Court Opinion

ID: 6326275
Source: CourtListenerOpinion
Date Created: 2022-03-24 00:00:22.346191+00
Date Added: 2024-06-11T09:22:10.491297
License: Public Domain

Case: 20-20237     Document: 00516251473         Page: 1    Date Filed: 03/23/2022

           United States Court of Appeals
                for the Fifth Circuit
                                                                      United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                       March 23, 2022
                                  No. 20-20237                          Lyle W. Cayce
                                                                             Clerk

   Vitol, Incorporated,

                                                           Plaintiff—Appellant,

                                      versus

   United States of America,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                           USDC No. 4:18-CV-2275

   Before King, Elrod, and Willett, Circuit Judges.
   Don R. Willett, Circuit Judge:
          This interlocutory appeal poses a statutory-interpretation question of
   first impression: Is butane a “liquefied petroleum gas” (LPG) under 26
   U.S.C. § 6426(d)(2)? Vitol claims that butane is an LPG and therefore an
   “alternative fuel” that can be mixed with a “taxable fuel” to qualify for the
   tax credit under § 6426(e). On these grounds, Vitol sued the United States
   in federal court, seeking an $8.8 million tax refund. Vitol moved for partial
   summary judgment on whether butane is an LPG under 26 U.S.C.
   § 6426(d)(2). The trial court denied the motion, concluding that butane is
Case: 20-20237       Document: 00516251473          Page: 2   Date Filed: 03/23/2022

                                     No. 20-20237

   not an LPG under 26 U.S.C. § 6426(d)(2), but certified its order for
   interlocutory appeal.
            Vitol argues that the common understanding of LPG includes
   butane—game over. The term LPG, however, as used in § 6426(d)(2)’s
   definition of alternative fuel, fits within a broader statutory scheme that
   precludes any taxable fuel from also qualifying as an alternative fuel. And
   butane is a taxable fuel under that same statutory scheme. Text cannot be
   divorced from context, and statutory meaning is not always common
   meaning. Congress’s words must be read as part of a contextual whole. We
   affirm the denial of partial summary judgment and conclude that butane is
   not an LPG under § 6426(d)(2).
                                 I. Background
   A.       Factual and Procedural Background
            The parties do agree on the facts. Vitol sued the United States for a
   tax refund of $8.8 million, claiming that the IRS should have allowed a tax
   credit under 26 U.S.C. § 6426(e) for fuel blended with butane, a product
   Vitol introduced in 2013. Vitol argues that butane is a “liquefied petroleum
   gas” under § 6426(d)(2) and therefore an “alternative fuel” eligible for the
   § 6426(e) credit when mixed with a “taxable fuel.” The United States argues
   that butane is a “taxable fuel” and therefore not an eligible “alternative
   fuel.”
            Vitol sought partial summary judgment on the legal issue of whether
   butane is an LPG under § 6426(d)(2). The magistrate judge recommended
   that the district court deny the motion, concluding that butane was not an
   LPG under § 6426. The district court adopted the magistrate judge’s
   recommendations, overruling Vitol’s objections. The district court granted

                                          2
Case: 20-20237          Document: 00516251473              Page: 3      Date Filed: 03/23/2022

                                          No. 20-20237

   Vitol’s request to certify the order for interlocutory appeal and stayed the
   case. 1 We granted Vitol’s motion for leave to file an interlocutory appeal.
   B.      Statutory and Regulatory Framework
           The tax code imposes excise taxes on fuel. 2 Two of those code
   provisions matter here, each involving a web of statutory and regulatory
   definitions. First, § 4081 imposes an excise tax on “taxable fuels,” defined at
   § 4083 to mean “(A) gasoline, (B) diesel fuel, and (C) kerosene.” The term
   “gasoline” is further defined to include “gasoline blend[s]” and, “to the
   extent prescribed in regulations,” “any gasoline blend stock” that is a
   “petroleum product component of gasoline.” 3 The regulations include
   twenty-four examples of “[g]asoline blendstocks,” one of which is butane. 4
           Second, § 4041(a)(2)(A) imposes an excise tax on “alternative fuels,”
   defined there as “any liquid[, ]other than gas oil, fuel oil, or any product tax-
   able under section 4081.” 5 Regulations referencing § 4041(a)(2)(A) describe
   alternative fuel as follows: “(1) Except as provided in paragraph . . . (2) of this
   section,” alternative fuel “means any liquid fuel,” which includes “[a]ny liq-
   uefied petroleum gas (such as propane, butane, pentane, or mixtures of the

           1
            For purposes of this memo, the “trial court” refers to the conclusions of the
   magistrate judge as adopted by the district judge.
           2
            26 U.S.C. §§ 4041, 4081. Unless otherwise indicated, the statutory and regulatory
   provisions are those in effect during the year 2013, the first year for which Vitol claims the
   credit. This corresponds to the 2012 version of the U.S. Code and the April 1, 2012 edition
   of the Code of Federal Regulations.
           3
               26 U.S.C. § 4083(a)(2).
           4
              26 C.F.R. § 48.4081–1(c)(3)(i)(B) (“provid[ing] definitions for purposes of the
   tax on taxable fuel imposed by section 4081”). The regulation uses the term “blendstock,”
   id., while statute uses the term “blend stock,” 26 U.S.C. § 4083(a)(2)(B)(i). The parties
   have not indicated this difference is material, so we do not address it.
           5
             The term “special motor fuel” appears throughout the relevant statutes and
   regulations. The parties agree that this is a predecessor term for “alternative fuel.”

                                                 3
Case: 20-20237          Document: 00516251473           Page: 4   Date Filed: 03/23/2022

                                         No. 20-20237

   same).” 6 Paragraph (2) of that section reiterates that alternative fuel “does
   not include any product taxable under the provisions of section 4081.” 7
          The above provisions impose taxes, as summarized here:

          The tax code also provides credits reducing those § 4081 and
   § 4041(a)(2)(A) excise taxes, for fuel that is made from certain components. 8
   The § 4041 tax for alternative fuel can be reduced by the alternative fuel
   credit at § 6426(d). The § 4081 tax for taxable fuel can be reduced by the
   alternative fuel mixture credit at § 6426(e), for fuel that is “a mixture of

          6
              26 C.F.R. § 48.4041–8(f)(1).
          7
              Id. § 48.4041–8(f)(2).
          8
              26 U.S.C. § 6426.

                                              4
Case: 20-20237        Document: 00516251473              Page: 5      Date Filed: 03/23/2022

                                         No. 20-20237

   alternative fuel and taxable fuel.” 9 (Vitol seeks that § 6426(e) credit here.)
   The definition of “alternative fuel,” for purposes of § 6426(d) and (e),
   comes from § 6426(d):
                    For purposes of this section, the term
                   “alternative fuel” means—
                       (A) liquefied petroleum gas,
                       (B) P Series Fuels (as defined by the
                       Secretary of Energy under section 13211(2) of
                       title 42, United States Code),
                       (C) compressed or liquefied natural gas,
                       (D) liquefied hydrogen,
                       (E) any liquid fuel which meets the
                       requirements of paragraph (4) and which is
                       derived from coal (including peat) through
                       the Fischer-Tropsch process,
                       (F) compressed or liquefied gas derived from
                       biomass (as defined in section 45K(c)(3)),
                       and
                       (G) liquid fuel derived from biomass (as
                       defined in section 45K(c)(3)).
                   Such term does not include ethanol, methanol,
                   biodiesel, or any fuel (including lignin, wood
                   residues, or spent pulping liquors) derived from
                   the production of paper or pulp.
   The definition of “taxable fuel,” for § 6426(e) purposes, incorporates by
   reference “subparagraph (A), (B), or (C) of section 4083(a)(1).”

           9
             26 U.S.C. § 6426(a)(1) (providing that the credit at subsection (e) runs “against
   the tax imposed by section 4081”).

                                               5
Case: 20-20237      Document: 00516251473            Page: 6     Date Filed: 03/23/2022

                                      No. 20-20237

          These provisions reducing taxes can be summarized as follows:
                              Tax-Credit Provisions

         26 U.S.C. § 6426(a)(1) reduces          26 U.S.C. § 6426(a)(2) reduces
        § 4081 taxes according to §§ 6426           § 4041 taxes according to
                 (b), (c), and (e)                         § 6426(d)

           § 6426(e): “Alternative fuel          § 6426(d): “Alternative fuel
                 mixture credit”                            credit”

               (e)(2) “alternative fuel         (d)(2) “[f]or purposes of this
              mixture” = “a mixture of           section, alternative fuel” =
             alternative fuel and taxable       “(A) liquefied petroleum gas”
                  fuel (as defined in
            subparagraph (A), (B), or (C)
              of section 4083(a)(1))”

   As discussed above, § 4083 defines taxable fuel to mean gasoline, including
   gasoline blend stocks as provided by regulation (one of which lists butane as
   an example).
                                 II. Jurisdiction
          The trial court had jurisdiction under 28 U.S.C. § 1346(a) and 26
   U.S.C. § 7422. We accepted interlocutory appellate jurisdiction under 28
   U.S.C. § 1292(b) based on the certification of the trial court.
                          III. Standard of Review
          The parties agree that the standard of review is de novo. Vitol argues
   on reply that this is not an appeal from a grant of summary judgment,
   susceptible of affirmance on any grounds supported by the record; rather, our
   review on interlocutory appeal is limited to questions material to the trial
   court’s order. The import of this argument is unclear—the order on appeal
   is a denial of partial summary judgment. But we can disregard it, given the

                                            6
Case: 20-20237           Document: 00516251473               Page: 7       Date Filed: 03/23/2022

                                            No. 20-20237

   parties’ agreement and precedent stating that “statutory interpretation of
   the Internal Revenue Code . . . is a matter of law that we review de novo.” 10
                                       IV. Discussion
           For the following reasons, the plain language of the statute, taken in
   context, excludes butane from the definition of a liquefied petroleum gas
   under § 6426(d)(2). Therefore, we AFFIRM the denial of partial summary
   judgment. Relying on the statute’s plain language, we need not and do not
   address the absurdity canon, Revenue Ruling 2018–2, or Vitol’s affidavit.
          We begin with some housekeeping items:
          First, we apply the standard tools of statutory interpretation in their
   proper order. The United States begins by urging us to construe the credit
   narrowly because tax credits are a matter of legislative grace. But that’s not
   the right order. The narrow construction of tax breaks is a substantive canon
   of statutory interpretation. 11 And “substantive canons of construction are not
   applied at the outset of textual inquiry.” 12 “Why? Because a substantive
   canon (and the social policy it enhances) can never defeat concrete text (and
   the congressional policy it enshrines).” 13 Therefore, only if we determine
   that a statute is ambiguous—that is, “after plain meaning and application of

           10
                Schaeffler v. United States, 889 F.3d 238, 242 (5th Cir. 2018).
           11
             See Lawrence Zelenak, The Court and the Code: A Response to the Warp and Woof
   of Statutory Interpretation, 58 Duke L.J. 1783, 1789 (2009) (referring to this rule as a
   substantive canon).
           12
                Thomas v. Reeves, 961 F.3d 800, 820 (5th Cir. 2020) (Willett, J., concurring).
           13
              Id. (relying on then-professor Amy Coney Barrett, Substantive Canons and
   Faithful Agency, 90 B.U. L. Rev. 109, 117 (2010)).

                                                   7
Case: 20-20237            Document: 00516251473               Page: 8   Date Filed: 03/23/2022

                                               No. 20-20237

   the interpretive canons are found lacking”—“do the so-called substantive
   canons . . . come into play.” 14
           Second, we need not consider legislative history or abstract
   congressional purpose. “The truest indication of what Congress intended is
   what Congress enacted.” 15 The United States makes several arguments
   invoking legislative history, including some that postdates the statute in
   question, and both parties argue that their interpretations of the statute best
   serve the statute’s purpose. We decline to consider the legislative history,
   not least because the United States relies heavily on subsequent legislative
   history, which is deemed unauthoritative even by judges who consider
   legislative history. 16
           Having set the textual table, we begin “by examining the plain
   language” of the statute, 17 the words Congress chose. 18 We assume that the
   plain meaning of those words is the same as their ordinary (i.e., “common”

           14
                Id. at 815.
           15
                Thomas, 961 F.3d at 826 (Willett, J., concurring).
           16
              Graham Cty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280,
   298 (2010) (Stevens, J.) (“Needless to say, this letter does not qualify as legislative
   ‘history,’ given that it was written 13 years after the amendments were enacted. It is
   consequently of scant or no value for our purposes.”); accord Cent. Bank of Denver, N.A. v.
   First Interstate Bank of Denver, N.A., 511 U.S. 164, 185 (1994) (Kennedy, J.) (“[T]he
   interpretation given by one Congress (or a committee or Member thereof) to an earlier
   statute is of little assistance in discerning the meaning of that statute.”); Sullivan v.
   Finkelstein, 496 U.S. 617, 632 (1990) (Scalia, J., concurring in part) (“Arguments based on
   subsequent legislative history, like arguments based on antecedent futurity, should not be
   taken seriously, not even in a footnote.”).
           17
                Schaeffler, 889 F.3d at 242.
           18
                Thomas, 961 F.3d at 810 (Willett, J., concurring).

                                                    8
Case: 20-20237           Document: 00516251473             Page: 9      Date Filed: 03/23/2022

                                           No. 20-20237

   or “natural”) meaning, 19 which is often derived from dictionaries. 20 Of
   course, this assumption is not set in stone and yields when (1) the statute
   provides another definition, 21 or (2) when the ordinary meaning is
   incompatible with the statutory context. 22
           Based on the statutory text and context, we conclude that butane is
   not an LPG under § 6426(d)(2). Although the common meaning of LPG
   includes butane, § 6426(d)(2) is a subsidiary part of a broader statutory
   framework that treats a given fuel as either a taxable fuel or an alternative
   fuel, but not both. Section 6426 separates taxable fuels and alternative fuels
   using two distinct subparts. And in those subparts, § 6426 expressly
   references the structural relationships between its credits and the taxes they
   offset, imposed at § 4081 and § 4041. And those provisions, in turn, define
   alternative fuels to exclude any taxable fuel. Thus, the statutory framework
   is mutually exclusive: A given fuel is either taxable or alternative, but not
   both. The statutory context of § 6426 provides sound reason to depart from
   butane’s common meaning.
           The rest is downhill. Section 4083 defines butane as a taxable fuel for
   purposes of the excise tax imposed at § 4081. If butane is a taxable fuel, it

           19
            Yates v. United States, 574 U.S. 528, 535 (2015) (referring to ordinary or natural
   meaning as “its dictionary definition”).
           20
              Schaeffler, 889 F.3d at 242 (“[T]he words of the statute . . . are assumed to carry
   their ordinary meaning.”).
           21
                FCC v. AT & T Inc., 562 U.S. 397, 403 (2011).
           22
              Yates, 574 U.S. at 537 (“[T]he plainness or ambiguity of statutory language is
   determined not only by reference to the language itself, but as well by the specific context
   in which that language is used, and the broader context of the statute as a whole.”
   (alterations omitted)).

                                                 9
Case: 20-20237       Document: 00516251473             Page: 10      Date Filed: 03/23/2022

                                        No. 20-20237

   cannot be an alternative fuel; therefore, butane is not an LPG under
   § 6426(d)(2).
           Vitol’s arguments and counterexamples do not unseat this conclusion.
   A.      Text and ordinary meaning
           To start off, Congress wrote the words “liquefied petroleum gas.”
   And the ordinary meaning of LPG, the parties agree, includes butane.
   Accordingly, unless one of the two assumption-defeating options (statutory
   definition or statutory context) overcomes it, the plain meaning of LPG
   includes butane under § 6426(d)(2). We conclude that no statutory
   definition overcomes ordinary meaning here, but statutory context does.
   B.      Statutory definition
           As for the first assumption-defeating possibility, a statutory definition,
   § 6426(d)(2) does not define the term “liquefied petroleum gas,” nor does a
   statutory definition appear in the other subsections of § 6426.
           But wait, the United States argues: We should treat LPG as if it’s
   statutorily defined because its common meaning “conflicts with the statutory
   or regulatory definition of related terms.” The United States provides no
   authority for the principle that a statutory term may be statutorily defined—
   and its common meaning disregarded—by virtue of its relationship with other
   terms that are statutorily defined. We need not adopt such a principle, or
   address the argument in the context of statutory definitions, because it is fully
   addressed below, in our analysis of statutory context. 23

           23
              See FCC, 562 U.S. at 404 (“The construction of statutory language often turns
   on context, which certainly may include the definitions of related words.” (citation
   omitted)).

                                             10
Case: 20-20237         Document: 00516251473               Page: 11        Date Filed: 03/23/2022

                                           No. 20-20237

   C.      Statutory context
           The crux of this case is whether the second assumption-defeating
   principle applies. Unless the “statutory text or context” provides “sound
   reason” for us “to disregard the ordinary meaning,” the assumption holds 24
   and the plain meaning of LPG (which includes butane) controls.
           The parties’ disagreement boils down simply. According to the
   United States, the term LPG must be interpreted consistently within its
   broader, mutually exclusive statutory scheme, which treats a given fuel, for
   tax purposes, as either an “alternative fuel” or a “taxable fuel.” According
   to Vitol, Congress did not expressly exclude butane from qualifying as an
   LPG under § 6426(d)(2), which would have been necessary because the
   statutory scheme permits a given fuel to be both a taxable fuel and an
   alternative fuel.
           We conclude that the statutory context of § 6426 forecloses Vitol’s
   position. The credits bestowed by § 6426 are structurally framed within the
   provisions imposing the taxes in the first instance: § 4081 (taxable fuel) and
   § 4041 (alternative fuel). In subpart (1), the credit under § 6426(d) is
   introduced as offsetting the alternative-fuel tax under § 4041. In subpart (2),
   the credit under § 6426(e) is introduced as offsetting the taxable-fuel tax
   under § 4083. The separate subparts suggest a cordoning off between taxable
   fuels and alternative fuels. That suggestion is confirmed by the tax-imposing

           24
              Id. at 407; accord Buttecali v. United States, 130 F.2d 172, 174 (5th Cir. 1942) (“In
   the construction of a statute, language is to be given its common and ordinary meaning
   unless it appears from the context that a different meaning plainly was intended by the
   enacting body.”); cf. also Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 569 (2012) (“To
   be sure, the word ‘interpreter’ can encompass persons who translate documents, but
   because that is not the ordinary meaning of the word, it does not control unless the context
   in which the word appears indicates that it does.”).

                                                 11
Case: 20-20237        Document: 00516251473               Page: 12       Date Filed: 03/23/2022

                                          No. 20-20237

   statutes § 6426(a) references, § 4081 and § 4041, which constitute the
   foundation for the § 6426 credits.
           For there to be a § 6426 credit, there must first be a § 4081 or § 4041
   tax. And those provisions leave no doubt that a given fuel is excluded from
   the tax regime for alternative fuels if it qualifies as a taxable fuel. The
   definition of “alternative fuels” in § 4041(a)(2)(A) is “any liquid[, ]other
   than gas oil, fuel oil, or any product taxable under section 4081.” 25 Two
   provisions emphasize this point, and those provisions appear immediately
   before and immediately after the regulation that defines alternative fuel. 26
   This makes clear that the credit arises from a dichotomous statutory scheme,
   in which a given fuel is ineligible to be taxed as “alternative” by virtue of
   being taxed as a taxable fuel.
           Nor does the structure of the credits permit a fuel to change identities
   simply when mixed with something else. The statute sets forth the definition
   of “alternative fuel” once, in § 6426(d). Subsection (d) provides a credit
   against a tax that is never imposed on a taxable fuel. And § 6426(e), providing
   the credit against the § 4081 taxable-fuel tax for mixtures of alternative fuel
   and taxable fuel, identifies which alternative fuels can render a fuel eligible
   for the credit by referring back to the same, dichotomous definition already
   set forth at subsection (d).

           25
             The term “special motor fuel” appears throughout the relevant statutes and
   regulations. The parties agree that this is a predecessor term for “alternative fuel.”
           26
              26 C.F.R. § 48.4041–8(f)(1) (“(1) Except as provided in paragraph . . . (2) of this
   section,” alternative fuel “means any liquid fuel, including—(i) Any liquefied petroleum
   gas (such as propane, butane, pentane, or mixtures of the same).”); id. § 48.4041–8(f)(2)
   (explaining that alternative fuel “does not include any product taxable under the provisions
   of section 4081”).

                                                12
Case: 20-20237         Document: 00516251473            Page: 13    Date Filed: 03/23/2022

                                         No. 20-20237

          In sum, the statutory context provides that a given fuel is either a
   taxable fuel or an alternative fuel, but not both.
          This rule applies to butane, excluding it from the definition of LPG
   under § 6426(d)(2) as a taxable fuel within the meaning of the statutory
   scheme. The parties started out agreeing that butane meets the definition of
   “taxable fuel” for purposes of this appeal. The parties’ briefing appears to
   differentiate between butane derived from petroleum, and butane derived
   from natural gas, but the parties have disclaimed any such arguments. In
   addition, to the extent Vitol is concerned about the effects of this appeal on
   the credit corresponding to alternative fuel that is not part of a mixture under
   § 6426(d)—beyond the credit Vitol seeks in this litigation, for alternative fuel
   mixed with taxable fuel under § 6426(e)—the fault lies with Vitol, who
   defines the issue certified for appeal as the definition of LPG under
   § 6426(d)(2), which governs both the neat and mixture credits.
          In any event, as provided at the beginning, “taxable fuels” is defined
   at § 4083 to include “gasoline,” which is further defined to include, “to the
   extent prescribed in regulations,” “any gasoline blend stock” that is a
   “petroleum product component of gasoline.” 27 And the regulations list
   butane as an example of a “[g]asoline blendstock[].” 28 As such, butane is
   classified as a taxable fuel within a statutory scheme structured as a
   dichotomy between taxable fuels and alternative fuels. Butane cannot be an
   LPG under § 6426(d)(2) or an alternative fuel for purposes of either § 6426
   credit. The statutory context of LPG—its subsidiary location in a scheme

          27
               26 U.S.C. § 4083(a)(2).
          28
            Again, the parties have not indicated that any difference between “blendstock”
   and “blend stock” is material, so we do not address it. See supra note 4.

                                              13
Case: 20-20237         Document: 00516251473            Page: 14   Date Filed: 03/23/2022

                                         No. 20-20237

   that treats a given fuel as taxable or alternative—provides “sound reason” to
   depart from the common meaning of LPG in this case. 29
          Vitol’s contrary arguments are unpersuasive. Vitol argues that § 4041
   expressly excludes fuels taxable under § 4083 to avoid taxing the same barrel
   twice, a risk that isn’t present in § 6246. But whatever its reasons for doing
   so, Congress imposed the tax using mutually exclusive language, as § 4041
   expressly excludes liquids “other than gas oil, fuel oil, or any product taxable
   under section 4081.” The credit expressly joins itself to that mutually
   exclusive framework, by referencing § 4081 and §4083, by tying distinct
   credits to each provision in separate subsections, and by providing a singular
   definition of “alternative fuel.”
          Vitol argues that the statutory scheme permits a fuel to be both taxable
   and alternative because the word “mixture” prevents a taxpayer from
   receiving a credit for using the same fuel as the taxable fuel and the alternative
   fuel in a product. Butane + butane ≠ mixture, Vitol says, whereas butane +
   different taxable fuel = mixture. So the definition of the alternative fuel (here,
   LPG) doesn’t need to do that work. As an example, Vitol points to renewable
   diesel, which the IRS deemed eligible for the neighboring § 6426(c)
   “biodiesel mixture” tax credit when mixed with a different taxable fuel, even
   though renewable diesel itself (as a diesel) is a taxable fuel under § 4081. 30
   But the better understanding, consistent with the otherwise mutually
   exclusive statutory scheme, is that renewable diesel is an exception to the
   rule, so Congress made the exception expressly. And the absence of such an
   exception for butane, when one exists for renewable diesel, is itself telling
   under expressio unius.

          29
               FCC, 562 U.S. at 407.
          30
               Notice 2007-37, 2007-1 C.B. 1003.

                                               14
Case: 20-20237      Document: 00516251473            Page: 15     Date Filed: 03/23/2022

                                      No. 20-20237

          Vitol also argues that other fuels are treated as both taxable fuels under
   § 4081 and alternative fuels under § 6426. Liquid fuels generated from the
   Fischer-Tropsch process, like gasoline, jet fuel, and diesel fuel, are
   alternative fuels under § 6426(d)(2), despite falling into the taxable-fuel
   categories of gasoline, kerosene, and diesel under § 4081. Amicus Valero
   raises the same argument as to hexane and pentane. This argument is
   abandoned, as the United States notes. 31 Regardless, as the United States
   explains, and Vitol does not counter on reply, Vitol fails to demonstrate that
   these identified examples are in fact taxable fuels under § 4081.
          Vitol invokes expressio unius, pointing to the “flush language” at the
   bottom of § 6426(d)(2) that identifies exceptions to that definition of
   alternative fuel. The list mentions “ethanol, methanol, biodiesel,” and fuels
   “derived from the production of paper or pulp,” but the list does not mention
   butane. As the United States explains, however, none of those substances is
   expressly defined as a taxable fuel, and butane is. In other words, butane was
   never eligible for the credit because it was a taxable fuel, so express language
   saying so would have been redundant. Vitol has another explanation:
   Congress intended to eliminate double tax credits. And if Congress meant to
   exclude from § 6426(d)(2) any product taxable under § 4081, Vitol says,
   Congress would have said so—as it expressly did in § 4041. But this ignores
   the foundational role of § 4041 in the statutory scheme, and § 6426’s
   subsidiary one. The credit is structurally dependent on the tax itself.
                                  V. Conclusion
          The plain language of the statute does not permit a given substance to
   be treated as both a taxable fuel and an alternative fuel, which is the treatment

          31
             Freeman v. Cty. of Bexar, 142 F.3d 848, 851 (5th Cir. 1998) (“[A] party who
   objects to the magistrate judge’s report waives legal arguments not made in the first
   instance before the magistrate judge.”).

                                            15
Case: 20-20237     Document: 00516251473          Page: 16   Date Filed: 03/23/2022

                                   No. 20-20237

   Vitol seeks for butane. Although the common meaning of LPG includes
   butane, that statutory term cannot be divorced from its statutory context.
   The consistent, mutually exclusive treatment of taxable and alternative fuels
   provides sound reason that the plain language of the statute departs from that
   common meaning. Therefore, we AFFIRM.

                                         16
Case: 20-20237         Document: 00516251473             Page: 17      Date Filed: 03/23/2022

                                          No. 20-20237

   Jennifer Walker Elrod, Circuit Judge, dissenting:
           This case comes down to ordinary meaning. The government starts
   with the deck stacked against it, as it concedes that if ordinary meaning
   controls, it loses. To win, then, the government has to show that Congress
   meant for a term to mean something other than what everyone reading it
   thinks it means. That task would be easy if the statute defined the term to
   mean something else, but here it does not. So the government is left to argue
   that it is “apparent” that the “statutory context” gives the term some other
   meaning. The government draws a complicated line of logical inferences to
   make that argument. But at the end of the day, it makes more sense that
   Congress meant what it said when it used a term that its primary audience
   would readily understand. 1 The majority, in my view, was too quick to
   discard the ordinary meaning, and thus I respectfully dissent.
                                               I.
           Start with the “straightforward and easy” route. 2 Vitol wants a tax
   credit for mixing butane with gasoline. Congress gives a tax credit for the sale
   or use of “alternative fuel mixture[s].” 3 According to that tax credit
   provision, the term “alternative fuel mixture” means “a mixture of

           1
             See David S. Louk, The Audiences of Statutes, 105 Cornell L. Rev. 137, 142 (2019)
   (“Too often, [the statutory] drafters’ imperative—to identify the audience(s) and provide
   an effective statutory scheme for the audience(s) to follow and implement—is lost in the
   judicial interpretive enterprise.”); cf. Office of the Legislative Counsel, U.S. House of
   Representatives, 104th Cong., HLC No. 104-1, House Legislative Counsel’s Manual on
   Drafting Style 5 (1995) (instructing legislators to “IDENTIFY THE AUDIENCE.—
   Decide who is supposed to get the message.”).
           2
             See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal
   Texts 70 (2012).
           3
               26 U.S.C. § 6426(d)–(e).

                                               17
Case: 20-20237          Document: 00516251473              Page: 18   Date Filed: 03/23/2022

                                            No. 20-20237

   alternative fuel . . . and taxable fuel.” 4 The term “alternative fuel” includes
   “liquefied petroleum gas” (LPG), 5 and the term “taxable fuel” includes
   “gasoline.” 6 So if butane is an LPG, Vitol deserves a tax credit for mixing
   butane with gasoline, because alternative fuel plus taxable fuel equals
   alternative fuel mixture tax credit. As everyone in the oil and gas industry
   knows, and as the United States readily concedes, butane is an LPG. Indeed,
   the government’s own witness testified that “butane is always an LPG.”
   That should be the end of it: Vitol gets a tax credit.
          That butane is a “taxable fuel” in a different regulation (and, by
   extension, a different provision of the Internal Revenue Code) does not
   change the analysis. Section 4081 places an excise tax on the extraction,
   transfer, or sale of various substances used as fuels. 7 A “taxable fuel”
   includes (among others) “gasoline”; 8 “gasoline” includes “gasoline blend
   stock”; 9 and a regulation defines butane as one such “gasoline
   blendstock[].” 10 What this boils down to: Congress giveth (through a tax
   credit under section 6426), and Congress taketh away (through an excise tax
   under sections 4081 and 4083) vis-à-vis the IRS (through regulations
   promulgated under 26 C.F.R. § 48.4081-1(c)(3)(i)(B)). Perhaps Congress
   had good reasons for doing so. 11 Or perhaps the left hand (Congress) knew

          4
               26 U.S.C. § 6426(e)(2).
          5
              26 U.S.C. § 6426(d)(2)(A).
          6
               26 U.S.C. § 4083(a)(1)(A).
          7
              26 U.S.C. § 4081(a)(1)(A)(i)–(iv).
          8
               26 U.S.C. § 4083(a)(1)(A).
          9
               26 U.S.C. § 4083(a)(2)(B).
          10
               26 C.F.R. § 48.4081-1(c)(3)(i)(B).
          11
               See infra Part III.A.

                                                   18
Case: 20-20237        Document: 00516251473              Page: 19       Date Filed: 03/23/2022

                                          No. 20-20237

   not what the right hand (the IRS) was doing. But we are not here to identify
   the most prudent tax policy. That is Congress’s job. 12 Here, Vitol may be
   taxed for its use of butane, but it also can get a tax credit for specific uses of
   the same. We need not delve any further.
                                                II.
           Now for the “gratuitously roundabout and complex” route taken by
   the majority opinion. 13 For us to deviate from the ordinary meaning, 14 the
   government has to establish that Congress either defined the term differently
   in the statute or that the “statutory context” makes it “apparent” that the
   term means something other than what everyone thinks it means. See
   Camacho v. Ford Motor Co., 993 F.3d 308, 312 (5th Cir. 2021); see also FCC v.
   AT&T, Inc., 562 U.S. 397, 407 (2011) (requiring a “sound reason in the
   statutory text or context to disregard the ordinary meaning”). The best

           12
              See Thomas v. Reeves, 961 F.3d 800, 825 (5th Cir. 2020) (en banc) (Willett, J.,
   concurring in the judgment) (“[L]anguage codified by lawmakers is like language coded by
   programmers. A computer programmer may write faulty code, but the code will perform
   precisely as written, regardless of what the programmer anticipated. Courts, no less than
   computers, are bound by what was typed . . . .”).
           13
             See Scalia & Garner at 70 (noting that although interpretation is not always
   “straightforward and easy,” “we should not make it gratuitously roundabout and
   complex”).
           14
              See Weatherly v. Pershing, L.L.C., 945 F.3d 915, 921 (5th Cir. 2019) (Willett, J.)
   (“Text is the alpha and omega of the interpretive process. Our precedent demands
   unswerving fidelity to statutory language, meaning we take lawmakers at their word and
   presume they meant what they said.” (internal quotations and citations omitted)); United
   States v. Lauderdale County, 914 F.3d 960, 964, 968 (5th Cir. 2019) (Elrod, J.) (noting that
   “statutory interpretation begins and, if possible, ends with the language of the statute” and
   that appeals to statutory purposes should not be credited if they involve “stretching the
   ordinary meaning of any words” (internal quotations and citations omitted)); Schaeffler v.
   United States, 889 F.3d 238, 240 (5th Cir. 2018) (King, J.) (“In the absence of any
   ambiguity, our examination is confined to the words of the statute.” (internal quotations
   and citations omitted)).

                                                19
Case: 20-20237     Document: 00516251473            Page: 20   Date Filed: 03/23/2022

                                     No. 20-20237

   evidence that Congress means something other than the ordinary meaning is
   that it specifically defined the term another way. See Digit. Realty Tr., Inc. v.
   Somers, 138 S. Ct. 767, 776–77 (2018). But it did not do so in the provision
   here. Thus, the United States has a heavy lift to show that the “statutory
   context” establishes that butane is not an alternative fuel under the
   applicable tax-credit provision even though everyone thinks of butane as an
   LPG.
          The government starts by presenting a dichotomy, one that all of its
   arguments flow from: Under the applicable provisions of the Internal
   Revenue Code, no fuel can be both a “taxable fuel” and an “alternative
   fuel.” That dichotomy, the government argues, comes from the excise-tax
   provisions found in 26 U.S.C. § 4041. Section 4041(a)(2) taxes “alternative
   fuels,” and under that section the term “alternative fuels” does not include
   any fuel taxable under section 4081. 26 U.S.C. § 4041(a)(2). Under the
   corresponding Department of Treasury regulations, butane is listed as a
   “gasoline blendstock,” so it is considered “gasoline,” which is a taxable fuel
   under section 4801. 26 C.F.R. § 48.4081-1(c)(3)(i)(B). Thus, under these
   provisions, butane is a “taxable fuel” but not an “alternative fuel.” The
   government’s next step is more of a leap. It argues that this mutually
   exclusive dichotomy from the excise-tax provisions applies just the same to
   the tax-credit provisions. Because butane is a “taxable fuel” under the
   excise-tax regulations, it cannot be an “alternative fuel” under the tax-credit
   statutory provision.
          To sum it up, the government argues that “liquefied petroleum gas,”
   a term that is universally understood to include butane, does not include
   butane in the tax-credit provisions in section 6426 because:

                                          20
Case: 20-20237     Document: 00516251473               Page: 21   Date Filed: 03/23/2022

                                      No. 20-20237

          (1) an (inapplicable) excise-tax provision, section 4041, says that
          “alternative fuels” under that provision do not include any “taxable
          fuels” under section 4081;
          (2) the excise-tax provision in section 4081 defines “taxable fuels” to
          include “gasoline”;
          (3) section 4083 then defines “gasoline” to include any “gasoline
          blend stock” as defined by applicable regulations;
          (4) the applicable regulations list butane as a “gasoline blendstock”;
          (5) butane is thus a “taxable fuel[]” and not an “alternative fuel[]”
          under the excise-tax provisions;
          (6) that same dichotomy applies across the applicable tax-credit
          provisions;
          (7) butane therefore cannot be an “alternative fuel” under the
          alternative fuel mixture tax credit provision; and so,
          (8) Vitol is not entitled to a tax credit.
          Assume for a moment that the ordinary meaning of “liquefied
   petroleum gas” is not universally understood by those in the industry to
   include “butane.” All else being equal, the above approach may make sense
   to lawyers. But given that the ordinary meaning is known by everyone in the
   industry, it must be clear that Congress did not use the word the way everyone
   in the industry understands it. The above approach is simply not enough to
   show that Congress clearly intended a different meaning.
                                          III.
          Despite the various leaps and stretches necessary to make this
   argument, the majority opinion adopts it wholesale. But to discard the
   ordinary meaning, we need a “sound reason,” not just something that sounds
   like a reason. See FCC, 562 U.S. at 407. All of the majority opinion’s
   conclusions hinge on the taxable fuel–alternative fuel dichotomy from the
   excise-tax provisions. But it is not at all “apparent” that such a dichotomy

                                           21
Case: 20-20237        Document: 00516251473               Page: 22        Date Filed: 03/23/2022

                                           No. 20-20237

   exists in the tax-credit provisions. See Camacho, 993 F.3d at 312 (“When
   faced with an undefined statutory term, our job is to apply the ‘common,
   ordinary meaning unless a more precise definition is apparent from the
   statutory context . . . .’” (quoting Fort Worth Transp. Auth. v. Rodriguez, 547
   S.W.3d 830, 838 (Tex. 2018))). And there are ample reasons to think it does
   not.
                                                A.
           At the most basic level, excise taxes and tax credits do two different
   things. We do not need to import the definition of “alternative fuels” from
   the excise-tax provision because the tax-credit provision already defines the
   term “alternative fuel” to include LPGs. If we were supposed to import the
   definition from the excise-tax provision, we could expect some kind of textual
   reference from one to the other. Congress did define the term “taxable
   fuel[s]” in the tax-credit provision (section 6426) by reference to the excise-
   tax provisions (sections 4081 and 4083). So we know Congress knows how
   to define by reference; it just did not do so with “alternative fuels.”
           We would not make the statutory scheme incoherent by recognizing
   that a term can take different meanings in different provisions. 15 When the

           15
              Indeed, the U.S. Code is rife with different definitions for “alternative fuel.” See
   26 U.S.C. § 30B(e)(4)(B) (defining “alternative fuel” as “compressed natural gas,
   liquefied natural gas, liquefied petroleum gas, hydrogen, and any liquid at least 85 percent
   of the volume of which consists of methanol”); 42 U.S.C. § 16091(a)(2) (defining
   “alternative fuel” as “liquefied natural gas, compressed natural gas, hydrogen, propane,
   or biofuels”); Id. § 6374(g)(2) (defining “alternative fuel” as “methanol, denatured
   ethanol, and other alcohols; mixtures containing 85 percent or more (or such other
   percentage, but not less than 70 percent, as determined by the Secretary, by rule, to provide
   for requirements relating to cold start, safety, or vehicle functions) by volume of methanol,
   denatured ethanol, and other alcohols with gasoline or other fuels; natural gas; liquefied
   petroleum gas; hydrogen; coal-derived liquid fuels; fuels (other than alcohol) derived from
   biological materials; electricity (including electricity from solar energy); and any other fuel

                                                 22
Case: 20-20237     Document: 00516251473            Page: 23   Date Filed: 03/23/2022

                                     No. 20-20237

   question is whether the use or sale of a substance is taxed, section 4041 tells
   us whether the substance is an “alternative fuel.” That section does not
   technically define “alternative fuel,” but it does identify an excise tax “on
   any liquid (other than gas oil, fuel oil, or any product taxable under section
   4081 . . .)” that, among other things, is sold or used for motor vehicle fuel.
   26 U.S.C. § 4041(a)(2). For section 4041, then, an “alternative fuel” that
   may be taxed primarily means a motor vehicle fuel not already taxed under
   section 4081. But when the question is one of tax credits, section 6426
   specifically defines “alternative fuel” differently—by a list of examples that
   includes LPGs. Id. § 6426(d)(2). Again, although section 6426 explicitly
   refers to section 4083 to define “taxable fuel[s],” id. § 6426(b)(4)(B), it does
   not refer to section 4041 to define “alternative fuel[s].” No conflict, and thus
   no reason to look elsewhere.
          Not only is there no conflict, but there are plausible reasons why
   Congress would treat butane as a “taxable fuel” in one section and an
   “alternative fuel” in another. The simplest explanation is that sections 4041
   and 4081 ensure that a wide swath of fuels may be taxed, and section 6426
   enters the picture next and provides offsetting credits for some specific fuels
   that Congress favors.      Perhaps some taxable fuels differ as to energy
   efficiency or environmental risk. Or maybe Congress wanted to incentivize
   the use of certain taxable fuels for their economic or ecological benefits
   compared to others. To put it plainly for this case: Congress may decide
   butane or other LPGs should be taxed, but also decide that the use of those

   the Secretary determines, by rule, is substantially not petroleum and would yield
   substantial energy security benefits and substantial environmental benefits”).

                                          23
Case: 20-20237         Document: 00516251473                Page: 24        Date Filed: 03/23/2022

                                            No. 20-20237

   substances, preferable as they are to gasoline, should be incentivized as an
   alternative. 16
           In any event, it is not up to us to decide whether Congress’s choices
   were right, or even to decide between a range of sensible options. Our task is
   to determine what the tax-credit provision means when it says “alternative
   fuel[s].” Congress specified a list that includes “liquefied petroleum gas.”
   Butane is a liquefied petroleum gas. Because it is not “apparent” that
   Congress meant anything else, we should look no further.
                                                  B.
           If Congress meant for the taxable fuel–alternative fuel dichotomy to
   apply to the tax-credit provisions, we might expect it to be hard to find other
   examples like butane which, depending on the circumstances, could be
   categorized as either a taxable substance or as a substance eligible for a tax
   credit. But examples abound. 17

           16
             Purveyors of butane and other LPGs indeed assert that the substances by their
   nature provide certain benefits. For background: Butane occurs naturally and can be
   extracted from natural gas deposits or through the oil refining process. When butane is
   extracted from those substances, it is liquefied, and the resulting product is an LPG. As
   the industry uses the term, “liquefied petroleum gas” is a category of hydrocarbon-based
   gasses derived from this extraction process.
           The most common LPGs—butane and propane—are much like each other on a
   molecular level, and those who produce with them claim they have a number of advantages
   over standard gasoline. First, they are abundant in the United States and, when added to
   the fuel supply, reduce overall gasoline consumption and dependence on foreign oil
   sources. Second, LPGs purportedly contain less carbon than gasoline, so they release less
   carbon into the atmosphere when burned for energy. Indeed, as between propane and
   butane, butane is the more efficient fuel, and it is also less volatile—that is, it is less likely
   to escape into the atmosphere during the combustion process. Butane also improves the
   cold-weather functioning of personal automobiles given its low vapor pressure (relative to
   propane), which helps with ignition.
           17
            The majority opinion briefly concludes this argument was “abandoned, as the
   United States notes.” Ante at 15. To support its position, the majority opinion points to

                                                  24
Case: 20-20237       Document: 00516251473              Page: 25      Date Filed: 03/23/2022

                                         No. 20-20237

           Consider ethyl tertiary butyl ether (ETBE). ETBE is listed as a
   “gasoline blendstock” by the regulations, which makes it a taxable fuel under
   the excise-tax provision. See 26 C.F.R. § 48.4081-1(c)(3)(i)(F). But despite
   its taxable-fuel status, it is also eligible for the alcohol fuel mixture credit,
   which applies to “a mixture of alcohol and a taxable fuel.” 26 U.S.C.
   § 6426(b)(3), (4). Another example is renewable diesel, which is a “diesel
   fuel,” making it a “taxable fuel” under the excise-tax provisions. See 26
   U.S.C. § 4083(a)(3)(A)(i). But renewable diesel is also treated as biodiesel,
   which qualifies for the biodiesel mixture credit in the tax-credit provisions.
   26 U.S.C. § 40A(f)(1) (directing that renewable diesel should be treated as
   biodiesel); 26 U.S.C. § 6426(c)(5). The majority opinion responds that
   “renewable diesel is an exception to the rule” because “Congress made the
   exception expressly.” Ante at 14. The same could be said about LPGs:
   Congress made the exception for LPGs expressly, and butane is by all
   accounts an LPG. Thus, even if the majority opinion is right about the
   dichotomous framework, LPGs are just as expressly an “exception” to the
   framework as renewable diesel fuel.
           These examples illustrate that Congress did not intend a harsh taxable
   fuel–alternative fuel dichotomy. Such a dichotomy cannot explain the
   statutes’ treatment of several substances in addition to butane; numerous

   Freeman v. County of Bexar, 142 F.3d 848, 851 (5th Cir. 1998), for the proposition that a
   party objecting to a magistrate judge’s report waives any legal arguments not made to the
   magistrate judge initially. Ante at 15 & n.31. A review of that case, however, shows that
   this court was referring to instances in which a party fails to assert a legal argument—an
   independent ground for victory. Freeman, 142 F.3d at 851–53. Vitol’s points about the
   statutory scheme’s treatment of other substances is not an independent legal argument or
   ground for relief. Those points are in service of the core legal argument which Vitol did
   raise to the magistrate judge: that butane is an LPG under section 6426(d). Vitol need not
   have raised and elaborated on every possible point in support of that argument before the
   magistrate judge.

                                              25
Case: 20-20237     Document: 00516251473           Page: 26    Date Filed: 03/23/2022

                                    No. 20-20237

   substances may be taxed, and be the basis for a tax credit, depending on their
   use. All things considered, it is not “apparent” that Congress intended the
   statutory context to override LPG’s ordinary meaning. Thus, there is no
   “sound reason” to depart from that meaning.
                           *             *                 *
          If text is the “alpha and the omega of the interpretive process,” Reed
   v. Taylor, 923 F.3d 411, 415 (5th Cir. 2019), ordinary meaning is the Star of
   Bethlehem. We should not stray from it unless Congress has made some
   other meaning abundantly clear. Here, virtually everyone agrees that the
   ordinary meaning of “liquefied petroleum gas” encompasses butane. At
   least in this case, the easy answer and the right answer are the same. Because
   the majority holds otherwise, I respectfully dissent.

                                         26