (3) of section 7602 (relating 
to examination of books and witnesses) as if the claimant were the 
person liable for tax. 
"(3) FRACTIONAL PARTS OF A DOLLAR.—Section 7504 (granting 
the Secretary discretion with respect to fractional parts of a 
dollar) shall not apply. 
"(f) REGULATIONS.—The Secretary or his delegate may by regula-
tions prescribe the conditions, not inconsistent with the provisions of 
this section, under which payments may be made under this section. 
"(g) EFFECTIVE DATE.—This section shall apply only with respect 
to gasoline purchased after December 31,1955. 
"(h) CROSS REFERENCES.— 
"(1) For exemption from tax in case of diesel fuel and special 
motor fuels used on a farm for farming purposes, see section 
4041 (d). 
"(2) For civil penalty for excessive claim under this section, 
see section 6675. 
"(3) For fraud penalties, etc.. see chapter 75 (section 7201 and 
following, relating to crimes, other offenses, and forfeitures)." 
SEC. 2. RELIEF FROM TAXES ON DIESEL FUEL AND SPECIAL MOTOR 
FUELS. 
(a) (1) Section 4041 of the Internal Revenue Code of 1954 (relating 
to excise taxes on diesel fuel and special motor fuels) is amended by 
adding at the end thereof the following new subsection' 
"(d) EXEMPTION FOR FARM USE.— 
"(1) EXEMPTION.—Under regulations prescribed by the Secre-
tary or his delegate— 
"(A) no tax shall be imposed under subsection (a) (1) or 
(b) (1) on the sale of any liquid sold for use on a farm for 
farming purposes, and 
"(B) no tax shall be imposed under subsection (a) (2) or 
(b) (2) on the use of any liquid used on a farm for farming 
purposes. 
"(2) USE ON A FARM FOR FARMING PURPOSES.—For purposes of 
paragraph (1) of this subsection, use on a farm for farming pur-
poses shall be determined in accordance with paragraphs (1), (2), 
and (3) of section 6420 (c)." 
(2) The amendment made by paragraph (1) shall take effect on the 
day after the date of the enactment of this Act. 
68A Stat. 483. 
26 u s e 4081. 
68A Stat. 901. 
26 u s e 7602. 
68A Stat. 896. 
26 u s e 7504. 
68A Stat. 478. 
26 u s e 4041. 
Ante. p. 88* 
Effective date. 
90 
PUBLIC LAW 466-APR. 2, 1956 
[70 S T A T . 
68A Stat. 798. 
26 u s e 6416. 
68A Stat. 478. 
26 u s e 4041. 
Ante, p. 88. 
Effective date. 
68A Stat. 828. 
26 u s e 667 1-
6674. 
Ante, p. 88. 
68A Stat. 483. 
26 u s e 40 81-
4083. 
Ante, p. 87. 
68A Stat. 769. 
26 u s e 620 1-
6206. 
Ante, p. 87. 
(b) (1) Section 6416 (b) (2) (C) of such Code (relating to credit 
or refund of overpayment of tax on special fuels) is amended to read 
as follows: 
" ( C ) I n the case of a liquid taxable under section 4041, sold 
for use as fuel in a diesel-powered highway vehicle or as fuel 
for the propulsion of a motor vehicle, motorboat, or airplane, 
if (i) the vendee used such liquid otherwise than as fuel in 
such a vehicle, motorboat, or airplane or resold such liquid, 
or (ii) such liquid was (within the meaning of paragraphs 
(1), ( 2 ) , and (3) of section 6420 (c)) used on a farm for 
farming purposes;". 
(2) T h e amendment made by paragraph (1) shall apply with 
respect to liquid sold after December 31,1955. 
SEC. 3. CIVIL PENALTY FOR EXCESSIVE CLAIMS FOR GASOLINE USED 
ON FARMS. 
Subchapter B of chapter 68 of the Internal Revenue Code of 1954 
(relating to assessable penalties) is amended by adding at the end 
thereof the following new section: 
"SEC. 6675. EXCESSIVE CLAIMS FOR GASOLINE USED ON FARMS. 
" ( a ) Civiii P E N A L T Y . — I n addition to any criminal penalty provided 
by law, if a claim is made under section 6420 (relating to gasoline used 
on farms) for an excessive amount, unless it is shown that the claim 
for such excessive amount is due to reasonable cause, the person making 
such claim shall be liable to a penalty in an amount equal to whichever 
of the following is the greater: 
" (1) Two times the excessive amount; or 
"(2) $10. 
" ( b ) 
EXCESSIVE A M O U N T D E F I N E D . — F o r purposes of this section, 
the term 'excessive amount' means in the case of any person the 
amount by which— 
" ( 1 ) the amount claimed under section 6420 for any period, 
exceeds 
"(2) the amount allowable under such section for such period. 
" ( c ) 
ASSESSMENT AND COIILECTION OF P E N A L T Y . — 
"For assessment and collection of penalty provided by subsec-
tion (a), see section 6206." 
SEC. 4. TECHNICAL AMENDMENTS. 
(a) (1) Subpart A of part I I I of subchapter A of chapter 32 of 
the Internal Revenue Code of 1954 (relating to excise tax on gasoline) 
is amended by adding at the end thereof the following new section: 
"SEC. 4084. RELIEF OF FARMERS FROM TAX IN CASE OF GASOLINE 
USED ON THE FARM. 
"For provisions to relieve farmers from excise tax in the case 
of gasoline used on the farm for farming purposes, see section 
6420." 
(2) T h e table of sections for such subpart A is amended by adding 
at the end thereof the following: 
"Sec. 4084. Relief of farmers from tax in case of gasoline used on 
the farm." 
(b) (1) Subchapter A of chapter 63 of such Code (relating to 
assessment) is amended by renumbering section 6206 as 6207 and by 
inserting after section 6205 the following new section: 
"SEC. 6206. SPECIAL RULES APPLICABLE TO EXCESSIVE 
CLAIMS 
UNDER SECTION 6420. 
"Any portion of a payment made under section 6420 which con-
stitutes an excessive amount (as defined in section 6675 ( b ) ) , and 
70 S T A T . ] 
PUBLIC LAW 466-APR. 2, 1956 
91 
any civil penalty provided by section 6675, may be assessed and col-
lected as if it were a tax imposed by section 4081 and as if the person 
who made the claim were liable for such tax. The period for assessing 
any such portion, and for assessing any such penalty, shall be 3 years 
from the last day prescribed for the filing of the claim under section 
6420." 
(2) The table of sections for such subchapter A is amended by 
striking out 
"Sec. 6206. Cross references." 
and inserting in lieu thereof 
"Sec. 6206. Special rules applicable to excessive claims under 
section 6420. 
"Sec. 6207. Cross references." 
(c) The table of sections for subchapter B of chapter 65 of such 
Code is amended by striking out 
"Sec. 6420. Cross references." 
and inserting in lieu thereof the following: 
"Sec. 6420. Gasoline used on farms. 
"Sec. 6421. Cross references." 
(d) Section 6504 of such Code (cross references for limitations on 
assessments) is amended by adding at the end thereof the following: 
"(13) Assessments to recover excessive amounts paid under 
section 6420 (relating to gasoline used on farms) and assessments 
of civil penalties under section 6675 for excessive claims under 
section 6420, see section 6206." 
(e) Section 6511 (f) of such Code (cross references for limitations 
on credit or refund) is amended by adding at the end thereof the 
following: 
"(5) For limitations in case of payments under section 6420 
(relating to gasoline used on farms), see section 6420 (b)." 
(f) Section 6612 (c) of such Code (cross references for restrictions 
on interest) is amended by striking out "and** before "6419" and by 
inserting before the period at the end thereof the following: ", and 
6420 (relating to payments in the case of gasoline used on the 
farm for farming purposes)". 
(g) The table of sections for subchapter B of chapter 68 of such Code 
is amended by adding at the end thereof the following: 
"Sec. 6675. Excessive claims for gasoline used on farms." 
(h) Section 7210 of such Code (relating to failure to obey summons) 
is amended by striking out "sections 7602," and inserting in lieu thereof 
"sections6420 (e) (2),7602,". 
(i) Sections 7603 (relating to service of summons) and 7604 (relat-
ing to enforcement of summons) and the first sentence of section 7605 
(relating to time and place of examination) of such (^ode are each 
amended by striking out "section 7602" wherever it api)eai's and insert-
ing in lieu thereof "section 6420 (e) (2) or 7602". The second sentence 
of section 7605 of such Code is amended by striking out "section 7602" 
and inserting in lieu thereof "section 7602, or under tlie corresponding 
authority of section 6420 (e) (2),". 
Approved April 2, 1956. 
68A Stat. 483. 
26 u s e 4081. 
68A Stat. 794. 
68A Stat. 807. 
26 u s e 6504. 
68A Stat. 808. 
26 u s e 6511. 
68A Stat. 820. 
26 u s e 6612. 
68A Stat. 828. 
68A Stat. 854. 
26 u s e 7210. 
68A Stat. 902. 
26 u s e 
7 6 0 3 -
7605.