publication 510 (rev. december 1999)

ContentsImportant Changes for 2000 ............. 2

Introduction ........................................ 2

Excise Taxes Not Covered ................ 2

Registration for Certain Activities .... 2

Environmental Taxes ......................... 2Ozone-Depleting Chemicals ........... 2

Communications and AirTransportation Taxes .................. 4

Communications Tax ...................... 4Air Transportation Taxes ................ 5

Fuel Taxes ........................................... 7Registration Requirements ............. 7Gasoline .......................................... 7Gasohol ........................................... 10Diesel Fuel and Kerosene .............. 11Aviation Fuel ................................... 14Special Motor Fuels ........................ 15Compressed Natural Gas ............... 16Fuels Used on Inland Waterways .. 16Alcohol Sold as Fuel But Not Used

as Fuel ..................................... 17

Manufacturers Taxes ......................... 17Tax Liability ..................................... 18Exemptions ..................................... 18Credits or Refunds .......................... 18Sport Fishing Equipment ................ 19Bows ............................................... 19Arrow Components ......................... 19Coal ................................................. 19Tires ................................................ 20Gas Guzzler Tax ............................. 20Vaccines ......................................... 21

Retail Tax on Heavy Trucks, Trailers,and Tractors ................................ 21

Ship Passenger Tax ........................... 23

Luxury Tax .......................................... 24

Other Excise Taxes ............................ 25

Filing Form 720 .................................. 25

Paying the Taxes ................................ 26

Credits and Refunds .......................... 27

Tax on Wagering ................................ 27

Penalties and Interest ........................ 29

Examination and Appeal Procedures 29

Help With Unresolved Tax Problems 29

Rulings Program ................................ 29

Appendix A—ATF Forms .................. 29

Appendix B—Imported ProductsTable ............................................. 30

Appendix C—Model Certificates ...... 35

How To Get More Information .......... 43

Index .................................................... 44

Departmentof theTreasury

InternalRevenueService

Publication 510(Rev. December 1999)Cat. No. 15014I

Excise Taxesfor 2000

Important Changesfor 2000

Air transportation taxes. For transportationbeginning in 2000, the tax on transportationof persons by air is increased to $2.50 foreach domestic segment. The percentage taxremains at 7.5%.

For 2000, the tax on the use of interna-tional air travel facilities is $12.40 for botharrivals and departures. For air transportationbetween the continental United States andAlaska or Hawaii or between Alaska andHawaii, the tax on departures is $6.20.

Luxury tax. For 2000, the luxury tax on apassenger vehicle is 5% of the amount of thesales price that exceeds the base amount of$38,000. The base amount is increased forelectric vehicles and clean-fuel vehicles.

Vaccines. Any vaccine againststreptococcus pneumoniae is subject to thetax on vaccines. This applies to sales or de-liveries after December 17, 1999.

Electronic deposit requirement. For returnperiods beginning after 1999, you must useelectronic funds transfer to deposit taxes ifyou had to deposit more than $200,000 offederal depository taxes in the second pre-ceding calendar year. Once you meet thisrequirement, you have to continue makingdeposits electronically for all subsequentyears. For example, you must deposit taxeselectronically for return periods beginning inand after 2000 if you deposited more than$200,000 during 1998.

If you do not meet the $200,000 threshold,electronic deposits are voluntary, even if youwere required to deposit electronically undera previous threshold.

Photographs of missing children. TheInternal Revenue Service is a proud partnerwith the National Center for Missing and Ex-ploited Children. Photographs of missingchildren selected by the Center may appearin this publication on pages that would other-wise be blank. You can help bring thesechildren home by looking at the photographsand calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child.

IntroductionThis publication covers the excise taxes forwhich you may be liable during 2000. It cov-ers the excise taxes reported on Form 720,Quarterly Federal Excise Tax Return. It alsoprovides information on wagering activitiesreported on Forms 11–C and 730.

Useful ItemsYou may want to see:

Publication

� 378 Fuel Tax Credits and Refunds

� 509 Tax Calendars for 2000

Form (and Instructions)

� 11–C Occupational Tax and Registra-tion Return for Wagering

� 637 Application for Registration (ForCertain Excise Tax Activities)

� 720 Quarterly Federal Excise Tax Re-turn

� 730 Monthly Tax on Wagering

� 1363 Export Exemption Certificate

� 2290 Heavy Highway Vehicle Use TaxReturn

� 4136 Credit for Federal Tax Paid onFuels

� 6197 Gas Guzzler Tax

� 6627 Environmental Taxes

� 8849 Claim for Refund of Excise Taxes

See How To Get More Information nearthe end of this publication for informationabout getting publications and forms.

Excise TaxesNot CoveredIn addition to the taxes discussed in thispublication, you may have to use other formsto report certain other excise taxes.

These forms and taxes are as follows.

• IRS Form 2290: Heavy Highway VehicleUse Tax Return.

• ATF Form 5630.5: Alcohol, Tobacco.

• ATF Form 5630.7: Firearms.

• ATF Form 5300.26: Firearms.

If the taxes reported on IRS Form 2290 ap-pear to apply to you, see the following dis-cussion for information about them. If thetaxes reported on the ATF forms appear toapply to you, see Appendix A at the end ofthis publication for more information.

IRS Form 2290:Highway Use TaxYou report the federal excise tax on the useof certain trucks, truck tractors, and buses onpublic highways on Form 2290. The tax ap-plies to highway motor vehicles with taxablegross weights of 55,000 pounds or more.Vans, pickup trucks, panel trucks, and similartrucks generally are not subject to this tax.

A public highway is any road in the UnitedStates that is not a private roadway. This in-cludes federal, state, county, and city roads.Canadian and Mexican heavy vehicles oper-ated on U.S. highways may be liable for thistax. For more information, get the instructionsfor Form 2290.

Registration of vehicles. Generally, youmust prove that you paid your federal high-way use tax before registering your taxablevehicle with your state motor vehicle depart-ment. Generally, a copy of Schedule 1 ofForm 2290, stamped after payment and re-turned to you by the IRS, is acceptable proofof payment.

Registration forCertain ActivitiesYou must register for certain excise tax ac-tivities. See the instructions for Form 637 forthe list of activities for which you must regis-ter. Each business unit that has, or is requiredto have, a separate employer identificationnumber must register.

To apply for registration, complete Form637 and provide the information requested inits instructions. File the form with the districtdirector for the district in which your booksand records and principal place of businessare located.

If the district director approves your appli-cation, you will receive a Letter of Registrationshowing the activities for which you are reg-istered, the effective date of the registration,and your registration number. A copy of Form637 is not a Letter of Registration.

Environmental TaxesEnvironmental taxes are imposed on ozone-depleting chemicals. Figure the environ-mental tax on Form 6627. Enter the tax on theappropriate lines of Form 720. Attach Form6627 to Form 720 as a supporting schedule.

For environmental tax purposes, UnitedStates includes the 50 states, the District ofColumbia, the Commonwealth of Puerto Rico,any possession of the United States, theCommonwealth of the Northern Mariana Is-lands, the Trust Territory of the Pacific Is-lands, the continental shelf areas (applyingthe principles of section 638 of the InternalRevenue Code), and foreign trade zones.No one is exempt from the environmentaltaxes, including the federal government, stateand local governments, Indian tribal govern-ments, and nonprofit educational organiza-tions.

Ozone-DepletingChemicals (ODCs)Tax is imposed on chemicals that deplete theozone layer and on imported products con-taining or manufactured with these chemicals.In addition, a floor stocks tax is imposed onODCs held on January 1 by any person (otherthan the manufacturer or importer of theODCs) for sale or for use in further manufac-ture.

Taxable ODCsTax is imposed on an ODC when it is firstused or sold by its manufacturer or importer.The manufacturer or importer is liable for thetax.

For the taxable ODCs and tax rates, seethe Form 6627 instructions.

Use of ODCs. You use an ODC if you put itinto service in a trade or business or for pro-duction of income. An ODC also is used if youuse it in the making of an article, includingincorporation into the article, chemical trans-formation, or release into the air. The loss,destruction, packaging, repackaging, orwarehousing of ODCs is not a use of theODC.

The creation of a mixture is treated as theuse of the ODC contained in the mixture. An

ODC is contained in a mixture only if thechemical identity of the ODC is not changed.Generally, tax is imposed when the mixtureis created and not on its sale or use. How-ever, you can choose to have the tax imposedon its sale or use by checking the appropriatebox in Part I of Form 6627. You can revokethis choice only with IRS consent.

The creation of a mixture for export or foruse as a feedstock is not a taxable use of theODCs contained in the mixture.

Exceptions. All of the following are exemptfrom the tax on ODCs.

• Metered-dose inhalers.

• Recycled ODCs.

• Exported ODCs.

• ODCs used as feedstock.

Metered-dose inhalers. There is no taxon ODCs used or sold for use as propellantsin metered-dose inhalers. For a sale to benontaxable, the manufacturer or importermust obtain an exemption certificate from thepurchaser that the manufacturer or importerrelies on in good faith. The certificate mustbe in substantially the form set forth in section52.4682–2(d)(5) of the regulations.

Recycled. There is no tax on any ODCdiverted or recovered in the United States aspart of a recycling process (and not as partof the original manufacturing or productionprocess). There is no tax on recycledHalon-1301 or recycled Halon-2402 importedfrom a country that has signed the MontrealProtocol on Substances that Deplete theOzone Layer (Montreal Protocol).

The Montreal Protocol is administered bythe United Nations (U.N.). To determine if acountry has signed the Montreal Protocol,contact the U.N. The Internet address iswww.un.org/Depts/Treaty.

Export. Generally, there is no tax onODCs sold for export if certain requirementsare met. For a sale to be nontaxable, theseller and purchaser must be registered. Theseller must obtain an exemption certificatefrom the purchaser that the seller relies on ingood faith. The certificate must be in sub-stantially the form set forth in section52.4682–5(d)(3) of the regulations. The taxbenefit of this exemption is limited. For moreinformation, see section 52.4682–5 of theregulations.

Feedstock. There is no tax on ODCs soldfor use or used as a feedstock. An ODC isused as a feedstock only if the ODC is entirelyconsumed in the manufacture of anotherchemical. The transformation of an ODC intoone or more new compounds qualifies, butuse of an ODC in a mixture does not qualify.

For a sale to be nontaxable, you mustobtain an exemption certificate that you relyon in good faith from the purchaser. The ex-emption certificate must be in substantiallythe form set forth in section 52.4682–2(d)(2)of the regulations. Keep the certificate withyour records.

Credits or RefundsA credit or refund (without interest) of tax onODCs may be claimed in the following situ-ations.

• If taxed ODCs are used as a propellantin a metered-dose inhaler, then the per-son who used the ODC as a propellantmay file a claim.

• If taxed ODCs are exported, then themanufacturer may file a claim.

• If taxed ODCs are used as a feedstock,then the person who used the ODC mayfile a claim.

For general information about credits and re-funds, see Credits and Refunds, later.

Conditions to allowance for ODCs ex-ported. To claim a credit or refund for ODCsthat are exported, the manufacturer orimporter must have repaid or agreed to repaythe tax to the exporter, or obtained theexporter's written consent to allowance of thecredit or refund.

Imported Taxable ProductsTax is imposed on imported products con-taining or manufactured with ODCs when theproduct is first sold or used by its importer.The importer is liable for the tax. A product issubject to tax if it is entered into the UnitedStates for consumption, use, or warehousingand is listed in the Imported Products Table,discussed later.

The tax is based on the weight of theODCs used in the manufacture of the product.Use either of the following to figure the ODCweight.

• The actual weight of each ODC used asa material in manufacturing the product.

• The ODC weight listed for the product inthe Imported Products Table, discussedlater.

However, if you cannot determine the ac-tual ODC weight and the table does not listan ODC weight for the product, the rate of taxis 1% of the entry value of the product.

Use of imported products. You use an im-ported product if you put it into service in atrade or business or for production of incomeor use it in the making of an article, includingincorporation into the article. The loss, de-struction, packaging, repackaging, ware-housing, or repair of an imported product isnot a use of that product.

Entry as use. The importer may chooseto treat the entry of a product into the UnitedStates as the use of the product. Tax is im-posed on the date of entry. The choice ap-plies to all imported taxable products that youown and have not used when you make thechoice and all later entries. Make the choiceby checking the box in Part II of Form 6627.The choice is effective as of the beginning ofthe calendar quarter to which the Form 6627applies. You can revoke this choice only withIRS consent.

Sale of article incorporating importedproduct. The importer may treat the sale ofan article manufactured or assembled in theUnited States as the first sale or use of animported taxable product incorporated in thatarticle if both the following apply.

• The importer has consistently treated thesale of similar items as the first sale oruse of similar taxable imported products.

• The importer has not chosen to treatentry into the United States as use of theproduct.

Imported Products Table. The ImportedProducts Table appears in Appendix B at theend of this publication. Each listing in the ta-

ble identifies a product by name and includesonly products that are described by thatname. Most listings identify a product by bothname and Harmonized Tariff Schedule (HTS)heading. In those cases, a product is includedin that listing only if the product is describedby that name and the rate of duty on theproduct is determined by reference to thatHTS heading. A product is included in thelisting even if it is manufactured with or con-tains a different ODC than the one specifiedin the table.

Part II of the table lists electronic itemsthat are not included within any other list inthe table. An imported product is included inthis list only if the product meets one of thefollowing tests.

1) It is an electronic component whose op-eration involves the use of nonmechan-ical amplification or switching devicessuch as tubes, transistors, and inte-grated circuits.

2) It contains components described in (1),above, and more than 15% of the costof the product is from these components.

These components do not include passiveelectrical devices, such as resistors andcapacitors. Items such as screws, nuts, bolts,plastic parts, and similar specially fabricatedparts that may be used to construct an elec-tronic item are not themselves included in thelisting for electronic items.

Rules for listing products. Products arelisted in the table according to the followingrules.

1) A product is listed in Part I of the tableif it is a mixture containing ODCs.

2) A product is listed in Part II of the tableif the Commissioner has determined thatthe ODCs used as materials in themanufacture of the product under thepredominant method are used for pur-poses of refrigeration or air conditioning,creating an aerosol or foam, or manu-facturing electronic components.

3) A product is listed in Part III of the tableif the Commissioner has determined thatthe product meets both the followingtests.

a) It is not an imported taxable prod-uct.

b) It would otherwise be includedwithin a list in Part II of the table.

For example, floppy disk drive units arelisted in Part III because they are not importedtaxable products and would have been in-cluded in the Part II list for electronic itemsnot specifically identified, but for their listingin Part III.

The table gives the ODC weight in poundsper single unit of product unless otherwisespecified.

Modifying the table. A manufacturer orimporter of a product may request the IRS toadd a product and its ODC weight to the ta-ble. They also may request the IRS to removea product from the table, or change or specifythe ODC weight of a product. The requestmust include all the following information foreach product to be modified.

• The name of the product.

• The HTS heading or subheading.

• The type of modification requested.

• The ODC weight that should be specified(unless the product is being removed).

• The data supporting the request.

Include your name, address, taxpayeridentification number, and principalplace of business in your request.

Send your request to the following address.

Internal Revenue ServiceP.O. Box 7604Ben Franklin StationAttn: CC:DOM:CORP:R (ImportedProducts Table)Room 5226Washington, DC 20044

Floor Stocks TaxTax is imposed on any ODC held (other thanby the manufacturer or importer of the ODC)on January 1 for sale or use in further manu-facturing. The person holding title (as deter-mined under local law) to the ODCs is liablefor the tax, whether or not delivery has beenmade.

These chemicals are taxable without re-gard to the type or size of storage containerin which the ODCs are held. The tax mayapply to an ODC whether it is in a 14-ouncecan or a 30-pound tank.

You are liable for the floor stocks tax if onJanuary 1 you hold any of the following.

1) At least 400 pounds of ODCs subject totax and not described in item (2) or (3).

2) At least 50 pounds of ODCs that arehalons subject to tax.

3) At least 1,000 pounds of ODCs that aremethyl chloroform subject to tax.

If you are liable for the tax, prepare aninventory on January 1 of the taxable ODCsheld on that date for sale or for use in furthermanufacturing. You must pay this floor stockstax by June 30 of each year.

For the tax rates, see the Form 6627 in-structions.

The floor stocks tax is not imposed on anyof the following ODCs.

• ODCs mixed with other ingredients thatcontribute to the accomplishment of thepurpose for which the mixture will beused, unless the mixture contains onlyODCs and one or more stabilizers.

• ODCs contained in a manufactured arti-cle.

• ODCs that have been reclaimed or recy-cled.

• ODCs sold for use as a feedstock.

• ODCs sold for export.

• ODCs sold for use as a propellant in ametered-dose inhaler.

Communications andAir TransportationTaxesExcise taxes are imposed on amounts paidby the users of certain facilities and services.If you receive any payment on which tax isimposed, you are required to collect the tax,

file returns, and pay the tax to the govern-ment. Ordinarily, the tax attaches at the timethe payment is made.

If you fail to collect and pay over the taxes,you may be liable for the trust fund recoverypenalty. See Penalties and Interest, later.

Communications TaxA 3% tax is imposed on amounts paid for allthe following communications services.

• Local telephone service.

• Toll telephone service.

• Teletypewriter exchange service.

Local telephone service. This means ac-cess to a local telephone system and theprivilege of telephonic quality communicationwith most people who are part of the systemand any facility or services provided in con-nection with the service. The tax applies tolease payments for certain customer prem-ises equipment (CPE) even though the lessordoes not also provide access to a local tele-communications system.

Private communication service. Privatecommunication service is not local telephoneservice. Private communication service in-cludes accessory-type services provided inconnection with a Centrex, PBX, or othersimilar system for dual use accessory equip-ment. However, the charge for the servicemust be stated separately from the charge forthe basic system, and the accessory mustfunction, in whole or in part, in connection withintercommunication among the subscriber'sstations.

Toll telephone service. This means a tele-phonic quality communication for which a tollis charged that varies with the elapsed trans-mission time of each communication. The tollmust be paid within the United States. It alsoincludes a long distance service that entitlesthe subscriber to make unlimited calls(sometimes limited as to the maximum num-ber of hours) within a certain area for a flatcharge. Microwave relay service used for thetransmission of television programs and notfor telephonic communication is not a tolltelephone service.

Teletypewriter exchange service. Thismeans access from a teletypewriter or otherdata station to a teletypewriter exchangesystem and the privilege of intercommuni-cation by that station with most persons hav-ing teletypewriter or other data stations in thesame exchange system.

Figuring the tax. The tax is based on thesum of all charges for local or toll telephoneservice included in the bill. However, if the billgroups individual items for billing and taxpurposes, the tax is based on the sum of theindividual items within that group. The tax onthe remaining items not included in any groupis based on the charge for each item sepa-rately. Do not include in the tax base stateor local taxes (such as a retail sales or excisetax) that are separately stated on the taxpay-er's bill.

If the tax on toll telephone service is paidby inserting coins in coin-operated tele-phones, figure the tax to the nearest multipleof 5 cents. When the tax is midway between5-cent multiples, the next higher multiple ap-plies.

Prepaid telephone cards. A prepaidtelephone card is any card or any other simi-lar arrangement that allows its holder to getlocal or toll telephone service and pay forthose services in advance. The tax is im-posed when the card is transferred by a tele-communications carrier to any person who isnot a telecommunications carrier. The tax isbased on the face amount of the card. If theface amount is not a dollar amount, the faceamount will be determined under the regu-lations for section 4251 of the Internal Reve-nue Code.

ExemptionsPayments for certain services or from certainusers are exempt from the communicationstax.

Installation charges. The tax does not applyto payments received for the installation ofany instrument, wire, pole, switchboard, ap-paratus, or equipment. The tax does apply topayments for the repair or replacement ofthose items, incidental to ordinary mainte-nance.

Answering services. The tax does not applyto amounts paid for a private line, an an-swering service, and a one-way paging ormessage service if they do not provide ac-cess to a local telephone system and theprivilege of telephonic communication as partof the local telephone system.

Mobile radio telephone service. The taxdoes not apply to payments for a two-wayradio service that does not provide access toa local telephone system.

Coin-operated telephones. Paymentsmade for services by inserting coins in coin-operated telephones available to the publicare not subject to tax for local telephone ser-vice. They also are not subject to tax for tolltelephone service if the charge is less than25 cents. But the tax applies if the coin-operated telephone service is furnished for aguaranteed amount. Figure the tax on theamount paid under the guarantee plus anyfixed monthly or other periodic charge.

Telephone-operated security systems.The tax does not apply to amounts paid fortelephones used only to originate calls to alimited number of telephone stations for se-curity entry into a building. In addition, the taxdoes not apply to any amounts paid for rentedcommunication equipment used in the secu-rity system.

News services and radio broadcasts ofnews and sporting events. The tax on tolltelephone service and teletypewriter ex-change service does not apply to news ser-vices and radio broadcasts of news andsporting events. This exemption applies topayments received for messages from onemember of the news media to another mem-ber (or to or from their bona fide correspond-ents). However, the tax applies to local tele-phone services and related charges. The taxdoes not apply to charges for services dealingexclusively with the collection or dissem-ination of news for the public press or radioor television broadcasting. It also does notapply to charges for services used in the col-lection or dissemination of news by a newsticker service furnishing a general news ser-vice similar to that of the public press. For the

exemption to apply, the charge for these ser-vices or facilities must be billed in writing tothe person paying for the service and thatperson must certify in writing that the servicesare used for one of these exempt purposes.However, toll telephone service in connectionwith celebrities or special guests on talkshows is subject to tax.

Common carriers and communicationscompanies. The tax on toll telephone ser-vice does not apply to WATS (wide areatelephone service) used by common carriers,telephone and telegraph companies, or radiobroadcasting stations or networks in theirbusiness. A common carrier is one holdingitself out to the public as engaged in thebusiness of transportation of persons orproperty for compensation, offering its ser-vices to the public generally.

Military personnel serving in a combatzone. The tax on toll telephone services doesnot apply to telephone calls originating in acombat zone that are made by members ofthe U.S. Armed Forces serving there if theperson receiving payment for the call receivesa properly executed certificate of exemption.The signed and dated exemption certificatemust contain all the following information.

• The name of the member of the U.S.Armed Forces performing services in thecombat zone who originated the call.

• The toll charges, point of origin, andname of carrier.

• A statement that the charges are exemptfrom tax under section 4253(d) of theInternal Revenue Code.

• The name and address of the telephonesubscriber.

This exemption also applies to members ofthe Armed Forces serving in a qualified haz-ardous duty area. A qualified hazardous dutyarea is either of the following areas.

• Bosnia and Herzegovina, Croatia, orMacedonia, effective November 21,1995.

• Federal Republic of Yugoslavia(Serbia/Montenegro), Albania, theAdriatic Sea, and the Ionian Sea northof the 39th parallel, effective March 24,1999.

A qualified hazardous duty area includes anarea only while the special pay provision is ineffect for that area.

International organizations and the Amer-ican Red Cross. The tax does not apply tocommunication services furnished to aninternational organization or to the AmericanNational Red Cross.

Nonprofit hospitals. The tax does not applyto telephone services furnished to incometax-exempt nonprofit hospitals for their use.Also, the tax does not apply to amounts paidby these hospitals to provide local telephoneservice in the homes of its personnel whomust be reached during their off-duty hours.

Nonprofit educational organizations. Thetax does not apply to payments received forservices and facilities furnished to a nonprofiteducational organization for its use. Anonprofit educational organization is one thatsatisfies all the following requirements.

• It normally maintains a regular faculty andcurriculum.

• It normally has a regularly enrolled bodyof pupils or students in attendance at theplace where its educational activities areregularly carried on.

• It is exempt from income tax under sec-tion 501(a) of the Internal Revenue Code.

This includes a school operated by an or-ganization that is exempt under section501(c)(3) of the Internal Revenue Code if theschool meets the above qualifications.

Federal, state, and local government. Thetax does not apply to communication servicesprovided to the government of the UnitedStates, the government of any state or itspolitical subdivisions, the District of Columbia,or the United Nations. Treat an Indian tribalgovernment as a state for the exemptionfrom the communications tax only if the ser-vices involve the exercise of an essentialtribal government function.

Exemption certificate. Any form of ex-emption certificate will be acceptable if it in-cludes all the information required by thepertinent sections of the Internal RevenueCode and Regulations. File the certificate withthe provider of the communication services.

The following users that are exempt fromthe communications tax do not have to filean annual exemption certificate after theyhave filed the initial certificate of exemptionfrom the communications tax.

• The American National Red Cross andother international organizations.

• Nonprofit hospitals.

• Nonprofit educational organizations.

• State and local governments.

The federal government does not have tofile any exemption certificate.

All other organizations must furnish ex-emption certificates when required.

Credits or RefundsIf tax is collected and paid over for certainservices or users exempt from the communi-cations tax, the collector may claim a creditor refund if it has repaid the tax to the personfrom whom the tax was collected or obtainedthe consent of that person to the allowanceof the credit or refund. Alternatively, the per-son who paid the tax may claim a refund byfiling Form 8849.

Air Transportation TaxesTaxes are imposed on amounts paid for allthe following services.

• Transportation of persons by air.

• Use of international air travel facilities.

• Transportation of property by air.

Transportation ofPersons by AirThe tax on transportation of persons by air ismade up of the following two parts.

• The percentage tax.

• The domestic-segment tax.

However, see Rural airports, later.

Percentage tax. A tax of 7.5% applies toamounts paid for taxable transportation ofpersons by air. Amounts paid for transporta-tion include charges for layover or waitingtime and movement of aircraft in deadheadservice.

The percentage tax applies to any amountpaid (in cash or in kind) to an air carrier (orany related person) for the right to award airtravel benefits. These include mileage awardsand other reductions in the cost of any trans-portation of persons by air. This applies tofrequent-flyer miles purchased by credit cardcompanies, telephone companies, restau-rants, hotels, and other businesses.

Domestic-segment tax. The domestic-segment tax is a flat dollar amount for eachsegment of taxable transportation for whichan amount is paid. However, see Rural air-ports, later. A segment is a single takeoff anda single landing. The domestic-segment taxrate depends on when the segment begins.The amounts and the periods to which theyapply are listed in the following table.

After 2002, the domestic-segment tax will beadjusted for inflation.

Example. In January 2000, Frank Jonespays $220 to a commercial airline for a flightin January from Washington to Chicago withan intermediate stop in Cleveland. The flightcomprises two segments. The price includesthe $200 fare and $20 excise tax [($200 ×7.5%) + (2 × $2.50)] for which Frank is liable.The airline collects the tax from Frank andpays it to the government.

Rural airports. If a segment is to or froma rural airport, the domestic-segment tax doesnot apply. An airport is a rural airport for acalendar year if it satisfies both the followingrequirements.

1) Fewer than 100,000 commercial pas-sengers departed from the airport duringthe second preceding calendar year.

2) The airport:

a) Is not located within 75 miles ofanother airport from which 100,000or more commercial passengersdeparted during the second pre-ceding calendar year, or

b) Was receiving essential air servicesubsidies as of August 5, 1997.

Revenue Procedure 98–18, in CumulativeBulletin 1998–1, contains a list of rural air-ports.

Taxable transportation. Taxable transpor-tation is transportation by air that meets eitherof the following tests.

• It begins and ends either in the UnitedStates or at any place in Canada orMexico not more than 225 miles from thenearest point on the continental UnitedStates boundary (this is the225-mile-zone rule).

• It is directly or indirectly from one port orstation in the United States to another inthe United States, but only if it is not a

Time Period TaxJanuary 1, 2000—December 31, 2000 ......... $2.50January 1, 2001—December 31, 2001 ......... $2.75January 1, 2002—December 31, 2002 ......... $3.00

part of uninterrupted international airtransportation, discussed later.

Round trip. A round trip is consideredtwo separate trips. The first trip is from thepoint of departure to the destination. Thesecond trip is the return trip from that desti-nation.

Uninterrupted international air trans-portation. This means transportation entirelyby air that does not begin and end in theUnited States or in the 225-mile zone if thereis not more than a 12-hour scheduled intervalbetween arrival and departure at any stationin the United States. For a special rule thatapplies to military personnel, see Exemptionsfrom tax, later.

Transportation between the continentalU.S. and Alaska or Hawaii. The tax ontransportation of persons by air does not ap-ply to the part of the trip between the pointat which the route of transportation leaves orenters the continental United States (or a portor station in the 225-mile zone) and the pointat which it enters or leaves Hawaii or Alaska.Leaving or entering occurs when the route ofthe transportation passes over either theUnited States border or a point 3 nauticalmiles (3.45 statute miles) from low tide on thecoast line, or when it leaves a port or stationin the 225-mile zone. Therefore, this trans-portation is subject to the percentage tax onthe part of the trip in U.S. airspace, thedomestic-segment tax for each domesticsegment, and the tax on the use of interna-tional air travel facilities, discussed later.

Transportation within Alaska or Hawaii.The tax on transportation of persons by airapplies to the entire fare paid in the case offlights between any of the Hawaiian Islands,and between any ports or stations in theAleutian Islands or other ports or stationselsewhere in Alaska. The tax applies eventhough parts of the flights may be over inter-national waters or over Canada, if no pointon the direct line of transportation betweenthe ports or stations is more than 225 milesfrom the United States (Hawaii or Alaska).

Package tours. The air transportation taxesapply to “complimentary” air transportationfurnished solely to participants in packageholiday tours. The amount paid for thesepackage tours includes a charge for airtransportation even though it may be adver-tised as “free.” This rule also applies to the taxon the use of international air travel facilities,discussed later.

Liability for tax. The person paying for tax-able transportation is liable for the tax and,ordinarily, the person receiving the paymentcollects the tax, files the returns, and pays thetax to the government. However, the tax mustbe collected by the person furnishing the ini-tial transportation provided for under a pre-paid order, exchange order, or similar orderpaid for outside the United States.

A travel agency that is an independentbroker and sells tours on aircraft that it char-ters is required to collect the transportationtax, file the returns, and pay the tax to thegovernment. However, a travel agency thatsells tours as the agent of an airline mustcollect the tax and remit it to the airline for thefiling of returns and for the payment of the taxto the government.

The fact that aircraft may not use publicor commercial airports in taking off and land-ing has no effect on the tax. But see Certainhelicopter uses, later.

For taxable transportation that begins andends in the United States, the tax applies re-gardless of whether the payment is made inor outside the United States.

Secondary liability. If the tax is not paidwhen payment for the transportation is made,the air carrier providing the initial segment ofthe transportation that begins or ends in theUnited States becomes liable for the tax.

Exemptions from tax. The tax on transpor-tation of persons by air does not apply in thefollowing situations.

Special rule for military personnel.When traveling in uniform at their own ex-pense, United States military personnel onauthorized leave are deemed to be travelingin uninterrupted international air transporta-tion (defined earlier) even if the scheduledinterval between arrival and departure at anystation in the United States is actually morethan 12 hours. However, such personnel mustbuy their tickets within 12 hours after landingat the first domestic airport and accept thefirst available accommodation of the typecalled for by their tickets. The trip must beginor end outside the United States and the225-mile zone.

Certain helicopter uses. The tax doesnot apply to air transportation by helicopter ifthe helicopter is used for any of the followingpurposes.

1) Transporting individuals, equipment, orsupplies in the exploration for, or thedevelopment or removal of, hard min-erals, oil, or gas.

2) Planting, cultivating, cutting, transport-ing, or caring for trees (including loggingoperations).

3) Providing transportation for emergencymedical services.

However, for items (1) and (2), the taxapplies if the helicopter takes off from, orlands at, a facility eligible for assistance underthe Airport and Airway Development Act of1970, or otherwise uses services providedunder section 44509 or 44913(b) or sub-chapter I of chapter 471 of title 49, UnitedStates Code, during such use. For item (1),treat each flight segment as a separate flight.

Fixed-wing air ambulance. The tax doesnot apply to air transportation by fixed-wingaircraft if used for emergency medical trans-portation. The aircraft must be equipped forand exclusively dedicated on that flight toacute care emergency medical services.

Skydiving. The tax does not apply to anyair transportation exclusively for the purposeof skydiving.

Bonus tickets. The tax does not applyto free bonus tickets issued by an airlinecompany to its customers who have satisfiedall requirements to qualify for the bonus tick-ets. However, the tax applies to amounts paidby customers for advance bonus tickets whencustomers have traveled insufficient mileageto fully qualify for the free advance bonustickets.

Use of InternationalAir Travel FacilitiesA $12.40 tax is imposed on amounts paid(whether in or outside the United States) forinternational flights that begin or end in theUnited States. This tax does not apply if allof the transportation is subject to the per-centage tax, discussed earlier.

For a domestic segment that begins orends in Alaska or Hawaii, a $6.20 tax appliesto departures.

Transportation ofProperty by AirA tax of 6.25% is imposed on amounts paid(whether in or outside the United States) fortransportation of property by air. The fact thatthe aircraft may not use public or commercialairports in taking off and landing has no effecton the tax. The tax applies only to amountspaid to a person engaged in the business oftransporting property by air for hire.

The tax applies only to transportation (in-cluding layover time and movement of aircraftin deadhead service) that begins and endsin the United States. Thus, the tax does notapply to transportation of property by air thatbegins or ends outside the United States.

The tax does not apply to amounts paidfor cropdusting, aerial firefighting service, oruse of helicopters in construction to set heat-ing and air conditioning units on roofs ofbuildings, to dismantle tower cranes, and toaid in construction of power lines and ski lifts.

The tax does not apply to payments fortransportation of property by air in the courseof uninterrupted exportation (including toUnited States possessions). Get Form 1363,Export Exemption Certificate, for more de-tails.

The tax does not apply to air transporta-tion by helicopter or fixed-wing aircraft for thepurpose of providing emergency medicaltransportation. The fixed-wing aircraft mustbe equipped for and exclusively dedicated onthat flight to acute care emergency medicalservices.

The tax does not apply to any air trans-portation exclusively for the purpose ofskydiving.

Alaska and Hawaii. For transportation ofproperty to and from Alaska and Hawaii, thetax in general does not apply to the portionof the transportation that is entirely outsidethe continental United States (and the225-mile zone). But the tax applies to flightsbetween ports or stations in Alaska and theAleutian Islands, as well as between ports orstations in Hawaii. The tax applies eventhough parts of the flights may be over inter-national waters or over Canada, if no pointon a line drawn from where the route oftransportation leaves the United States(Alaska) to where it reenters the UnitedStates (Alaska) is more than 225 miles fromthe United States.

Liability for tax. The person paying for tax-able transportation is liable for the tax and,ordinarily, the person engaged in the busi-ness of transporting property by air for hirereceiving the payment, collects the tax, filesthe returns, and pays the tax to the govern-ment.

If tax is not included in a payment madeoutside the United States, the person fur-nishing the last segment of taxable transpor-tation collects the tax from the person towhom the property is delivered in the UnitedStates.

Baggage. Regular and excess baggage ac-companying a passenger on an aircraft oper-ated on an established line is not propertyunder these rules.

Mixed load of persons and property. If youreceive a flat amount for air transportation ofa mixed load of persons and property, allo-cate the payment between the amount sub-ject to the tax on transportation of personsand the amount subject to the tax on trans-portation of property. Your allocation must bereasonable and supported by adequate rec-ords.

Special Rules onTransportation TaxesIn certain circumstances, the taxes on trans-portation of persons and property by air donot apply to amounts paid for those services.

Aircraft used by affiliated corporations.The taxes do not apply to payments receivedby one member of an affiliated group of cor-porations from another member for servicesfurnished in connection with the use of anaircraft. However, the aircraft must be ownedor leased by a member of the affiliated groupand cannot be available for hire by a non-member of the affiliated group. Determinewhether an aircraft is available for hire by anonmember of an affiliated group on a flight-by-flight basis.

An affiliated group of corporations, for thisrule, is any group of corporations connectedwith a common parent corporation through80% or more stock ownership.

Small aircraft. The taxes do not apply totransportation furnished by an aircraft havinga maximum certificated takeoff weight of6,000 pounds or less. However, the taxes doapply if the aircraft is operated on an estab-lished line. “Operated on an established line”means the aircraft operates with some degreeof regularity between definite points.

Consider aircraft operated on a charterbasis between two cities that are served bythat carrier on a regularly scheduled basis tobe operated on an established line.

Credits or RefundsIf tax is collected and paid over for air trans-portation that is not taxable air transportation,the collector may claim a credit or refund if ithas repaid the tax to the person from whomthe tax was collected or obtained the consentof that person to the allowance of the creditor refund. Alternatively, the person who paidthe tax may claim a refund.

Fuel TaxesExcise taxes are imposed on all the followingfuels.

• Gasoline.

• Gasohol.

• Diesel fuel.

• Kerosene.

• Aviation fuel other than gasoline.

• Special motor fuels.

• Compressed natural gas.

• Fuels used in commercial transportationon inland waterways.

Registration RequirementsThe following discussion applies to registra-tion for purposes of the excise taxes on gas-oline, diesel fuel, and kerosene. The termsused in this discussion are explained later.See Registration for Certain Activities, earlier,for more information about registration.

Persons that must register. You must reg-ister if you are any of the following persons.

• A blender.

• An enterer.

• A refiner.

• A terminal operator.

• A position holder.

In addition, bus and train operators mustregister if they will incur liability for tax at thebus or train rate.

Persons that may register. You may, butare not required to, register if you are any ofthe following persons.

• A gasohol blender.

• An industrial user.

• A throughputter that is not a positionholder.

• A kerosene feedstock user.

• An ultimate vendor of diesel fuel orkerosene.

Ultimate vendors do not need to register tobuy or sell diesel fuel or kerosene. However,they must be registered for filing certainclaims for the excise tax on these fuels.

Taxable fuel registrant. An enterer, an in-dustrial user, a refiner, a terminal operator,or a throughputter who receives a letter ofregistration under this provision is a taxablefuel registrant if the registration has not beenrevoked or suspended. The term taxable fuelmeans gasoline, diesel fuel, and kerosene.The term registrant as used in the dis-cussions of these fuels means a taxable fuelregistrant.

Additional information. See the Form637 instructions for the information you mustsubmit when you apply for registration.

GasolineThe following discussion provides definitionsand an explanation of events relating to theexcise tax on gasoline.

DefinitionsThe following terms are used throughout thediscussion of gasoline. Some of these termsare also used in the discussions of diesel fueland kerosene. Other terms are defined in thediscussion to which they pertain.

Gasoline. This means finished gasoline andgasoline blendstocks. Finished gasolinemeans all products (including gasohol) thatare commonly or commercially known or soldas gasoline and are suitable for use as motorfuel. The product must have an octane ratingof 75 or more. Gasoline blendstocks are dis-cussed later.

To figure the number of gallons on whichtax is imposed, you may base your meas-urement on the actual volumetric gallons,gallons adjusted to 60 degrees Fahrenheit,

or any other temperature adjustment methodapproved by the IRS.

Approved terminal or refinery. This is aterminal operated by a registrant that is aterminal operator or a refinery operated by aregistrant that is a refiner.

Aviation gasoline. This means all specialgrades of gasoline that are suitable for use inaviation reciprocating engines, as describedin ASTM Specification D 910 and MilitarySpecification MIL-G-5572.

Blended taxable fuel. This means any tax-able fuel that is produced outside the bulktransfer/terminal system by mixing taxablefuel on which excise tax has been imposedand any other liquid on which excise tax hasnot been imposed. This does not include amixture removed or sold during the calendarquarter if all such mixtures removed or soldby the blender contain less than 400 gallonsof a liquid on which the tax has not been im-posed. Blended taxable fuel does not includegasohol that receives an excise tax benefit.

Blender. This is the person that producesblended taxable fuel.

Bulk transfer. This is the transfer of fuel bypipeline or vessel.

Bulk transfer/terminal system. This is thefuel distribution system consisting of refin-eries, pipelines, vessels, and terminals. Fuelin the supply tank of any engine, or in anytank car, railcar, trailer, truck, or other equip-ment suitable for ground transportation is notin the bulk transfer/terminal system.

Enterer. This is the importer of record for thefuel. However, if the importer of record isacting as an agent, the person for whom theagent is acting is the enterer. If there is noimporter of record, the owner at the time ofentry into the United States is the enterer.

Entry. Fuel is entered into the United Statesif it is brought into the United States and ap-plicable customs law requires that it be en-tered for consumption, use, or warehousing.This does not apply to fuel brought into PuertoRico (which is part of the U.S. customs terri-tory), but does apply to fuel brought into theUnited States from Puerto Rico.

Position holder. This is the person thatholds the inventory position in the fuel in theterminal, as reflected on the records of theterminal operator. You hold the inventory po-sition when you have a contractual agreementwith the terminal operator for the use of thestorage facilities and terminaling services forthe fuel. A terminal operator that owns the fuelin its terminal is a position holder.

Rack. This is a mechanism for delivering fuelfrom a refinery or terminal into a truck, trailer,railroad car, or other means of nonbulktransfer.

Refiner. This is any person that owns, op-erates, or otherwise controls a refinery.

Registrant. This is a taxable fuel registrant(see Registration Requirements, earlier).

Removal. This is any physical transfer offuel. It also means any use of fuel other thanas a material in the production of taxable or

special fuels. However, fuel is not removedwhen it evaporates or is otherwise lost ordestroyed.

Sale. For fuel not in a terminal, this is thetransfer of title to, or substantial incidents ofownership in, fuel to the buyer for money,services, or other property. For fuel in a ter-minal, this is the transfer of the inventory po-sition if the transferee becomes the positionholder for that fuel.

State. This includes any state, any of itspolitical subdivisions, the District of Columbia,and the American Red Cross. Treat an Indiantribal government as a state only if trans-actions involve the exercise of an essentialtribal government function.

Terminal. This is a storage and distributionfacility that is supplied by pipeline or vessel,and from which fuel may be removed at arack. It does not include a facility at whichgasoline blendstocks are used in the manu-facture of products other than finished gaso-line if no gasoline is removed from the facility.A terminal does not include a facility operatedby a registrant if all the finished gasoline andundyed diesel fuel stored at the facility hasbeen taxed previously upon removal from arefinery or terminal.

Terminal operator. This is any person thatowns, operates, or otherwise controls a ter-minal.

Throughputter. This is any person that is aposition holder or that owns fuel within thebulk transfer/terminal system (other than in aterminal).

Taxable EventsThe tax on gasoline is 18.4 cents a gallon. Itis imposed on each of the following events.However, see the special rules that apply togasoline blendstocks, later. Also, see thediscussion under Gasohol, if applicable.

If the tax is paid on the gasoline in morethan one event, a refund may be allowed forthe “second” tax paid on the gasoline. SeeRefunds of Second Tax, later.

CAUTION!

Aviation gasoline is taxable under thesame rules as other gasoline. How-ever, the tax on aviation gasoline is

19.4 cents a gallon.

Removal from terminal. All removals ofgasoline at a terminal rack are taxable. Theposition holder for that gasoline is liable forthe tax.

Terminal operator's liability. The termi-nal operator is jointly and severally liable forthe tax if the position holder is a person otherthan the terminal operator and is not a regis-trant.

However, a terminal operator meetingcertain conditions at the time of the removalwill not be liable for the tax. The terminaloperator must meet all the following condi-tions.

• Be a registrant.

• Have an unexpired notification certificate(discussed later) from the position holder.

• Have no reason to believe that any in-formation on the certificate is false.

Removal from refinery. The removal ofgasoline from a refinery is taxable if the re-moval meets either of the following condi-tions.

• It is made by bulk transfer and the refineror the owner of the gasoline immediatelybefore the removal is not a registrant.

• It is made at the refinery rack.

The refiner is liable for the tax.The tax does not apply to a removal of

gasoline at the refinery rack if all the followingrequirements are met.

• The gasoline is removed from an ap-proved refinery that is not served bypipeline (other than for receiving crudeoil) or vessel.

• The gasoline is received at a facility thatis operated by a registrant and is withinthe bulk transfer/terminal system.

• The removal from the refinery is byrailcar.

• The same person operates the refineryand the facility at which the gasoline isreceived.

Entry into the United States. The entry ofgasoline into the United States is taxable ifthe entry meets either of the following condi-tions.

• It is made by bulk transfer and the entereris not a registrant.

• It is not made by bulk transfer.

The enterer is liable for the tax.

Removal from a terminal by unregisteredposition holder. The removal by bulktransfer of gasoline from a terminal is taxableif the position holder for the gasoline is not aregistrant. The position holder is liable for thetax. The terminal operator is jointly and se-verally liable for the tax if the position holderis a person other than the terminal operator.However, see Terminal operator's liabilityunder Removal from terminal, earlier, for anexception.

Bulk transfers not received at an approvedterminal or refinery. The removal by bulktransfer of gasoline from a terminal or refin-ery, or the entering of gasoline by bulk trans-fer into the United States, is taxable if thefollowing conditions apply.

1) No tax was imposed (as discussed ear-lier) on any of the following events.

a) The removal from the refinery.

b) The entry into the United States.

c) The removal from a terminal by anunregistered position holder.

2) Upon removal from the pipeline or ves-sel, the gasoline is not received at anapproved terminal or refinery (or at an-other pipeline or vessel).

The owner of the gasoline when it is re-moved from the pipeline or vessel is liable forthe tax. However, an owner meeting certainconditions at the time of the removal from thepipeline or vessel will not be liable for the tax.The owner must meet all the following condi-tions.


• Have an unexpired notification certificate(discussed later) from the operator of theterminal or refinery where the gasoline isreceived.


The operator of the facility where the gasolineis received is liable for the tax if the ownermeets these conditions. The operator is jointlyand severally liable if the owner does notmeet these conditions.

Sales to unregistered person. The sale ofgasoline located within the bulktransfer/terminal system to a person that isnot a registrant is taxable if tax was not im-posed under any of the events discussedearlier.

The seller is liable for the tax. However,a seller meeting certain conditions at the timeof the sale will not be liable for the tax. Theseller must meet all the following conditions.


• Have an unexpired notification certificate(discussed later) from the buyer.


The buyer of the gasoline is liable for the taxif the seller meets these conditions. The buyeris jointly and severally liable if the seller doesnot meet these conditions.

The tax on these sales does not apply ifall of the following apply.

• The buyer's principal place of business isnot in the United States.

• The sale occurs as the fuel is deliveredinto a transport vessel with a capacity ofat least 20,000 barrels of fuel.

• The seller is a registrant and the exporterof record.

• The fuel was exported.

Removal or sale of blended gasoline. Theremoval or sale of blended gasoline by theblender is taxable. See Blended taxable fuelunder Definitions, earlier.

The blender is liable for the tax. The taxis figured on the number of gallons of blendedgasoline that was not previously subject to thetax on gasoline.

Notification certificate. The notificationcertificate is used to notify a person of theregistration status of the registrant. A copy ofthe registrant's letter of registration cannot beused as a notification certificate. A modelnotification certificate is shown in AppendixC as Model Certificate A. Your notificationcertificate must contain all information nec-essary to complete the model.

The certificate may be included as part ofany business records normally used for asale. A certificate expires on the earlier of thedate the registrant provides a new certificate,or the date the recipient of the certificate isnotified that the registrant's registration hasbeen revoked or suspended. The registrantmust provide a new certificate if any informa-tion on a certificate has changed.

Additional persons liable. When the personliable for the tax willfully fails to pay the tax,joint and several liability for the tax is imposedon:

• Any officer, employee, or agent of theperson who is under a duty to ensure thepayment of the tax and who willfully failsto perform that duty, or

• Any other person who willfully causesthat person to fail to pay the tax.

Gasoline BlendstocksGasoline includes gasoline blendstocks. Theprevious discussions apply to theseblendstocks. However, if certain conditionsare met, the removal, entry, or sale of gaso-line blendstocks is not taxable. Generally, thisapplies if the gasoline blendstock is not usedto produce finished gasoline or is received atan approved terminal or refinery.

Blendstocks. The following are gasolineblendstocks.

• Alkylate.

• Butane.

• Butene.

• Catalytically cracked gasoline.

• Coker gasoline.

• Ethyl tertiary butyl ether (ETBE).

• Hexane.

• Hydrocrackate.

• Isomerate.

• Methyl tertiary butyl ether (MTBE).

• Mixed xylene (not including any sepa-rated isomer of xylene).

• Natural gasoline.

• Pentane.

• Pentane mixture.

• Polymer gasoline.

• Raffinate.

• Reformate.

• Straight-run gasoline.

• Straight-run naphtha.

• Tertiary amyl methyl ether (TAME).

• Tertiary butyl alcohol (gasoline grade)(TBA).

• Thermally cracked gasoline.

• Toluene.

• Transmix containing gasoline.

However, gasoline blendstocks do not in-clude any products that cannot be used with-out further processing in the production offinished gasoline.

Not used to produce finished gasoline.Gasoline blendstocks that are not used toproduce finished gasoline are not taxable ifthe following conditions are met.

Removals and entries not connected tosale. Nonbulk removals and entries are nottaxable if the person otherwise liable for thetax (position holder, refiner, or enterer) is aregistrant.

Removals and entries connected tosale. Nonbulk removals and entries are nottaxable if the person otherwise liable for thetax (position holder, refiner, or enterer) is aregistrant, and at the time of the sale, thatperson meets the following requirements.

• Has an unexpired certificate (discussedlater) from the buyer.

• Has no reason to believe that any infor-mation in the certificate is false.

Sales after removal or entry. The saleof a gasoline blendstock that was not subjectto tax on its nonbulk removal or entry, asdiscussed earlier, is taxable. The seller is lia-ble for the tax. However, the sale is not tax-able if, at the time of the sale, the seller meetsthe following requirements.

• Has an unexpired certificate (discussednext) from the buyer.


Certificate of buyer. The certificate from thebuyer certifies that the gasoline blendstockswill not be used to produce finished gasoline.The certificate may be included as part of anybusiness records normally used for a sale. Amodel certificate is shown in Appendix C asModel Certificate B. Your certificate mustcontain all information necessary to completethe model.

A certificate expires on the earliest of thefollowing dates.

• The date 1 year after the effective date(not earlier than the date signed) of thecertificate.

• The date that a new certificate is providedto the seller.

• The date that the seller is notified that thebuyer's right to provide a certificate hasbeen withdrawn.

The buyer must provide a new certificate ifany information on a certificate has changed.

The IRS may withdraw the buyer's right toprovide a certificate if that buyer uses thegasoline blendstocks in the production of fin-ished gasoline or resells the blendstockswithout getting a certificate from its buyer.

Received at an approved terminal or re-finery. The nonbulk removal or entry ofgasoline blendstocks that are received at anapproved terminal or refinery is not taxable ifthe person otherwise liable for the tax (posi-tion holder, refiner, or enterer) meets all thefollowing requirements.

• Is a registrant.

• Has an unexpired notification certificate(discussed earlier) from the operator ofthe terminal or refinery where the gaso-line blendstocks are received.

• Has no reason to believe that any infor-mation on the certificate is false.

Bulk transfers to registered industrialuser. The removal of gasoline blendstocksfrom a pipeline or vessel is not taxable if theblendstocks are received by a registrant thatis an industrial user. An industrial user is anyperson that receives gasoline blendstocks bybulk transfer for its own use in the manufac-ture of any product other than finished gaso-line.

Refunds of Second TaxIf the tax is paid on more than one taxableevent, the person paying the “second tax”may claim a refund of that tax if certain con-ditions and reporting requirements are met.No credit against any tax is allowed for thistax.

Conditions for allowance of refund. Aclaim for refund of the tax is allowed only ifall the following conditions are met.

1) A tax on the fuel was paid to the gov-ernment and not credited or refunded(the “first tax”).

2) After the first tax was imposed, anothertax was imposed on the same fuel andwas paid to the government (the “secondtax”).

3) The person that paid the second tax filesa timely claim for refund containing theinformation required (see Refund claim,later).

4) The person that paid the first tax hasmet the reporting requirements, dis-cussed next.

Reporting requirements. Generally, theperson that paid the first tax must file a “FirstTaxpayer's Report” with its Form 720 for thequarter for which the report relates. A modelfirst taxpayer's report is shown in AppendixC as Model Certificate C. Your report mustcontain all information needed to completethe model.

By the due date for filing the Form 720,you must send a separate copy of the reportto the following address.

Internal Revenue ServiceCincinnati, OH 45999–0555

Write “EXCISE – FIRST TAXPAYER'S RE-PORT” across the top of that copy.

Optional report. A first taxpayer's reportis not required for the tax imposed on a re-moval from a terminal rack, nonbulk entriesinto the United States, or removals or salesby blenders. However, if the person liable forthe tax expects that another tax will be im-posed on that fuel, that person should (but isnot required to) file a first taxpayer's report.

Providing information. The first tax-payer must give a copy of the report to thebuyer of the fuel within the bulktransfer/terminal system or, if the first tax-payer is not the owner at the time, to theperson that owned the fuel immediately be-fore the first tax was imposed. If the optionalreport is filed, a copy should (but is not re-quired to) be given to the buyer or owner.

A person that receives a copy of the firsttaxpayer's report and later sells the fuel withinthe bulk transfer/terminal system must givethe copy and a “Statement of SubsequentSeller” to the buyer. If the later sale is outsidethe bulk transfer/terminal system and thatperson expects that another tax will be im-posed, that person should (but is not requiredto) give the copy and the statement to thebuyer. A model statement of subsequentseller is shown in Appendix C as Model Cer-tificate D. Your statement must contain all in-formation necessary to complete the model.

If the first taxpayer's report relates to fuelsold to more than one buyer, copies of thatreport must be made when the fuel is divided.Each buyer must be given a copy of the re-port.

Refund claim. You must make your claim forrefund on Form 8849. Complete Schedule 5(Form 8849) and attach it to your Form 8849.You must have filed Form 720 and paid thesecond tax before you file for a refund of thattax. Do not include this claim with a claimunder another tax provision. You must nothave included the second tax in the price of

the fuel and must not have collected it fromthe purchaser. You must attach the followinginformation to your claim.

• A copy of the first taxpayer's report (dis-cussed earlier).

• A copy of the statement of subsequentseller if the fuel was bought from some-one other than the first taxpayer.

Credits and RefundsA credit or refund of the gasoline tax may beallowable if gasoline is, by any person:

• Exported,

• Used or sold for use as supplies for ves-sels or aircraft as defined in section4221(d)(3) of the Internal Revenue Code(generally, this is gasoline used in a boatengaged in commercial fishing, in militaryaircraft, and in foreign trade),

• Sold to a state for its exclusive use,

• Sold to a nonprofit educational organiza-tion for its exclusive use,

• Sold to the United Nations for its exclu-sive use, or

• Used or sold in the production of specialfuels.

Claims by wholesale distributors. A creditor refund is allowable to a gasoline wholesaledistributor who buys gasoline tax paid andthen sells it to the ultimate purchaser (includ-ing an exporter) for a purpose listed in theprevious list. A wholesale distributor includesany person who makes retail sales of gaso-line at 10 or more retail motor fuel outlets.This does not include a producer or importer.

The wholesale distributor must have soldthe gasoline at a tax-excluded price and ob-tained a certificate of ultimate purchaser orproof of exportation.

Claims by persons who paid the tax to thegovernment. A credit or refund is allowableto the person that paid the tax to the govern-ment if the gasoline was sold to the user (in-cluding an exporter) by either that person orby a retailer for a purpose listed in the previ-ous list. A credit or refund also is allowableto that person if the gasoline was sold to theuser by a wholesale distributor and either ofthe following is true.

• The distributor bought the gasoline at aprice that did not include the tax.

• The sale to the user was charged on anoil company credit card.

The person that paid the tax must submit thefollowing with its claim.

1) One of the three items below.

a) Proof of exportation.

b) A certificate of ultimate purchaser.

c) A certificate of ultimate vendor.

2) A statement that the person has doneany of the following.

a) Has neither included the tax in theprice of the gasoline nor collectedthe tax from the buyer.

b) Has repaid, or agreed to repay, thetax to the ultimate vendor of thegasoline.

c) Has gotten the written consent ofthe ultimate vendor to the allowanceof the credit or refund.

Claims by the ultimate purchaser. A creditor refund is allowable to the ultimate pur-chaser of tax-paid gasoline used for a non-taxable use. See Publication 378 for moreinformation about these claims.

GasoholGenerally, the same rules that apply to theimposition of tax on the removal and entry ofgasoline (discussed earlier) apply to gasohol.

However, the removal of gasohol from arefinery is taxable if the removal is from anapproved refinery by bulk transfer and theregistered refiner chooses to be treated asnot registered. This is in addition to the taxa-ble events discussed earlier under Removalfrom refinery.

Gasohol. Gasohol is a mixture of gasolineand alcohol that satisfies the alcohol-contentrequirements. Alcohol includes ethanol andmethanol. The term “alcohol” does not includealcohol produced from petroleum, naturalgas, coal (including peat), or any derivativeor product of these items or alcohol that isless than 190 proof. Methanol produced frommethane gas formed in waste disposal sitesqualifies as alcohol because it is not “alcoholproduced from natural gas.” Ethanol used toproduce ethyl tertiary butyl ether (ETBE)generally qualifies as alcohol for this purpose.

Alcohol-content requirements. To qualifyas gasohol, the mixture must contain a spe-cific amount of alcohol by volume, withoutrounding. Figure the alcohol content on abatch-by-batch basis. There are three typesof gasohol.

• 10% gasohol. This is a mixture thatcontains at least 9.8% alcohol.

• 7.7% gasohol. This is a mixture thatcontains at least 7.55%, but less than9.8%, alcohol.

• 5.7% gasohol. This is a mixture thatcontains at least 5.59%, but less than7.55%, alcohol.

If the mixture is produced within the bulktransfer/terminal system, such as at a refin-ery, determine whether the mixture is gasoholwhen the taxable removal or entry of themixture occurs.

If the mixture is produced outside the bulktransfer/terminal system, determine whetherthe mixture is gasohol immediately after themixture is produced. If you splash blend abatch in an empty tank, figure the volume ofalcohol (without adjustment for temperature)by dividing the metered gallons of alcohol bythe total metered gallons of alcohol and gas-oline as shown on each delivery ticket. How-ever, if you add the metered gallons to a tankalready containing more than 0.5% of its ca-pacity in a liquid, include the amount of alco-hol and non-alcohol fuel contained in that liq-uid in figuring the volume of alcohol in thatbatch.

Example 1. John uses an empty 8,000gallon tank to blend alcohol and gasoline. Hisdelivery tickets show that he blended Batch1 using 7,200 metered gallons of gasolineand 800 metered gallons of alcohol. John di-vides the gallons of alcohol (800) by the total

gallons of alcohol and gasoline delivered(8,000). Batch 1 qualifies as 10% gasohol.

Example 2. John blends Batch 2 in anempty tank. According to his delivery tickets,he blended 7,220 gallons of gasoline and 780gallons of alcohol. Batch 2 contains 9.75%alcohol (780 ÷ 8,000); it qualifies as 7.7%gasohol.

Batches containing at least 9.8% alco-hol. If a mixture contains at least 9.8% butless than 10% alcohol, part of the mixture isconsidered to be 10% gasohol. To figure thatpart, multiply the number of gallons of alcoholin the mixture by 10. The other part of themixture is excess liquid that is subject to therules on failure to blend, discussed later.

Batches containing at least 7.55% al-cohol. If a mixture contains at least 7.55%but less than 7.7% alcohol, part of the mixtureis considered to be 7.7% gasohol. To figurethat part, multiply the number of gallons ofalcohol in the mixture by 12.987. The otherpart of the mixture is excess liquid that issubject to the rules on failure to blend, dis-cussed later.

Batches containing at least 5.59% al-cohol. If a mixture contains at least 5.59%but less than 5.7% alcohol, part of the mixtureis considered to be 5.7% gasohol. To figurethat part, multiply the number of gallons ofalcohol in the mixture by 17.544. The otherpart of the mixture is excess liquid that issubject to the rules on failure to blend, dis-cussed later.

Gasohol blender. A gasohol blender is anyperson that regularly buys gasoline and alco-hol and produces gasohol for use in its tradeor business or for resale. A “registered gaso-hol blender” is one that has been registeredby the IRS. See Registration Requirements,earlier.

Tax RatesThe tax rate depends on the type of gasohol.These rates are less than the regular tax ratefor gasoline. The reduced rate also dependson whether you are liable for the tax on theremoval or entry of gasoline used to makegasohol, or on the removal or entry of gaso-hol. You may be liable for additional tax if youlater separate the gasoline from the gasoholor fail to blend gasoline into gasohol.

Tax on gasoline. The tax on gasoline thatis removed or entered for the production ofgasohol depends on the type of gasohol thatis to be produced. The rates apply to the taximposed on the removal at the terminal orrefinery, or on the nonbulk entry into theUnited States (as discussed under Gasoline,earlier). The rates for gasoline used toproduce gasohol containing ethanol areshown on Form 720. The rates for gasolineused to produce gasohol containing methanolare shown in the instructions for Form 720.

Requirements. The reduced rates applyif the person liable for the tax (position holder,refiner, or enterer) is a registrant and:

1) A registered gasohol blender and thatperson produces gasohol with the gaso-line within 24 hours after removing orentering the gasoline, or

2) That person, at the time that the gasolineis sold in connection with the removalor entry:

a) Has an unexpired certificate fromthe buyer, and

b) Has no reason to believe that anyinformation in the certificate is false.

Certificate. The certificate from the buyercertifies that the gasoline will be used toproduce gasohol within 24 hours after pur-chase. The certificate may be included aspart of any business records normally usedfor a sale. A copy of the registrant's letter ofregistration cannot be used as a gasoholblender's certificate. A model certificate isshown in Appendix C as Model Certificate E.Your certificate must contain all informationnecessary to complete the model.


• The date 1 year after the effective date(which may be no earlier than the datesigned) of the certificate.


• The date that the seller is notified that thegasohol blender's registration has beenrevoked or suspended.

The buyer must provide a new certificate ifany information on a certificate has changed.

Tax on gasohol. The tax on the removal orentry of gasohol depends on the type of gas-ohol. The rates for gasohol containing ethanolare shown on Form 720. The rates for gaso-hol containing methanol are shown in the in-structions for Form 720.

Later separation. If a person separatesgasoline from gasohol on which a reduced taxrate was imposed, that person is treated asthe refiner of the gasoline. Tax is imposed onthe removal of the gasoline. This tax rate isthe difference between the regular tax rate forgasoline and the tax rate imposed on the priorremoval or entry of the gasohol.

Failure to blend. Tax is imposed on the re-moval, entry, or sale of gasoline on which areduced rate of tax was imposed if the gaso-line was not blended into gasohol, or wasblended into gasohol taxable at a higher rate.If the gasoline was not sold, the person liablefor this tax is the person that was liable for thetax on the entry or removal. If the gasolinewas sold, the person that bought the gasolinein connection with the taxable removal orentry is liable for this tax. This tax is the dif-ference between the tax that should haveapplied and the tax actually imposed.

Example. John uses an empty 8,000gallon tank to blend gasoline and alcohol. Thedelivery tickets show that he blended 7,205metered gallons of gasoline and 795 meteredgallons of alcohol. He bought the gasolineat a reduced tax rate of 14.444 cents pergallon. The batch contains 9.9375% alcohol(795 ÷ 8,000). John determines that 7,950gallons (10 × 795) of the mixture qualifies as10% gasohol. See Batches containing at least9.8% alcohol, earlier. The other 50 gallons isexcess liquid that he failed to blend into gas-ohol. He is liable for a tax of 3.956 cents pergallon (18.40 (full rate) − 14.444 (reducedrate)) on this excess liquid.

Diesel Fuel and KeroseneGenerally, diesel fuel and kerosene are taxedin the same manner as gasoline (discussedearlier). The following discussion provides in-formation about the excise tax on diesel fueland kerosene.

DefinitionsThe following terms are used in this dis-cussion of the tax on diesel fuel andkerosene. Other terms used in this discussionare defined under Gasoline.

Diesel fuel. This is any liquid (other thangasoline) that, without further processing orblending, is suitable for use as a fuel in adiesel-powered highway vehicle or a diesel-powered train. It does not include kerosene,No. 5 and No. 6 fuel oils, or F-76 (Fuel NavalDistillate MIL-F-16884).

Kerosene. This means the following fuels.

• The two grades of kerosene (No. 1-K andNo. 2-K) described in ASTM SpecificationD 3699.

• Aviation-grade kerosene.

Aviation-grade kerosene. This iskerosene-type jet fuel described in ASTMSpecification D 1655 and military specifica-tions MIL-T-5624R and MIL-T-83133D(Grades JP-5 and JP-8).

Diesel-powered highway vehicle. This isany self-propelled vehicle designed to carrya load over the public highways (whether ornot also designed to perform other functions)and propelled by a diesel-powered engine.Generally, do not consider specially designedmobile machinery for nontransportation func-tions and vehicles specially designed for off-highway transportation as diesel-poweredhighway vehicles. For more information aboutthese vehicles and for information about ve-hicles not considered highway vehicles, getPublication 378.

Diesel-powered train. This is any diesel-powered equipment or machinery that rideson rails. The term includes a locomotive, worktrain, switching engine, and track mainte-nance machine.

Taxable EventsThe tax on diesel fuel and kerosene is 24.4cents a gallon. It is imposed on each of thefollowing events. The tax does not apply todyed diesel fuel or dyed kerosene, discussedlater.

If the tax is paid on the diesel fuel orkerosene in more than one event, a refundmay be allowed for the “second” tax paid.See Refunds of Second Tax, earlier underGasoline.

Removal from terminal. All removals ofundyed diesel fuel or undyed kerosene at aterminal rack are taxable. The position holderfor that fuel is liable for the tax.

Terminal operator's liability. The termi-nal operator is jointly and severally liable forthe tax if the terminal operator provides anyperson with any bill of lading, shipping paper,or similar document indicating that undyeddiesel fuel or undyed kerosene is dyed (dis-cussed later).

The terminal operator is jointly and se-verally liable for the tax if the position holder

is a person other than the terminal operatorand is not a registrant. However, a terminaloperator will not be liable for the tax in thissituation if, at the time of the removal, theterminal operator meets all the following re-quirements.

• Is a registrant.

• Has an unexpired notification certificate(discussed under Gasoline) from the po-sition holder.

• Has no reason to believe that any infor-mation on the certificate is false.

Removal from refinery. The removal of un-dyed diesel fuel or undyed kerosene from arefinery is taxable if the removal meets eitherof the following conditions.

• It is made by bulk transfer and the refineror owner of the fuel immediately beforethe removal is not a registrant.

• It is made at the refinery rack.

The refiner is liable for the tax.The tax does not apply to a removal of

undyed diesel fuel or undyed kerosene at therefinery rack if all the following conditions aremet.

1) The undyed diesel fuel or undyedkerosene is removed from an approvedrefinery that is not served by pipeline(other than for receiving crude oil) orvessel.

2) The undyed diesel fuel or undyedkerosene is received at a facility that isoperated by a registrant and is within thebulk transfer/terminal system.

3) The removal from the refinery is by:

a) Railcar and the same person oper-ates the refinery and the facility atwhich the undyed diesel fuel or un-dyed kerosene is received, or

b) For diesel fuel only, a trailer orsemi-trailer used exclusively totransport undyed diesel fuel from arefinery (described in (1)) to a facil-ity (described in (2)) that is less than20 miles from the refinery.

Entry into the United States. The entry ofundyed diesel fuel or undyed kerosene intothe United States is taxable if the entry meetseither of the following conditions.

• It is made by bulk transfer and the entereris not a registrant.

• It is not made by bulk transfer.

The enterer is liable for the tax.

Removal from a terminal by an unregis-tered position holder. The removal by bulktransfer of undyed diesel fuel or undyedkerosene from a terminal is taxable if the po-sition holder for that fuel is not a registrant.The position holder is liable for the tax. Theterminal operator is jointly and severally liablefor the tax if the position holder is a personother than the terminal operator. However,see Terminal operator's liability under Re-moval from terminal, earlier, for an exception.

Bulk transfers not received at an approvedterminal or refinery. The removal by bulktransfer of undyed diesel fuel or undyedkerosene from a terminal or refinery or the

entering of undyed diesel fuel or undyedkerosene by bulk transfer into the UnitedStates is taxable if the following conditionsapply.

1) No tax was imposed (as discussed ear-lier) on any of the following events.

a) The removal from the refinery.

b) The entry into the United States.

c) The removal from a terminal by anunregistered position holder.

2) Upon removal from the pipeline or ves-sel, the undyed diesel fuel or undyedkerosene is not received at an approvedterminal or refinery (or at another pipe-line or vessel).

The owner of the undyed diesel fuel orundyed kerosene when it is removed from thepipeline or vessel is liable for the tax. How-ever, an owner meeting certain conditions atthe time of the removal from the pipeline orvessel will not be liable for the tax. The ownermust meet all the following conditions.


• Have an unexpired notification certificate(discussed under Gasoline) from the op-erator of the terminal or refinery wherethe undyed diesel fuel or undyedkerosene is received.


The operator of the facility where the undyeddiesel fuel or undyed kerosene is received isliable for the tax if the owner meets theseconditions. The operator is jointly and se-verally liable if the owner does not meet theseconditions.

Sales to unregistered person. The sale ofundyed diesel fuel or undyed kerosene lo-cated within the bulk transfer/terminal systemto a person that is not a registrant is taxableif tax was not imposed under any of theevents discussed earlier.

The seller is liable for the tax. However,a seller meeting certain conditions at the timeof the sale will not be liable for the tax. Theseller must meet all the following conditions.


• Have an unexpired notification certificate(discussed under Gasoline) from thebuyer.


The buyer of the undyed diesel fuel or undyedkerosene is liable for the tax if the sellermeets these conditions. The buyer is jointlyand severally liable if the seller does not meetthese conditions.

The tax on these sales does not apply ifall the following tests are met.

• The buyer's principal place of business isnot in the United States.

• The sale occurs as the fuel is deliveredinto a transport vessel with a capacity ofat least 20,000 barrels of fuel.

• The seller is a registrant and the exporterof record.

• The fuel was exported.

Removal or sale of blended diesel fuel orkerosene. The removal or sale of blendeddiesel fuel or blended kerosene by theblender is taxable. See Blended taxable fuelin Definitions under Gasoline, earlier.

The blender is liable for the tax. The taxis figured on the number of gallons of blendeddiesel fuel or kerosene that were not previ-ously subject to the tax.




Aviation-grade kerosene. The excise taxon kerosene is not imposed on aviation-gradekerosene if the following conditions are met.

Not connected to sale. The removal orentry of aviation-grade kerosene not in con-nection with a sale is not subject to the taxon kerosene if all the following conditions aremet.

1) The person otherwise liable for the tax(position holder, refiner, or enterer) is aregistrant.

2) In the case of a removal from a terminal,the terminal is an approved terminal.

3) The kerosene will be used as fuel in anaircraft and one of the following applies.

a) The person otherwise liable for thetax subsequently delivers thekerosene into the fuel supply tankof an aircraft.

b) The person otherwise liable for thetax is a registered aviation fuelproducer or commercial airline.

c) The tax on aviation fuel has beenimposed on the kerosene.

Connected to sale. The removal or entryof aviation-grade kerosene in connection witha sale is not subject to the tax on keroseneif all the following conditions are met.

1) The person otherwise liable for the tax(position holder, refiner, or enterer) is aregistrant.


3) The kerosene will be used as fuel in anaircraft and one of the following applies.

a) The buyer is a registered aviationfuel producer, commercial airline,or importer.

b) The buyer is buying the kerosenefor its own use in a nontaxable use(as discussed under Aviation FuelExemptions, later).

c) The tax on aviation fuel is, or hasbeen, imposed on the kerosene.

Condition (3) is met only if the personotherwise liable for the tax has an unexpiredcertificate from the buyer and has no reasonto believe any information in the certificate isfalse. The certificate may be included as partof any business records normally used for a

sale. A model certificate is shown in AppendixC as Model Certificate G. Your certificatemust contain all information necessary tocomplete the model.


• The date 1 year after the effective date(not earlier than the date signed) of thecertificate.

• The date the buyer provides a new cer-tificate or notice that the current certif-icate is invalid to the seller.

• The date the seller is notified that thebuyer's right to provide a certificate hasbeen withdrawn.

The buyer must provide a new certificateif any information on a certificate haschanged.

The IRS may withdraw the buyer's right toprovide a certificate if the buyer uses or dis-poses of the aviation-grade kerosene otherthan as a fuel in an aircraft.

Bulk transfers to kerosene feedstock user.The removal of kerosene from a pipeline orvessel is not taxable if the kerosene is re-ceived by a kerosene feedstock user. Akerosene feedstock user is a registrant thatreceives kerosene by bulk transfer for its ownuse in the manufacture or production of anysubstance (other than gasoline, diesel fuel,or special fuels).

Dyed Diesel Fueland Dyed KeroseneThe excise tax is not imposed on the removal,entry, or sale of diesel fuel or kerosene if allthe following tests are met.

• The person otherwise liable for tax (forexample, the position holder) is a regis-trant.

• In the case of a removal from a terminal,the terminal is an approved terminal.

• The diesel fuel or kerosene satisfies thedyeing requirements (described next).

Dyeing requirements. Diesel fuel orkerosene satisfies the dyeing requirementsonly if it satisfies one of the following re-quirements.

• Contains the dye Solvent Red 164 (andno other dye) at a concentrationspectrally equivalent to at least 3.9pounds of the solid dye standard SolventRed 26 per thousand barrels of fuel.

• Contains any dye of a type and in aconcentration that has been approved bythe Commissioner.

Notice required. A legible and conspicuousnotice stating either: DYED DIESEL FUEL,NONTAXABLE USE ONLY, PENALTY FORTAXABLE USE or DYED KEROSENE,NONTAXABLE USE ONLY, PENALTY FORTAXABLE USE must be:

1) Provided by the terminal operator to anyperson that receives dyed diesel fuel ordyed kerosene at a terminal rack of thatoperator, and

2) Posted by a seller on any retail pump orother delivery facility where it sells dyeddiesel fuel or dyed kerosene for use byits buyer.

The notice under item (1) must be pro-vided by the time of the removal and mustappear on shipping papers, bills of lading, andsimilar documents accompanying the removalof the fuel.

Any seller that fails to post the requirednotice under item (2) is presumed to knowthat the fuel will be used for a taxable use (ause other than a nontaxable use listed later).That seller is subject to the penalty describednext.

Penalty. A penalty is imposed on personswho:

1) Know or have reason to know that theysold or held for sale dyed diesel fuel ordyed kerosene for a taxable use,

2) Know or have reason to know that theyused or held for use dyed diesel fuel ordyed kerosene for a taxable use, or

3) Alter or attempt to alter the strength orcomposition of the dye in any dyed die-sel fuel or dyed kerosene.

The penalty is the greater of $1,000 or $10per gallon of the dyed diesel fuel or dyedkerosene involved. After the first violation, the$1,000 portion of the penalty increases de-pending on the number of violations.

This penalty is in addition to any tax im-posed on the fuel.

If the penalty is imposed, each officer,employee, or agent of a business entity whowillfully participated in any act giving rise tothe penalty is jointly and severally liable withthat entity for the penalty.

Exception to penalty. The penalty underitem (3) will not apply in any of the followingsituations.

• Diesel fuel meeting the dyeing require-ments is blended with any undyed liquidand the resulting product meets the dye-ing requirements.

• Diesel fuel meeting the dyeing require-ments is blended with any other liquid(other than diesel fuel) that contains thetype and amount of dye required to meetthe dyeing requirements.

• The alteration or attempted alteration oc-curs in an exempt area of Alaska. SeeAlaska, next.

• Diesel fuel meeting the dyeing require-ments is blended with diesel fuel notmeeting the dyeing requirements and theblending occurs as part of a nontaxableuse (other than export), discussed later.

Alaska. Diesel fuel or kerosene removed,entered, or sold in Alaska for ultimate sale oruse in an exempt area of Alaska does nothave to meet the dyeing requirements to beexempt from the excise tax on diesel fuel orkerosene. The removal or entry of any dieselfuel or kerosene is not taxable if all the fol-lowing requirements are satisfied.

1) The person that would be liable for thetax as discussed under Taxable Events,earlier:

a) Is a registrant,

b) Can show satisfactory evidence ofthe nontaxable nature of the trans-action, and

c) Has no reason to believe the evi-dence is false.


3) The owner of the fuel immediately afterthe removal or entry holds the fuel for itsown use in a nontaxable use or is aqualified dealer.

Subsequent sales of diesel fuel orkerosene by a qualified dealer are subject totax unless all of the following are true.

• The fuel is sold in an exempt area ofAlaska.

• The buyer buys the fuel for its own usein a nontaxable use or is a qualifieddealer.

• The seller can show satisfactory evidenceof the nontaxable nature of the trans-action and has no reason to believe thatthe evidence is false.

A qualified dealer is any person thatholds a qualified dealer license from the stateof Alaska or has been registered by the dis-trict director as a qualified retailer. Satisfac-tory evidence may include copies of qualifieddealer licenses or exemption certificates ob-tained for state tax purposes.

Back-Up TaxExcise tax is imposed on the delivery of anyof the following into the fuel supply tank of adiesel-powered highway vehicle or diesel-powered train.

• Any dyed diesel fuel or dyed keroseneused for other than a nontaxable use.

• Any diesel fuel or kerosene on which acredit or refund (for fuel used for a non-taxable purpose) has been allowed.

• Any liquid other than gasoline, diesel fuel,or kerosene.

Generally, this “back-up tax” is imposedat a rate of 24.4 cents a gallon. The rate fordelivery of the fuel into a train is 4.4 cents agallon. The rate for delivery into certain inter-city or local buses is 7.4 cents a gallon.

If you are liable for the back-up tax, youmay be liable for the penalty discussed underDyed Diesel Fuel and Dyed Kerosene. How-ever, the penalty applies only to dyed dieselfuel and dyed kerosene, while the back-up taxcan apply to other fuels. The penalty mayapply if the fuel is held for sale or use for ataxable use while the back-up tax does notapply until the fuel is delivered into the fuelsupply tank.

Liability for tax. The operator of the vehicleor train into which the fuel is delivered is liablefor the tax. In addition, the seller of the dieselfuel or kerosene is jointly and severally liablefor the tax if the seller knows or has reasonto know that the fuel will be used for otherthan a nontaxable use. Generally, a seller ofdiesel fuel or kerosene is not liable for tax onfuel delivered into the fuel supply tank of abus or train. However, the person that deliv-ers the fuel into the supply tank of a train isliable for the tax if, at the time of delivery, thedeliverer and the train operator are both reg-istered as train operators and a writtenagreement between them requires thedeliverer to pay the tax.

Exemptions from the back-up tax. Theback-up tax does not apply to a delivery ofdiesel fuel or kerosene for uses (1) through(8) listed under Nontaxable Uses, next.

In addition, since the back-up tax is im-posed only on the delivery into the fuel supplytank of a diesel-powered vehicle or train, thetax does not apply to diesel fuel or keroseneused as heating oil or in stationary engines.

Nontaxable UsesDiesel fuel or kerosene intended for a non-taxable use generally is not subject to theexcise tax if the fuel meets the dyeing re-quirements discussed earlier under DyedDiesel Fuel and Dyed Kerosene.

The following are nontaxable uses of die-sel fuel and kerosene.

1) Use on a farm for farming purposes(discussed later).

2) Exclusive use of a state (defined earlierunder Gasoline).

3) Use in a vehicle owned by an aircraftmuseum (as discussed later under Avi-ation Fuel).

4) Use in a school bus (discussed later).

5) Use in a qualified local bus (discussedlater).

6) Use in a highway vehicle that:

a) Is not registered (and is not re-quired to be registered) for highwayuse under the laws of any state orforeign country, and

b) Is used in the operator's trade orbusiness or for the production ofincome.

7) Exclusive use of a nonprofit educationalorganization.

8) Use in a vehicle owned by the UnitedStates that is not used on a highway.

9) Diesel fuel or kerosene that is exported.

10) Use other than as a fuel in a propulsionengine of a diesel-powered highway ve-hicle (such as home heating oil).

11) Use as a fuel in a propulsion engine ofa diesel-powered train (subject toback-up tax, discussed earlier).

12) Use in an intercity or local bus meetingcertain qualifications, discussed later(subject to back-up tax, discussed ear-lier).

For information about filing a claim for re-fund or credit for the tax on undyed diesel fuelor undyed kerosene used for a nontaxableuse, see Publication 378.

Used on a farm for farming purposes.Diesel fuel or kerosene is used on a farm forfarming purposes if it is bought by the owner,tenant, or operator of the farm and used forany of the following purposes.

1) To cultivate the soil, or to raise or harvestany agricultural or horticultural commod-ity.

2) To raise, shear, feed, care for, train ormanage livestock, bees, poultry, fur-bearing animals, or wildlife.

3) To operate, manage, conserve, improve,or maintain your farm, tools, or equip-ment.

4) To handle, dry, pack, grade, or store anyraw agricultural or horticultural commod-ity (as provided below).

5) To plant, cultivate, care for, or cut treesor to prepare (other than sawing logs intolumber, chipping, or other milling) treesfor market, but only if the planting, etc.,is incidental to your farming operations(as provided below).

Diesel fuel or kerosene is used on a farmfor farming purposes if it is bought by a per-son other than the owner, tenant, or operatorand used on a farm for any of the purposesin item (1) or (2).

Item (4) applies only if more than one-halfof the commodity that was so treated duringthe tax year was produced on the farm.Commodity refers to a single raw product. Forexample, apples would be one commodityand peaches another. The more-than-one-half test applies separately to each commod-ity.

Item (5) applies if the operations are minorin nature when compared to the total farmingoperations.

If undyed diesel fuel or undyed keroseneis used on a farm for farming purposes, thefuel cannot be considered as being used forany other nontaxable use.

A farm includes livestock, dairy, fish,poultry, fruit, fur-bearing animals, and truckfarms, orchards, plantations, ranches, nurs-eries, ranges, and feedyards for fatteningcattle. It also includes structures such asgreenhouses used primarily for raising agri-cultural or horticultural commodities. A fishfarm is an area where fish are grown orraised—not merely caught or harvested. Thefarm must be operated for profit and locatedin any of the 50 states or the District ofColumbia.

Diesel fuel or kerosene is not used forfarming purposes if it is used in any of thefollowing ways.

• Off the farm, such as on the highway,even if the fuel is used in transportinglivestock, feed, crops, or equipment.

• For personal use, such as mowing thelawn.

• In processing, packaging, freezing, orcanning operations.

• In processing crude gum into gum spiritsof turpentine or gum resin or in process-ing maple sap into maple syrup or maplesugar.

Buses. Generally, diesel fuel or keroseneused in a bus is used for a nontaxable use.However, fuel used in certain buses is subjectto a reduced rate of excise tax.

School bus. No tax is imposed on dyedfuel used in a school bus while the bus isengaged in the transportation of students andschool employees. A school is an educationalorganization with a regular faculty and curric-ulum and a regularly enrolled body of stu-dents who attend the place where the edu-cational activities occur.

Qualified local bus. No tax is imposedon dyed fuel used in a qualified local buswhile the bus is engaged in furnishing intracitypassenger land transportation for compen-sation if the bus meets all the following tests.

• Is available to the general public.

• Operates along scheduled, regularroutes.

• Has a seating capacity of at least 20adults (excluding the driver).

• Is under contract with or receiving morethan a nominal subsidy from any stateor local government to furnish that trans-portation.

Intracity passenger land transportation meansland transportation between points locatedwithin the same metropolitan area. It includestransportation along routes that cross state,city, or county lines if the routes remain withinthe metropolitan area.

A bus is under contract with a state or lo-cal government only if the contract imposesa bona fide obligation on the bus operator tofurnish the transportation. A subsidy is morethan nominal if it is reasonably expected toexceed an amount equal to 3 cents multipliedby the number of gallons of fuel used in buseson subsidized routes.

A company that operates its buses alongsubsidized and unsubsidized intracity routesmay consider its buses qualified local busesonly when the buses are used on the subsi-dized intracity routes.

Intercity or local bus. A reduced rate oftax (7.4 cents a gallon) is imposed on dyedfuel delivered into the fuel supply tank of anintercity or local bus. (See Back-Up Tax,earlier.) This is a bus used to furnish (forcompensation) passenger land transportationthat is available to the general public and:

• The transportation is scheduled andalong regular routes regardless of thesize of the bus, or

• The seating capacity of the bus is at least20 adults (not including the driver).

A bus is available to the general public if thebus is available for hire to more than a limitednumber of persons, groups, or organizations.

Other buses. The full amount of tax (24.4cents a gallon) is imposed on dyed fuel de-livered into the fuel supply tank of a bus notpreviously described.

Credit or refund. If undyed diesel fuelor undyed kerosene is bought and used in abus for a nontaxable use, a credit or refundof the tax can be claimed by the buyer of thefuel used in the bus. See Publication 378 formore information.

Aviation FuelTax of 21.9 cents per gallon is imposed on thesale of aviation fuel by its producer orimporter. The person making the taxable saleis liable for the tax. The use of aviation fuel(other than a nontaxable use) by a produceris considered a sale of that fuel. This appliesif there was no tax on the sale of the fuel orthe tax had been credited or refunded.




Aviation fuel. This is kerosene and anyother liquid (other than gasoline or diesel fuel)that is suitable for use as fuel in an aircraft.

Producers. Producers include refiners,blenders, and wholesale distributors of avi-ation fuel and dealers selling aviation fuelexclusively to producers of aviation fuel ifthese persons have been registered by theIRS. The term also includes the actual pro-ducer of aviation fuel. See Registration forCertain Activities, earlier.

Any person buying aviation fuel at a re-duced rate is the producer of that fuel.

Wholesale distributors. To qualify as awholesale distributor, you must hold yourselfout to the public as being engaged in thetrade or business of:

1) Selling aviation fuel to producers orretailers or to users who purchase in bulkquantities (25 gallons or more) and ac-cept delivery into bulk storage tanks, andone of the following applies.

a) At least 30% of your sales of avi-ation fuel during the preceding12-month period are to these buy-ers, or

b) At least 50% of the volume of avi-ation fuel is sold to these buyersand at least 500 of your sales dur-ing the preceding 12-month periodare made to these buyers, or

2) Selling aviation fuel for nontaxable uses(such as use on a farm for farming pur-poses) and sell at least 70% of yourvolume of aviation fuel during the pre-ceding 12-month period to these users.

Bulk storage tanks. A bulk storage tankis a container that holds at least 50 gallonsand is not the fuel supply tank of any enginethat is mounted on, or attached to, an aircraft.

Refunds of Prior TaxA registered aviation fuel producer holdingaviation fuel on which a prior tax was paid(and not credited or refunded), can get a re-fund (without interest) of the tax. Generally,this applies when a producer buys tax-paidfuel from a retailer. No credit against any taxis allowed.

Conditions for allowance of refund. Aclaim for refund of the tax is allowed only ifall the following conditions are met.

1) A tax on the aviation fuel was paid to thegovernment by an importer or producer(the first producer) and the tax has notbeen credited or refunded.

2) After the tax was imposed, the fuel wasacquired by a registered aviation fuelproducer (the second producer).

3) The second producer has filed a timelyclaim for refund that contains the infor-mation required (see Refund claim,later).

4) The first producer and any person thatowns the fuel after its sale by the firstproducer and before its purchase by thesecond producer (a subsequent seller)have met the reporting requirements,discussed next.

Reporting requirements. Generally, the firstproducer must file a report (the first produc-er's report). A model first producer's report isshown in Appendix C as Model Certificate H.The report must contain all informationneeded to complete the model.

Providing information. The first pro-ducer must give a copy of the report to theperson to whom the first producer sells theaviation fuel.

Each subsequent seller must give to itsbuyer a statement that provides all the infor-mation necessary to complete the “Statementof Subsequent Seller (Aviation Fuel)” shownin Appendix C as Model Certificate I. Thestatement can be at the bottom or on the backof the copy of the first producer's report (or inan attached document).

If the first producer's report relates to avi-ation fuel that is divided among more thanone buyer, copies of that report should bemade when the fuel is divided and a copygiven to each buyer.

Refund claim. You must make your claim forrefund on Form 8849. Complete Schedule 6(Form 8849) and attach it to Form 8849. Donot include this claim with a claim under an-other tax provision. See the form instructionsfor how and where to file the claim. You mustattach all the following information to Sched-ule 6.

• Volume and type of aviation fuel.

• Date on which you acquired the aviationfuel to which the claim relates.

• Amount of tax on the fuel the first pro-ducer paid to the government and astatement that you have not included thistax in the sales price of the fuel and havenot collected it from any person whobought the fuel from you.

• Name, address, and employer identifica-tion number of the first producer that paidthe tax to the government.

• A copy of the first producer's report thatrelates to the aviation fuel covered by theclaim (discussed earlier).

• A copy of any statement of subsequentseller that you received with respect tothe aviation fuel.

Aviation Fuel ExemptionsRegistered producers may sell aviation fueltax free or at a tax-reduced rate for purposesdescribed below, but only if certain pre-scribed conditions are met. No seller of avi-ation fuel is eligible to claim a credit or refundfor aviation fuel used by the buyer for thesepurposes.

Sales to other producers. Registered pro-ducers may sell aviation fuel tax free to otherregistered producers of aviation fuel. Thebuyer must give the seller a written statementcontaining the buyer's registration number.

Sales for nontaxable uses. A registeredproducer may sell aviation fuel tax free for anyof the following uses.

• Use other than as a fuel in the propulsionengine of an aircraft (such as use asheating oil).

• In military aircraft owned by the UnitedStates or a foreign country.

• In a domestic air carrier engaged in for-eign trade or trade between the UnitedStates and any of its possessions.

• In a foreign air carrier engaged in foreigntrade or trade between the United Statesand any of its possessions, but only if thecountry in which the foreign carrier is

registered allows U.S. carriers reciprocalprivileges. For a list of these countries,see Revenue Ruling 74–346 in Cumula-tive Bulletin 1974–2, Revenue Ruling75–109 in Cumulative Bulletin 1975–1,and Revenue Rulings 75–398 and75–526 in Cumulative Bulletin 1975–2.

• Use on a farm for farming purposes, asdiscussed earlier under Diesel Fuel andKerosene.

• In an aircraft or vehicle owned by an air-craft museum, discussed next.

• Certain helicopter and fixed-wing air am-bulance uses, discussed later.

• Use by a state, as discussed earlier un-der Gasoline.

• Exclusive use by the United Nations.

A buyer for these uses gives its suppliera signed exemption certificate stating thebuyer's name, address, taxpayer identificationnumber, registration number (if applicable),and intended use. A buyer may give a sepa-rate exemption certificate for each purchaseor may give one certificate to cover all pur-chases from a particular seller for up to 1year.

Aircraft museums. Aviation fuel may besold tax free for use in an aircraft that isowned by an aircraft museum and used ex-clusively for purposes described in item (3)of the following definition.

An aircraft museum is an organization withall the following characteristics.

1) Exempt from income tax as an organ-ization described in section 501(c)(3) ofthe Internal Revenue Code.

2) Operated as a museum under a state (orDistrict of Columbia) charter.

3) Operated exclusively for acquiring, ex-hibiting, and caring for aircraft of the typeused for combat or transport in WorldWar II.

Certain helicopter uses. Aviation fuel maybe sold tax free for use in a helicopter that isused for one of the following purposes.

1) Transporting individuals, equipment, orsupplies in the exploration for, or thedevelopment or removal of, hard min-erals, oil, or gas.

2) Planting, cultivating, cutting, transport-ing, or caring for trees (including loggingoperations).

3) Providing emergency medical transpor-tation.

For items (1) and (2), this applies if the heli-copter does not take off from, or land at, afacility eligible for assistance under the Airportand Airway Development Act of 1970, orotherwise use services provided pursuant tosection 44509 or 44913(b) or subchapter I ofchapter 471 of title 49, United States Code,during such use. For item (1), each flightsegment is treated as a separate flight.

Fixed-wing air ambulance uses. Aviationfuel may be sold tax free for use in a fixed-wing aircraft that is providing emergencymedical transportation. The exemption ap-plies if the aircraft is equipped for and exclu-sively dedicated on that flight to acute careemergency medical services.

Sales to commercial airlines. Registeredproducers may sell aviation fuel at the tax-reduced rate of 4.4 cents a gallon to a regis-tered commercial aircraft operator for use asa fuel in commercial aviation (other than for-eign trade).

Commercial aviation is any use of an air-craft in the business of transporting personsor property by air for pay. However, com-mercial aviation does not include any of thefollowing uses.

• Any use of an aircraft that has a maxi-mum certificated takeoff weight of 6,000pounds or less, unless the aircraft is op-erated on an established line.

• Any use exclusively for the purpose ofskydiving.

• Any use of an aircraft owned or leasedby a member of an affiliated group andunavailable for hire by nonmembers.(Whether an aircraft is available for hireto nonmembers is determined on aflight-by-flight basis.)

To buy at a tax-reduced rate, the airline givesthe seller a written exemption certificatestating the buyer's name, address, taxpayeridentification number, registration number,and intended use of the fuel. An airline maygive a separate exemption certificate for eachpurchase or may give one certificate to coverall purchases from a particular seller for up to1 year.

Special Motor FuelsTax is imposed on the delivery of specialmotor fuels into the fuel supply tank of thepropulsion engine of a motor vehicle ormotorboat. However, there is no tax on thedelivery if tax was imposed under the bulksales rule, discussed next, or the delivery isfor a nontaxable use, listed later. If the deliv-ery was in connection with a sale, the selleris liable for the tax. If not in connection witha sale, the operator of the vehicle or boat isliable for the tax.

Bulk sales. Tax is imposed on the sale ofspecial motor fuels that is not in connectionwith delivery into the fuel supply tank of thepropulsion engine of a motor vehicle ormotorboat if the buyer furnishes a writtenstatement to the seller stating that the entirequantity of the fuel covered by the sale is forother than a nontaxable use, listed later. Theseller is liable for this tax.

Types of special motor fuels. Special mo-tor fuels include any liquid other than gaso-line, diesel fuel, kerosene, gas oil, and fueloil. The tax rates for these fuels are shown inthe Form 720 instructions.

Special motor fuels/alcohol mixture.Tax is imposed at a reduced rate on the saleor use of a blend of alcohol with special motorfuels. The blend must be at least 10% alcoholthat is 190 proof or more. Figure the proof ofany alcohol without regard to any addeddenaturants.

The alcohol includes methanol or ethanol.But it does not include alcohol produced frompetroleum, natural gas, coal (including peat),or any derivative or product of these items.Methanol produced from methane gas formedin waste disposal sites is not “alcoholproduced from natural gas.”

Treat the separation of special motor fuelfrom an alcohol mixture on which tax has

been paid at a reduced rate as a sale ofspecial motor fuel. The tax on the sale is im-posed on the person who makes the sepa-ration. Reduce the tax on special motor fuelby the tax already paid on the alcohol mixture.

Qualified methanol and ethanol fuels.A special rate applies to these fuels. Thesefuels consist of at least 85% methanol,ethanol, or other alcohol produced from asubstance other than petroleum or naturalgas.

Partially exempt methanol and ethanolfuels. A special rate applies to these fuels.These fuels consist of at least 85% methanol,ethanol, or other alcohol produced from na-tural gas.

Liquified petroleum gas. A special rateapplies to liquified petroleum gas (LPG), suchas propane or butane.

Tax is imposed on the delivery of LPG intothe fuel supply tank of certain intercity andlocal buses and qualified local and schoolbuses and must be reported on Form 720even though a credit or refund may be allow-able for LPG used in those buses.

Motor vehicle. For the purpose of applyingthe tax on the delivery of special motor fuels,motor vehicles include all types of vehicles,whether or not registered (or required to beregistered) for highway use, that have boththe following characteristics.

• Propelled by a motor.

• Designed for carrying or towing loadsfrom one place to another, regardless ofthe type of material or load carried ortowed.

Motor vehicles do not include any vehicle thatmoves exclusively on rails, or any of the fol-lowing items.

Nontaxable UsesThe following are nontaxable uses of specialmotor fuels.

• In an off-highway business use (dis-cussed later).

• In a boat engaged in commercial fishing.

• On a farm for farming purposes, as dis-cussed earlier under Diesel Fuel andKerosene.

• By a state for its exclusive use, as men-tioned earlier under Gasoline.

• By nonprofit educational organizations fortheir exclusive use, as discussed earlierunder Communications Tax.

• By the United Nations for its official use.

• In an aircraft or vehicle owned by an air-craft museum as discussed earlier underAviation Fuel.

Off-highway business use. This is use ina highway vehicle that is not registered (orrequired to be registered) for highway useunder the laws of any state or foreign countryand is used in the operator's trade or busi-ness or for the production of income. It alsoincludes use in a vehicle owned by the UnitedStates that is not used on a highway.

Compressed Natural GasTax is imposed on the delivery of compressednatural gas (CNG) into the fuel supply tankof the propulsion engine of a motor vehicleor motorboat. However, there is no tax on thedelivery if tax was imposed under the bulksales rule discussed next, or the delivery isfor a nontaxable use, listed later. If the de-livery is in connection with a sale, the selleris liable for the tax. If not in connection witha sale, the operator of the boat or vehicle isliable for the tax.

Bulk sales. Tax is imposed on the sale ofCNG that is not in connection with deliveryinto the fuel supply tank of the propulsionengine of a motor vehicle or motorboat if thebuyer furnishes a written statement to theseller that the entire quantity of the CNGcovered by the sale is for other than a non-taxable use, listed later. The seller of the CNGis liable for the tax.

Tax rate. The rate is 48.54 cents per thou-sand cubic feet (determined at standard tem-perature and pressure).

Motor vehicle. For this purpose, motor ve-hicle has the same meaning as given underSpecial Motor Fuels, earlier.

Nontaxable UsesThe following are nontaxable uses of CNG.

• In an off-highway business use, as dis-cussed earlier under Special Motor Fuels.

• In a boat engaged in commercial fishing.

• In a school bus or qualified local bus, asdiscussed earlier under Diesel Fuel andKerosene.

• On a farm for farming purposes, as dis-cussed earlier under Diesel Fuel andKerosene.

• By a state for its exclusive use, as dis-cussed earlier under Gasoline.

• By nonprofit educational organizations fortheir exclusive use, as discussed earlierunder Communications Tax.

• By the United Nations for its official use.

• By aircraft museums, as discussed earlierunder Aviation Fuel.

• Use in any boat operated by the UnitedStates for its exclusive use or any vesselof war of any foreign nation.

There is no tax on a delivery in connectionwith a sale of CNG only if, by the time of sale,the seller meets both the following conditions.

• Has an unexpired certificate from thebuyer.


Certificate. The certificate from the buyercertifies that the CNG will be used in a non-taxable use. The certificate may be includedas part of any business records normally usedfor a sale. A model certificate is shown inAppendix C as Model Certificate F. Your cer-tificate must contain all information necessaryto complete the model.


• The date 1 year after the effective date(which may be no earlier than the datesigned) of the certificate.


• The date that the seller is notified that thebuyer's right to provide a certificate hasbeen withdrawn.

Fuels Used onInland WaterwaysTax of 24.4 cents a gallon is imposed on anyliquid fuel used in the propulsion system ofcommercial transportation vessels while trav-eling on certain inland and intracoastalwaterways. The tax generally applies to alltypes of vessels, including ships, barges, andtugboats.

The person who operates the vessel inwhich the fuel is consumed is the user andmust file returns and pay the tax. The tax ispaid with the Form 720. No tax deposits arerequired.

Inland and intracoastal waterways. Inlandand intracoastal waterways on which fuelconsumption is subject to tax are specified insection 206 of the Inland Waterways RevenueAct of 1978, as amended.

Commercial waterway transportation.Commercial waterway transportation is theuse of a vessel on inland or intracoastalwaterways for either of the following pur-poses.

• In the business of transporting propertyfor compensation or hire.

• To transport property in the business ofthe owner, lessee, or operator of thevessel, whether or not a fee is charged.

The operation of all vessels (except cer-tain fishing vessels) meeting either of theserequirements is commercial waterway trans-portation regardless of whether the vessel isactually transporting property on a particularvoyage. The tax is imposed on fuel consumedin vessels while engaged in any of the fol-lowing activities.

• Moving without cargo.

• Awaiting passage through locks.

• Moving to or from a repair facility.

• Dislodging vessels grounded on a sandbar.

• Fleeting barges into a single tow.

• Maneuvering around loading and un-loading docks.

Fishing vessels exception. The taxdoes not apply to fuel used by a fishing vesselwhile traveling to a fishing site, while engagedin fishing, or while returning from the fishingsite with its catch. A vessel is not transportingproperty in the business of the owner, lessee,or operator by merely transporting fish orother aquatic animal life caught on the voy-age.

However, the tax does apply to fuel usedby a commercial vessel along the specifiedwaterways while traveling to pick up aquaticanimal life caught by another vessel and whiletransporting the catch of that other vessel.

Farm tractors Trench diggersPower shovels BulldozersRoad graders Road rollersSimilar equipment that does

not carry or tow a load

Liquid fuel. Liquid fuel includes diesel fuel,Bunker C residual fuel oil, special motor fuel,or gasoline. The tax is imposed on liquid fuelactually consumed by a vessel's propulsionengine and not on the unconsumed fuel in avessel's tank.

Dual use of liquid fuels. The tax applies toall taxable liquid used as a fuel in the propul-sion of the vessel, regardless of whether theengine (or other propulsion system) is usedfor another purpose. The tax applies to allliquid fuel consumed by the propulsion engineeven if it operates special equipment bymeans of a power take-off or power transfer.For example, the fuel used in the engine bothto operate an alternator, generator, or pumps,and to propel the vessel is taxable.

The tax does not apply to fuel consumedin engines that are not used to propel thevessel.

If you draw liquid fuel from the same tankto operate both a propulsion engine and anonpropulsion engine, figure the fuel used inthe nonpropulsion engine. IRS will accept areasonable estimate of the fuel based on youroperating experience, but you must keeprecords to support your allocation.

Voyages crossing boundaries of the taxa-ble waterways. The tax applies to fuel con-sumed by a vessel crossing the boundariesof the specified waterways only to the extentof fuel consumed for propulsion while onthose waterways. Generally, the operatormay figure the amount of fuel so used duringa particular voyage by multiplying total fuelconsumed in the propulsion engine by afraction. The numerator of the fraction is thetime spent operating on the specifiedwaterways, and the denominator is the totaltime spent on the voyage. This calculationmay not be used where it is found to be un-reasonable.

Exceptions. Certain types of commercialwaterway transportation are excluded fromthe tax.

Deep-draft ocean-going vessels. Fuelis not taxable when used by a vessel de-signed primarily for use on the high seas if ithas a draft of more than 12 feet on the voy-age. For each voyage, figure the draft whenthe vessel has its greatest load of cargo andfuel. A voyage is a round trip. If a vessel hasa draft of more than 12 feet on at least oneway of the voyage, the vessel satisfies the12-foot draft requirement for the entire voy-age.

Passenger vessels. Fuel is not taxablewhen used by vessels primarily for the trans-portation of persons. The tax does not applyto fuel used in commercial passenger vesselswhile transporting property in addition totransporting passengers. Nor does it apply toferryboats carrying passengers and their cars.

Ocean-going barges. Fuel is not taxablewhen used in tugs to move LASH andSEABEE ocean-going barges released byocean-going carriers solely to pick up or de-liver international cargoes.

However, it is taxable when any of thefollowing conditions applies.

• One or more of the barges in the tow isnot a LASH barge, SEABEE barge, orother ocean-going barge carried aboardan ocean-going vessel.

• One or more of the barges is not on aninternational voyage.

• Part of the cargo carried is not beingtransported internationally.

State or local governments. No tax isimposed on the fuel used in a vessel operatedby a state or local government in transportingproperty on official business. The ultimate useof the cargo must be for a function ordinarilycarried out by governmental units. An Indiantribal government is treated as a state only ifthe fuel is used in the exercise of an essentialtribal government function.

RECORDS

All operators of vessels used in com-mercial waterway transportation whoacquire liquid fuel must keep ade-

quate records of all fuel used for taxablepurposes. Operators who are seeking an ex-clusion from the tax must keep records thatwill support any exclusion claimed.

Your records should include all of the fol-lowing information.

• The date and quantity of fuel deliveredinto storage tanks or the tanks on yourvessel.

• The identification number or name ofeach vessel using the fuel.

• The departure time, departure point,route traveled, destination, and arrivaltime for each vessel.

If you claim an exemption from the tax,include in your records the following addi-tional information as it pertains to you.

• The draft of the vessel on each voyage.

• The type of vessel in which you used thefuel.

• The ultimate use of the cargo (for vesselsoperated by state or local governments).

Alcohol Sold as FuelBut Not Used as FuelIf you sell or use alcohol (either mixed orstraight) as a fuel, you may be eligible for anincome tax credit. Use Form 6478, Credit forAlcohol Used as Fuel, to figure the credit. Ifthe credit was claimed, you are liable for anexcise tax if you do any of the following.

• Use the mixture or straight alcohol otherthan as a fuel.

• Separate the alcohol from a mixture.

• Mix the straight alcohol.

Report the tax on Form 720. The rate oftax depends on the rate at which the creditwas allowed. No tax deposits are required.

For more information about this credit, seeAlcohol Fuel Credit in Publication 378.

Manufacturers TaxesIf you are a manufacturer and you sell an ar-ticle subject to a manufacturers excise tax,you are liable for the tax unless an exemptionapplies. The following discussion on man-ufacturers taxes applies to the tax on the fol-lowing items.

• Sport fishing equipment.

• Bows.

• Arrow components.

• Coal.

• Tires.

• Gas guzzler automobiles.

• Vaccines.

Manufacturer. The term “manufacturer” in-cludes a producer or importer. A manufac-turer is any person who produces a taxablearticle from new or raw material, or fromscrap, salvage, or junk material, by process-ing or changing the form of an article or bycombining or assembling two or more articles.If you furnish the materials and keep title tothose materials and to the finished article, youare considered the manufacturer even thoughanother person actually manufactures thetaxable article.

A manufacturer who sells a taxable articlein knockdown condition is liable for the tax.The person who buys these component partsand assembles a taxable article may also beliable for tax as a further manufacturer de-pending on the labor, material, and overheadrequired to assemble the completed article ifthe article is assembled for business use.

Importer. An importer is the person whobrings an article into the United States, orwithdraws an article from a customs bondedwarehouse for sale or use in the UnitedStates.

Sale. A sale is the transfer of the title to, orthe substantial incidents of ownership in, anarticle to a buyer for consideration which mayconsist of money, services, or other things.

Use considered sale. A manufacturerwho uses a taxable article is liable for the taxin the same manner as if it were sold.

Lease considered sale. The lease of anarticle (including any renewal or extension ofthe lease) by the manufacturer is generallyconsidered a taxable sale. However, for thegas guzzler tax, only the first lease (excludingany renewal or extension) of the automobileby the manufacturer is considered a sale.

Manufacturers taxes based on sales price.The manufacturers taxes that are imposedon the sale of sport fishing equipment, electricoutboard motors, sonar devices, bows, andarrow components are based on the saleprice of the article. The taxes imposed on coalare based either on the sales price or theweight.

The “price” for which an article is sold in-cludes the total consideration paid for the ar-ticle, whether that consideration is in the formof money, services, or other things. However,you include certain charges made when ataxable article is sold while you exclude oth-ers. To figure the price on which you base thetax, use the following rules.

1) Include both the following charges in theprice.

a) Any charge for coverings or con-tainers (regardless of their nature).

b) Any charge incident to placing thearticle in a condition packed readyfor shipment.

2) Exclude all the following charges fromthe price.

a) The manufacturers excise tax,whether or not it is stated as aseparate charge.

b) The cost of transportation. (Thecost of transportation of goods to awarehouse before their bona fidesale is not excludable.)

c) Delivery, insurance, installation, re-tail dealer preparation costs, andother charges that you incur inplacing the article in the hands ofthe purchaser under a bona fidesale.

d) Discounts, rebates, and similar al-lowances actually granted to thepurchaser.

e) Local advertising charges. A chargemade separately when the article issold and that qualifies as a chargefor “local advertising” may, withincertain limits, be excluded from thesale price.

f) Charges for warranty paid at thepurchaser's option. However, acharge for a warranty of an articlethat the manufacturer, producer, orimporter requires the purchaser topay to obtain the article is includedin the sale price on which the tax isfigured.

g) Bonus goods. Allocate the salesprice if you give free nontaxablegoods with the purchase of taxablemerchandise. Impose the tax onlyon the sale price attributable to thetaxable articles.

Example. A manufacturer sells a quantityof taxable articles and gives the purchasercertain nontaxable articles as a bonus. Thesale price of the shipment is $1,500. Thenormal sale price is $2,000: $1,500 for thetaxable articles and $500 for the nontaxablearticles. Since the taxable items represent75% of the normal sale price, the tax is basedon 75% of the actual sale price, or $1,125(75% of $1,500). The remaining $375 is allo-cated to the nontaxable articles.

Tax LiabilityTax attaches when the title to the article soldpasses from the manufacturer to the buyer.When the title passes depends on the inten-tion of the parties as gathered from the con-tract of sale. In the absence of expressed in-tention, the legal rules of presumptionfollowed in the jurisdiction where the sale oc-curs determine when title passes.

If the taxable article is used by the man-ufacturer, the tax attaches at the time usebegins.

Partial payments. The tax applies to eachpartial payment received when taxable arti-cles are:

• Leased,

• Sold conditionally,

• Sold on installment with chattel mortgage,or

• Sold on installment with title to pass in thefuture.

To figure the tax, multiply the partial paymentby the tax rate in effect at the time of thepayment.

ExemptionsThe following sales are exempt from themanufacturers tax.

• To a state or local government for theexclusive use of the state or local gov-ernment. (This exemption does not applyto the taxes on coal, gas guzzlers, andvaccines.) State is defined under Gaso-line.

• To a nonprofit educational organizationfor its exclusive use. (This exemptiondoes not apply to the taxes on coal, gasguzzlers, and vaccines.) Nonprofit edu-cational organization is defined underCommunications Tax.

• For use by the purchaser as supplies forvessels. (This exemption does not applyto the taxes on coal and vaccines.)Supplies for vessels means ships' storesor sea stores on vessels of war of theUnited States or any foreign nation, ves-sels employed in the fisheries or whalingbusiness, or vessels actually engaged inforeign trade.

• By the purchaser for further manufacture,or for resale by the purchaser to a secondpurchaser for use by the second pur-chaser for further manufacture. (This ex-emption does not apply to the tax oncoal.) Use for further manufacture meansuse in the manufacture or production ofan article subject to the manufacturersexcise taxes. If you buy articles tax freeand resell or use them other than in themanufacture of another article, you areliable for the tax on their resale or use justas if you had manufactured and soldthem.

• For export or for resale by the purchaserto the second purchaser for export. (Thisexemption does not apply to the tax oncoal.) An article may be exported to aforeign country or to a possession of theUnited States. (A vaccine shipped to apossession of the United States is notconsidered to be exported.) If an articleis sold tax free for export and the man-ufacturer does not receive proof of ex-port, described later, the manufacturer isliable for the tax.

• Of articles of native Indian handicraft,such as bows and arrow components,manufactured by Indians on reservations,in Indian schools, or under U.S. jurisdic-tion in Alaska.

Requirements for Exempt SalesThe following requirements must be met fora sale to be exempt from the manufacturerstax.

Registration requirements. The manufac-turer, first purchaser, and second purchaserin the case of resales, must be registered.See the Form 637 instructions for more in-formation.

Exceptions to registration require-ments. Registration is not required for anyof the following.

• State or local governments.

• Sales or resales to foreign purchasers forexport.

• The United States.

• Parties to a sale of supplies for vessels.

Certification requirement. If the purchaseris registered, the purchaser must give themanufacturer its registration number andcertify the exempt purpose for which the arti-cle will be used. The information must be inwriting and may be noted on the purchaseorder or other document furnished by thepurchaser to the seller in connection with thesale.

For a sale to a state or local government,the exemption certificate must be signed byan officer or employee authorized by thestate. See section 48.4221–5(c) of the regu-lations for the certificate requirements.

For sales for use as supplies for vessels,if the manufacturer and purchaser are notregistered, the owner of the vessel must pro-vide an exemption certificate to the manufac-turer before or at the time of sale. See section48.4221–4(d) of the regulations for the certif-icate requirements.

Proof of export requirement. Within 6months of the date of sale or shipment by themanufacturer, whichever is earlier, the man-ufacturer must receive proof of exportation.See section 48.4221–3(d) of the regulationsfor evidence that qualifies as proof ofexportation.

Proof of resale for further manufacturerequirement. Within 6 months of the dateof sale or shipment by the manufacturer,whichever is earlier, the manufacturer mustreceive proof that the article has been resoldfor use in further manufacture. See section48.4221–2(c) of the regulations for evidencethat qualifies as proof of resale.

Information to be furnished to the pur-chaser. The manufacturer must indicate tothe purchaser that the articles normally wouldbe subject to tax and are being sold tax freefor an exempt purpose because the pur-chaser has provided the required certificate.

Credits or RefundsThe manufacturer may be eligible to obtain acredit or refund of the manufacturers tax. If atax-paid article is exported, the exporter orshipper may claim a credit or refund if themanufacturer waives its right to claim thecredit or refund. In the case of an article usedto make another taxable article, the subse-quent manufacturer may claim the credit orrefund.

A credit or refund of the manufacturerstaxes may be allowable if any of the followingis done to a tax-paid article by any person.

• Exported.

• Used or sold as supplies for vessels (ex-cept for coal and vaccines).

• Sold to a state or local government for itsexclusive use (except for coal, gasguzzlers, and vaccines).

• Sold to a nonprofit educational organiza-tion for its exclusive use (except for coal,gas guzzlers, and vaccines).

In addition, a credit or refund of manufac-turers taxes may be allowable for the follow-ing special cases.

• Taxable articles in which the price is re-adjusted by reason of return or repos-session of the article.

• Tax-paid articles used for further manu-facture of another article subject to themanufacturers taxes.

Conditions to allowance. To claim a creditor refund, in the case of an export, suppliesfor vessels, or sales to a state or local gov-ernment or nonprofit educational organiza-tion, the person who paid the tax must submit,with the claim, a statement asserting any ofthe following.

• That the tax was neither included in theprice of the article nor collected from avendee. The statement must also identifythe nature of the evidence available toestablish these facts.

• That the person has repaid, or agreed torepay, the tax to the ultimate vendor ofthe article.

• That the person has secured, and willsubmit upon the request of the IRS, thewritten consent of the ultimate vendor toallowance of the credit or refund.

The ultimate vendor is the seller making thesale that gives rise to the overpayment of taxor that immediately precedes the exportationor use that gives rise to the overpayment.

Sport Fishing EquipmentA tax of 10% of the sale price is imposed onmany articles of sport fishing equipment soldby the manufacturer. This includes any partsor accessories sold on or in connection with,or with the sale of, those articles.

Pay the tax with your return. No tax de-posits are required.

Sport fishing equipment includes all thefollowing items.

1) Fishing rods and poles (and componentparts), fishing reels, fly fishing lines, andother fishing lines not over 130 poundstest, fishing spears, spear guns, andspear tips.

2) Items of terminal tackle, including lead-ers, artificial lures, artificial baits, artificialflies, fishing hooks, bobbers, sinkers,snaps, drayles, and swivels (but not in-cluding natural bait or any item of termi-nal tackle designed for use and ordinarilyused on fishing lines not described in (1)above).

3) The following items of fishing suppliesand accessories: fish stringers, creels,tackle boxes, bags, baskets, and othercontainers designed to hold fish, port-able bait containers, fishing vests, land-ing nets, gaff hooks, fishing hookdisgorgers, and dressing for fishing linesand artificial flies.

4) Fishing tip-ups and tilts.

5) Fishing rod belts, fishing rodholders,fishing harnesses, fish fighting chairs,fishing outriggers, and fishingdownriggers.

See Revenue Ruling 88–52, in CumulativeBulletin 1988–1, for a more complete de-scription of the items of taxable equipment.

Electric outboard boat motors and sonardevices. A tax of 3% of the sale price isimposed on electric outboard motors and so-nar devices suitable for finding fish, sold bythe manufacturer. This includes any parts oraccessories sold on or in connection with, or

with the sale of, those articles. The tax on anysonar device, however, cannot exceed $30.A sonar device suitable for finding fish doesnot include any device that is a graph re-corder, a digital type, a meter readout, acombination graph recorder, or a combinationmeter readout.

Certain equipment resale. The tax on thesale of sport fishing equipment is imposed asecond time under the following circum-stances. If the manufacturer sells a taxablearticle to any person, the manufacturer is lia-ble for the tax. If the purchaser or any otherperson then sells it to a person who is related(discussed next) to the manufacturer, thatrelated person is liable for a second tax. Thesecond tax, however, is not imposed if theconstructive sale price rules under section4216(b) of the Internal Revenue Code applyto the sale by the manufacturer.

If the second tax is imposed, a credit fortax previously paid by the manufacturer isavailable provided the related person candocument the amount of tax paid. The doc-umentation requirement is generally satisfiedonly through submission of copies of actualrecords of the person that previously paid thetax.

Related person. For the tax on sportfishing equipment, a person is a related per-son of the manufacturer if that person and themanufacturer have the relationship describedin section 465(b)(3)(C) of the Internal Reve-nue Code.

BowsA tax of 11% of the sale price is imposed onthe sale by the manufacturer of any bowhaving a draw weight of 10 pounds or more.The tax also is imposed on the sale of anypart or accessory suitable for inclusion in orattachment to a taxable bow and any quiversuitable for use with arrows described next.For a list of taxable and nontaxable articles,see Revenue Ruling 98–5, in CumulativeBulletin 1998–1.

Pay this tax with your return. No tax de-posit is required.

Arrow ComponentsA tax of 12.4% of the sale price is imposedon the sale by the manufacturer of any shaft,point, nock, or vane of a type used in themanufacture of any arrow that after its as-sembly meets either of the following condi-tions.

• Measures 18 inches or more in overalllength.

• Measures less than 18 inches in overalllength but is suitable for use with a taxa-ble bow, discussed earlier.

Pay this tax with your return. No tax de-posit is required.

CoalProducers of coal from mines in the UnitedStates are liable for the tax on the first saleor use of the coal. The producer is the per-son who has vested ownership of the coalunder state law immediately after the coal issevered from the ground. Determine vestedownership without regard to the existence ofany contractual arrangement for the sale orother disposition of the coal or the paymentof any royalties between the producer and

third parties. A producer includes any personwho extracts coal from the coal waste refusepiles (or from the silt waste product) that re-sults from the wet washing of coal.

The tax is not imposed on coal extractedfrom a riverbed by dredging if it can be shownthat the coal has been taxed previously.

Tax rates. The tax on underground-minedcoal is the lower of:

• $1.10 a ton, or

• 4.4% of the sale price.

The tax on surface-mined coal is the lowerof:

• 55 cents a ton, or

• 4.4% of the sale price.

Coal will be taxed at the 4.4% rate if theselling price is less than $25 a ton forunderground-mined coal and less than$12.50 a ton for surface-mined coal. Applythe tax proportionately if a sale or use in-cludes a portion of a ton.

Example. If you sell 21,000 pounds (10.5tons) of coal from an underground mine for$525, the price per ton is $50. The tax is$1.10 times 10.5 tons ($11.55).

Coal production. Coal is produced fromsurface mines if all geological matter (trees,earth, rock) above the coal is removed beforethe coal is mined. Treat coal removed byauger and coal reclaimed from coal wasterefuse piles as produced from a surface mine.

Treat coal as produced from an under-ground mine when the coal is not producedfrom a surface mine. In some cases, a singlemine may yield coal from both surface miningand underground mining. Determine if thecoal is from a surface mine or an undergroundmine for each ton of coal produced and noton a mine-by-mine basis.

Determining the selling price. The pro-ducer pays the tax on coal at the time of saleor use. In figuring the selling price for applyingthe tax, the point of sale is f.o.b. (free onboard) mine or f.o.b. cleaning plant if youclean the coal before selling it. This applieseven if you sell the coal for a delivered price.Thus, f.o.b. mine or f.o.b. cleaning plant is thepoint at which you figure the number of tonssold for applying the applicable tonnage rate,and the point at which you figure the saleprice for applying the 4.4% rate.

The tax applies to the full amount of coalsold. However, the IRS allows a calculatedreduction of the taxable weight of the coal forthe weight of the moisture in excess of thecoal's inherent moisture content. Include inthe sale price any additional charge for afreeze-conditioning additive in figuring the tax.

Coal used by the producer. This meansthat you used the coal in other than a miningprocess. A mining process means the samefor this purpose as for percentage depletion.For example, the tax does not apply if youbreak the coal, clean it, size it, or apply anyother process considered mining under therules for depletion before selling the coal. Inthis case, the tax applies only when you sellthe coal. But the tax does apply when you usethe coal as fuel or as an ingredient in makingcoke. The tax does not apply to coal used asfuel in the coal drying process since it isconsidered to be used in a mining process.

You must use a constructive sale price tofigure the tax under the 4.4% rate if you usethe coal in other than a mining process. Baseyour constructive sale price on sales of a likekind and grade of coal by you or other pro-ducers made f.o.b. mine or cleaning plant.Normally, you use the same constructiveprice used to figure your percentage depletiondeduction.

Blending. If you blend surface-mined coalwith underground-mined coal during thecleaning process, you must figure the excisetax on the sale of the blended, cleaned coal.But figure the tax separately for each type ofcoal in the blend. Base the tax on the amountof each type in the blend if you can determinethe proportion of each type of coal containedin the final blend. Base the tax on the ratioof each type originally put into the cleaningprocess if you cannot determine the propor-tion of each type of coal in the blend. How-ever, the tax is limited to 4.4% of the saleprice per ton of the blended coal.

Exemption from tax. The tax does not applyto sales of lignite coal and imported coal.There are no exemptions from the tax on thesales of taxable coal.

TiresTax is imposed on the sale or use by themanufacturer of tires of the type used onhighway vehicles and made all or in part ofrubber.

The tax is based on the weight of eachtire. The tax does not apply to tires that weigh40 pounds or less. The tax rate is shown inthe Form 720 instructions.

Determination of weight. Do not includemetal rims or rim bases in figuring the totalweight of a tire. But include wire staples,darts, clips, and other material or fasteningdevices that form a part of the tire or are re-quired for its use in the total weight of the tire.

Consider studs as part of a tire, and in-clude them in the total weight. The totalweight of a tubeless tire or inner tube in-cludes the weight of the air valve and stemor any other mechanism that functions as apart of the tire or attaches to the inner tubeand is used in connection with inflating the tireor tube or maintaining its air pressure.

When you sell tires with metal rims or rimbases attached, you must keep records es-tablishing what portion of the total weight ofthe finished product represents the tire with-out the metal rim or rim base.

Alternative method of determiningweight. If you have received permission fromthe IRS, you may determine total weight oftires that you manufactured and sold usingthe average weight for each type, size, grade,and classification.

See Revenue Procedure 92–82, in Cu-mulative Bulletin 1992–2, for several alterna-tive methods that you may use to determinetire weight.

Manufacturer's retail stores. The excise taxon tires is imposed at the time the tires aredelivered to the manufacturer-owned retailstores, not at the time of sale.

Tires on imported articles. The importer ofan article equipped with taxable tires istreated as the importer of the tires and is lia-

ble for the tire excise tax when the article issold (except in the case of an automobile buschassis or body with tires).

Tires not subject to tax. The tax does notapply to the following items.

• Tires of extruded tiring with an internalwire fastening agent.

• Tires manufactured from a thermoplasticsubstance known commercially aspolyethylene.

• Recapped or retreaded tires if the tireshave been sold previously in the UnitedStates and were taxable tires at the timeof sale.

• Tire carcasses not suitable for commer-cial use.

• Tires for use on qualifying intercity, local,and school buses.

Qualifying intercity or local bus. Thisis any bus used mainly (more than 50%) totransport the general public for a fee and thateither operates on a schedule along regularroutes or seats at least 20 adults (excludingthe driver).

Qualifying school bus. This is any busused mainly (85% or more) to transport stu-dents and employees of schools.

Credit or refund. A credit or refund is al-lowable if the tax on a tire has been paid onits sale by the manufacturer and the tire issold by any person on, or in connection with,any other article that is:

• An automobile bus chassis or body,

• Exported,

• Sold to a state or local government,

• Sold to a nonprofit educational organiza-tion, or

• Used or sold for use as supplies for ves-sels.

The person who sold the article is eligible tomake the claim.

Gas Guzzler TaxTax is imposed on the sale by the manufac-turer or importer of automobiles of a modeltype that has a fuel economy standard asmeasured by the Environmental ProtectionAgency (EPA) of less than 22.5 miles pergallon. If you import an automobile for per-sonal use, you may be liable for this tax.Figure the tax on Form 6197, Gas GuzzlerTax, as discussed later. The tax rate is basedon fuel economy rating. The tax rates for thegas guzzler tax are shown on Form 6197.

Sale. Sale includes the manufacturer's useof an automobile or the first lease of an au-tomobile. For rules on paying the tax in thecase of a first lease, see section 4217(e)(2)of the Internal Revenue Code.

Manufacturer. Manufacturer includes a pro-ducer or importer. The tax applies to auto-mobiles imported for business or personaluse. Consider the lengthening of an existingautomobile (for example, to make a stretchlimousine) to be the manufacture of an auto-mobile.

Automobiles. An automobile is any four-wheeled vehicle that is:

• Rated at an unloaded gross vehicleweight of 6,000 pounds or less,

• Propelled by an engine powered by gas-oline or diesel fuel, and

• Intended for use mainly on public streets,roads, and highways.

Limousines. The tax generally applies tolimousines (including stretch limousines) re-gardless of their weight.

Vehicles not subject to tax. For the gasguzzler tax, the following vehicles are notconsidered automobiles.

1) Vehicles operated exclusively on a railor rails.

2) Vehicles sold for use and used primarily:

a) As ambulances or combinationambulance-hearses,

b) For police or other law enforcementpurposes by federal, state, or localgovernments, or

c) For firefighting purposes.

3) Vehicles defined in 49 USC 32901(1978) as non-passenger automobiles.

You can sell a vehicle described in item(2) tax free only when you make the sale di-rectly to a purchaser for the described emer-gency use and you and the purchaser (otherthan a state or local government) are regis-tered. However, if you pay the tax on a vehi-cle that is used or resold for an emergencyuse, you can either file a claim for the refundof the tax paid on the sale on Form 8849 ortake a credit on Form 720. You must supportthe claim by evidence of the intended use.You must establish that you repaid the tax tothe purchaser.

Treat an Indian tribal government as astate only if the police or other law enforce-ment purposes are an essential tribal gov-ernment function.

Model type. Model type is a particular classof automobile as determined by EPA regu-lations.

Fuel economy. Fuel economy is the averagenumber of miles that the automobile travelson a gallon of gasoline (or diesel fuel)rounded to the nearest 0.1 mile as figured bythe EPA.

Imported automobiles. The tax appliesto automobiles that do not have a prototype-based fuel economy rating assigned by theEPA. An automobile that is imported into theUnited States without a certificate of con-formity to United States emission standardsand which has no assigned fuel economyrating must be either:

• Converted by installation of emissioncontrols to conform in all material re-spects to an automobile that is alreadycertified for sale in the United States, or

• Modified by installation of emission con-trol components and individually testedto demonstrate emission compliance.

An imported automobile that has beenconverted to conform to an automobile al-ready certified for sale in the United Statesmay use the fuel economy rating assigned tothe conformed automobile.

A fuel economy rating is not generallyavailable for those imported automobiles thathave been modified because the EPA doesnot require a highway fuel economy test onthem. A separate highway fuel economy testwould be required to devise a fuel economyrating (otherwise the automobile is presumedto fall within the lowest fuel economy rating).

For more information about fuel economyratings for imported automobiles, see Reve-nue Ruling 86–20 and Revenue Procedure86–9 in Cumulative Bulletin 1986–1, andRevenue Procedure 87–10 in CumulativeBulletin 1987–1.

Exemptions. No one is exempt from the gasguzzler tax, including the federal government,state and local governments, and nonprofiteducational organizations. However, see Ve-hicles not subject to tax, earlier.

Form 6197. Use Form 6197 to figure your taxliability for each quarter. Attach Form 6197to your Form 720 for the quarter. See the in-structions for Form 6197 for more informationabout filing and the special rules for filing ifyou import an automobile for personal use.

VaccinesTax is imposed on certain vaccines sold bythe manufacturer, producer, or importer in theUnited States. A taxable vaccine means anyof the following vaccines.

• Any vaccine containing diphtheria toxoid.

• Any vaccine containing tetanus toxoid.

• Any vaccine containing pertussis bacte-ria, extracted or partial cell bacteria, orspecific pertussis antigens.

• Any vaccine containing polio virus.

• Any vaccine against measles.

• Any vaccine against mumps.

• Any vaccine against rubella.

• Any vaccine against hepatitis B.

• Any vaccine against chicken pox.

• Any vaccine against rotavirusgastroenteritis.

• Any conjugate vaccine againststreptococcus pneumoniae.

• Any HIB vaccine.

The tax is 75 cents per dose of each tax-able vaccine. The tax on a vaccine that con-tains more than one taxable vaccine is 75cents times the number of doses of eachtaxable vaccine.

Exemptions. The tax does not apply if thesale is:

• To the first or second purchaser for fur-ther manufacture, or

• For export, other than to a U.S. pos-session.

Credit or refund. A credit or refund (withoutinterest) is available if the vaccine is:

• Returned to the person who paid the tax(other than for resale), or

• Destroyed.

The claim for a credit or refund must be filedwithin 6 months after the vaccine is returnedor destroyed.

Conditions to allowance. To claim acredit or refund, the person who paid the taxmust have repaid or agreed to repay the taxto the ultimate purchaser of the vaccine orobtained the consent of such purchaser toallowance of the credit or refund.

Retail Tax onHeavy Trucks,Trailers, and TractorsA tax of 12% of the sales price is imposedon the first retail sale of the following articles,including related parts and accessories soldon or in connection with, or with the sale of,the articles. The seller is liable for the tax.

• Truck chassis and bodies.

• Truck trailer and semitrailer chassis andbodies.

• Tractors of the kind chiefly used forhighway transportation in combinationwith a trailer or semitrailer.

A sale of a truck, truck trailer, or semitraileris considered a sale of a chassis and a body.

Chassis or body. A chassis or body is tax-able only if you sell it for use as a componentpart of a highway vehicle that is a truck, trucktrailer or semitrailer, or a tractor of the kindchiefly used for highway transportation incombination with a trailer or semitrailer.

Highway vehicle. A highway vehicle isone designed to carry a load over highways,whether or not it is also designed to performother functions.

Vehicles not considered highway vehi-cles. The following vehicles are not highwayvehicles for purposes of the retail tax.

1) Specially designed mobile machinery fornontransportation functions.

2) Certain trailers and semitrailers speciallydesigned to perform nontransportationfunctions off the highway.

3) Certain vehicles specially designed foroff-highway transportation.

A vehicle described in item (3) is not a high-way vehicle if it is designed primarily to carrya specific type of load other than over thepublic highway for certain operations (con-struction, manufacturing, mining, processing,farming, drilling, timbering, or similar oper-ations) and its use in carrying this load overpublic highways is substantially limited or im-paired because of its design.

Gross vehicle weight. The tax does notapply to truck chassis and bodies suitable foruse with a vehicle that has a gross vehicleweight of 33,000 pounds or less. It also doesnot apply to truck trailer and semitrailerchassis and bodies suitable for use with atrailer or semitrailer that has a gross vehicleweight of 26,000 pounds or less. Tractors(and truck chassis completed as tractors) aresubject to tax without regard to gross vehicleweight.

The gross vehicle weight means themaximum total weight of a loaded vehicle.Generally, this maximum total weight is thegross vehicle weight rating provided by themanufacturer or determined by the seller ofthe completed article.

The gross vehicle weight must be deter-mined by the seller solely on the basis of thestrength of the chassis frame and the axlecapacity and placement and, in the case ofsemitrailers, the weight to be borne by thetowing vehicle. In making this determination,the seller may not take into account readilyattachable components to lower the grossvehicle weight rating. “Readily attachablecomponents” include springs, brakes, rims,and tires.

Parts or accessories. The tax applies toparts or accessories sold on or in connectionwith, or with the sale of, a taxable article. Forexample, if at the time of the sale by theretailer, the part or accessory has been or-dered from the retailer, the part or accessorywill be considered as sold in connection withthe sale of the vehicle. The tax applies in thiscase whether or not the retailer bills the partsor accessories separately.

If the retailer sells a taxable chassis, body,or tractor without parts or accessories con-sidered essential for the operation or ap-pearance of the taxable article, the sale of theparts or accessories by the retailer to thepurchaser is considered made in connectionwith the sale of the taxable article eventhough they are shipped separately, at thesame time or on a different date. The tax ap-plies unless there is evidence to the contrary.For example, if a retailer sells to any persona chassis and the bumpers for the chassis,or sells a taxable tractor and the fifth wheeland attachments, the tax applies to the partsor accessories regardless of the method ofbilling or the time at which the shipments weremade. The tax does not apply to parts andaccessories that are spares or replacements.

Separate purchase. The tax generallyapplies to the price of a part or accessory andits installation if the following conditions aremet.

• The owner, lessee, or operator of anyvehicle that contains a taxable article in-stalls, or causes to be installed, any partor accessory on the vehicle.

• The installation occurs within 6 monthsafter the vehicle is first placed in service.

The owners of the trade or business in-stalling the parts or accessories aresecondarily liable for the tax.

A vehicle is placed in service on the datethat the owner takes actual possession of thevehicle. This date is established by a signeddelivery ticket or other comparable documentindicating delivery to and acceptance by theowner.

The tax does not apply if the installed partor accessory is a replacement part. The taxalso does not apply if the total price of theparts and accessories, including installationcharges, during the 6-month period is $1,000or less. However, if the total price is morethan $1,000, the tax applies to the cost of allparts and accessories (and installationcharges) during that period.

Example. You bought a taxable vehicleand placed it in service on April 8. On May3, you bought and installed parts and acces-sories at a cost of $850. On July 15, youbought and installed parts and accessories for$300. Tax of $138 applies (12% of $1150) onJuly 15. Also, tax will apply to any costs ofadditional parts and accessories installed onthe vehicle before October 8.

Table 1. Tax Base

Transaction Figuring the Base

Sale by the manufacturer, producer,importer, or related person

Sale by the dealer

Long-term lease by the manufacturer,producer, importer, or related person

Short-term lease by the manufacturer,producer, importer, or related person

Short-term lease by a lessor other than themanufacturer, producer, importer, or relatedperson

Short-term lease where the articles areregularly sold at arm’s length

Sales price plus (presumed markuppercentage � sales price)

Total consideration paid for the itemincluding any charges incident to placing itin a condition ready for use

Constructive sales price plus (presumedmarkup percentage � constructive salesprice)

Constructive sales price at which such orsimilar articles are sold

Price for which the article was sold to thelessor plus the cost of parts andaccessories installed by the lessor plus apresumed markup percentage

Lowest established retail price in effect atthe time of the taxable use

If a person other than the manufacturer,producer, importer, or related person leasesan article in a short-term lease that is con-sidered a taxable use, figure the tax on a taxbase of the price for which the article was soldto the lessor plus the cost of parts and ac-cessories installed by the lessor and a pre-sumed markup percentage.

Related person. A related person is anyperson that is a member of the same con-trolled group as the manufacturer, producer,or importer. Do not treat as a related persona person that sells the articles through a per-manent retail establishment in the normalcourse of being a retailer if that person hasrecords to prove that the article was sold fora price that included a markup equal to orgreater than the presumed markup percent-age.

General rule for sales by dealers to theconsumer. In the case of a taxable sale,other than a long-term lease, by a personother than a manufacturer, producer,importer, or related person, your tax base isthe retail sales price as discussed later underDetermination of tax base.

When you sell an article to the consumer,generally you do not add a presumed markupto the tax base. However, you do add amarkup if all the following apply.

• You do not perform any significant activ-ities relating to the processing of the saleof a taxable article.

• The main reason for processing the salethrough you is to avoid or evade thepresumed markup.

• You do not have records proving that thearticle was sold for a price that includeda markup equal to or greater than thepresumed markup percentage.

In these cases, your tax base is the salesprice plus an amount equal to the presumedmarkup percentage times that selling price.

Determination of tax base. These rulesapply to both normal retail sales price andpresumptive retail sales price computations.To arrive at the amount on which the tax isbased, the price is the total consideration paid(including trade-in allowance) for the item andincludes any charge incident to placing thearticle in a condition ready for use. However,see Presumptive retail sales price, earlier.

Exclusions from tax base. Exclude fromthe tax base the retail excise tax imposed onthe sale. Exclude any state or local retailsales tax if stated as a separate charge fromthe price whether the sales tax is imposed onthe seller or purchaser. Also exclude thevalue of any used component of the articlefurnished by the first user of the article.

CAUTION!

The value of tires is included in the taxbase. See Tire credit, later.

Exclude charges for transportation, deliv-ery, insurance, and installation (other thaninstallation charges for parts and accessories,discussed earlier) and other expenses in-curred in connection with the delivery of anarticle to a purchaser. These expenses arethose incurred in delivery from the retaildealer to the customer. In the case of deliverydirectly from the manufacturer to the dealer'scustomer, include the transportation and de-livery charges to the extent the charges do

First retail sale defined. The sale of an ar-ticle is treated as a first retail sale, and theseller will be liable for the tax imposed on thesale unless one of the following exceptionsapplies.

• There has been a prior taxable sale,lease, or use of the article (except in thecase of a chassis or body of a trailer orsemitrailer).

• The sale qualifies as a tax-free sale undersection 4221 of the Internal RevenueCode (see Sales exempt from tax, later).

• The seller in good faith accepts from thepurchaser a statement signed underpenalties of perjury and executed in goodfaith that the purchaser intends to resellthe article or lease it on a long-term basis.

A long-term lease is a lease with a termof 1 year or more. A long-term lease beforea first retail sale is treated as a taxable sale.The tax is imposed on the lessor at the timeof the lease.

A short-term lease (a lease with a term ofless than 1 year) by a manufacturer, pro-ducer, importer, related person, or purchaserbefore a taxable sale is treated as a taxableuse. The tax is imposed on the lessor at thetime of the lease.

A vehicle that is exported before its firstretail sale, used in a foreign country, and thenreturned to the U.S., is subject to the retail taxon its first retail sale after importation.

Tax on resale of tax-paid trailers andsemitrailers. The tax applies to a trailer orsemitrailer resold within 6 months after havingbeen sold in a taxable sale. The seller liablefor the tax on the resale can claim a creditequal to the tax paid on the prior taxable sale.The credit cannot exceed the tax on the re-sale.

Use treated as sale. If any person usesa taxable article before the first retail sale ofthe article, that person is liable for the tax asif the article had been sold at retail by thatperson. Figure the tax on the price at whichsimilar articles are sold in the ordinary courseof trade by retailers. The tax attaches whenthe use begins.

If the seller of an article regularly sells thearticles at retail in arm's-length transactions,

figure the tax on its use on the lowest estab-lished retail price for the articles in effect atthe time of the taxable use.

If the seller of an article does not regularlysell the articles at retail in arm's-length trans-actions, a constructive price on which the taxis figured will be determined by the IRS afterconsidering the selling practices and pricestructures of sellers of similar articles.

If a seller of an article incurs liability for taxon the use of the article and later sells orleases the article in a transaction that other-wise would be taxable, liability for tax is notincurred on the later sale or lease.

Presumptive retail sales price. There arerules to ensure that the tax base of trans-actions considered to be taxable sales in-cludes either an actual or presumed markuppercentage. The following discussions showhow you figure the presumptive retail salesprice depending on the type of transactionand the persons involved in the transaction.

The presumed markup percentage tobe used for trucks and truck-tractors is 4%.But for truck trailers and semitrailers and re-manufactured trucks and tractors, the pre-sumed markup percentage is zero.

Sale. Generally, you figure the tax im-posed on a sale by a manufacturer, producer,importer, or related person on a tax base ofthe sales price plus an amount equal to thepresumed markup percentage times thatsales price.

Long-term lease. In the case of a long-term lease by a manufacturer, producer,importer, or related person, figure the tax ona tax base of the constructive sales price plusan amount equal to the presumed markuppercentage times the constructive sales price.

Short-term lease. When a manufacturer,producer, importer, or related person leasesan article in a short-term lease that is con-sidered a taxable use, figure the tax on aconstructive sales price at which those orsimilar articles generally are sold in the ordi-nary course of trade by retailers.

But if the lessor in this situation regularlysells articles at retail in arm's-length trans-actions, figure the tax on the lowest estab-lished retail price in effect at the time of thetaxable use.

not exceed what it would have cost to ship thearticle to the dealer.

Exclude amounts charged for machineryor equipment that does not contribute to thehighway transportation function of the vehicle,provided those charges are supported by ad-equate records. For example, for an industrialvacuum loader vehicle, exclude amountscharged for the vacuum pump and hose, filtersystem, material separator, silencer ormuffler, control cabinet, and ladder. Similarly,for a sewer cleaning vehicle, excludeamounts charged for the high pressure waterpump, hose components, and the vacuumpipe.

Sales not at arm's length. For any tax-able article sold (not at arm's length) at lessthan the fair market price, figure the excisetax on the price for which similar articles aresold at retail in the ordinary course of trade.

A sale is not at arm's length if either of thefollowing apply.

• One of the parties is controlled (in law orin fact) by the other or there is commoncontrol, whether or not the control is ac-tually exercised to influence the salesprice.

• The sale is made under special arrange-ments between a seller and a purchaser.

Restoration of worn vehicles. The taxdoes not apply to the sale or use of a wornvehicle restored to a usable condition if thecost of the restoration is not more than 75%of the cost of a comparable new vehicle. Ifthe restoration includes the use of a glider kit,the tax does not apply to the sale or use ofthe restored vehicle as long as the total costof the repair is not more than the 75% limit.Add the cost of non-emergency repairs,modifications, and upgrades occurring overany 6-month period in figuring the 75% limit.

Repairs and modifications. The taxdoes not apply to the sale or use of an articlethat has been repaired or modified unless thecost of the repairs and modifications is morethan 75% of the retail price of a comparablenew article. This includes modifications thatchange the transportation function of an arti-cle or restore a wrecked article to a functionalcondition. However, this exception generallydoes not apply to an article that was notsubject to the tax when it was new.

Installment sales. If the first retail saleis an installment sale, or other form of sale inwhich the sales price is paid in installments,the tax arises at the time of the sale. The taxis figured on the entire sales price. No partof the tax is deferred because the sales priceis paid in installments.

Further manufacture. The tax does notapply to the use by a person of a taxable ar-ticle as material in the manufacture or pro-duction of, or as a component part of, anotherarticle to be manufactured or produced bythat person. Do not treat a person as engagedin the manufacture of any article merely be-cause that person combines the article withany of the following items.

• Coupling device (including any fifthwheel).

• Wrecker crane.

• Loading and unloading equipment (in-cluding any crane, hoist, winch, or powerliftgate).

• Aerial ladder or tower.

• Ice and snow control equipment.

• Earth moving, excavation, and con-struction equipment.

• Spreader.

• Sleeper cab.

• Cab shield.

• Wood or metal floor.

Merely combining articles as described heredoes not give rise to taxability.

Articles exempt from tax. The tax on heavytrucks, trailers, and tractors does not apply tosales of the following articles.

Rail trailers and rail vans. This is anychassis or body of a trailer or semitrailer de-signed for use both as a highway vehicle anda railroad car (including any parts and ac-cessories designed primarily for use on andin connection with it). Do not treat a piggybacktrailer or semitrailer as designed for use as arailroad car.

Parts and accessories. This is any partor accessory sold separately from the truckor trailer, except as described earlier in Partsor accessories and Separate purchase.

Trash containers. This is any box, con-tainer, receptacle, bin or similar article thatmeets all the following conditions.

• Designed to be used as a trash container.

• Not designed to carry freight other thantrash.

• Not designed to be permanently mountedor permanently affixed to a truck chassisor body.

House trailers. This is any house trailer(regardless of size) suitable for use in con-nection with either passenger automobiles ortrucks.

Camper coaches or bodies for self-propelled mobile homes. This is any articledesigned to be mounted or placed on trucks,truck chassis, or automobile chassis and tobe used primarily as living quarters or camp-ing accommodations on and off the trucks.Further, the tax does not apply to chassisspecifically designed and constructed to ac-commodate and transport self-propelled mo-bile home bodies.

Farm feed, seed, and fertilizer equip-ment. This is any body primarily designed toprocess or prepare, haul, spread, load, orunload feed, seed, or fertilizer to or on farms.This exemption applies only to the farmequipment body (and parts and accessories)and not to the chassis upon which the farmequipment is mounted.

Ambulances and hearses. This is anyambulance, hearse, or combinationambulance-hearse.

Truck-tractors. This is any truck-tractorspecifically designed for use in shifting semi-trailers in and around freight yards and freightterminals.

Concrete mixers. This is any article de-signed to be placed or mounted on a truck,truck trailer, or semitrailer chassis to be usedto process or prepare concrete.

Sales exempt from tax. The following salesare ordinarily exempt from tax.

• To a state or local government for its ex-clusive use.

• To Indian tribal governments, but only ifthe transaction involves the exercise ofan essential tribal government function.

• To a nonprofit educational organizationfor its exclusive use.

• For use by the purchaser for furthermanufacture of other taxable articles (seebelow).

• For export or for resale by the purchaserto a second purchaser for export (seebelow).

• To the United Nations for official use.

Registration. In general the seller andbuyer must be registered for a sale to be taxfree. Certain registration exceptions apply inthe case of sales to state and local govern-ments and to foreign purchasers for export.

Further manufacturing. If you buy arti-cles tax free and resell or use them other thanin the manufacture of another article, you areliable for the tax on their resale or use justas if you had manufactured and sold them.

Export returned to United States. If anarticle is sold tax free for export and subse-quently is returned to the United States in anunused and undamaged condition, theimporter must pay the tax on any later saleor use of the article in the United States.

Credits and refunds. A credit or refund ofthe tax on heavy trucks may be allowable ifthe tax has been paid with respect to an arti-cle and, before any other use, such article isby any person used as a component part ofanother taxable heavy truck manufactured orproduced. The person using the article as acomponent part is eligible for the credit orrefund.

A credit or refund is allowable if, beforeany other use, an article is, by any person:

• Exported,

• Used or sold as supplies for vessels,

• Sold to a state or local government for itsexclusive use, or

• Sold to a nonprofit educational organiza-tion for its exclusive use.

A credit or refund is also allowable if there isa price readjustment.

See Conditions to allowance under Cred-its and Refunds, later.

Tire credit. A credit is allowed against thetax on heavy trucks if tires are sold on or inconnection with the sale of the article. Thecredit is equal to the manufacturers excise taximposed on the tires (discussed earlier).

Ship Passenger TaxA tax of $3 per passenger is imposed oncertain ship voyages, as explained later underTaxable situations. The tax is imposed onlyonce for each passenger, either at the timeof first embarkation or disembarkation in theUnited States.

The person providing the voyage is liablefor the tax.

Voyage. A voyage is the vessel's journeythat includes the outward and homeward tripsor passages. The voyage starts when thevessel begins to load passengers and con-tinues during the entire period until the vesselhas completed at least one outward and onehomeward passage. The tax may be imposedeven if a passenger does not make both anoutward and a homeward passage as long

as the voyage begins or ends in the UnitedStates.

Passenger. A passenger is an individualcarried on the vessel other than the Masteror a crew member or other individual engagedin the business of the vessel or its owners.

Example 1. John Smith works as a guestlecturer. The cruise line hired him for thebenefit of the passengers. Therefore, he isengaged in the business of the vessel and isnot a passenger.

Example 2. Marian Green is a travelagent. She is taking the cruise as a promo-tional trip to determine if she wants to offer itto her clients. She is a passenger.

Taxable situations. There are two taxablesituations. The first situation includes voyageson commercial passenger vessels extendingover one or more nights. A voyage extendsover one or more nights if it extends for morethan 24 hours. A passenger vessel is anyvessel with stateroom or berth accommo-dations for more than 16 passengers.

The second situation includes voyages ona commercial vessel transporting passengersengaged in gambling on the vessel beyondthe territorial waters of the United States.Territorial waters of the United States arethose waters within the international boundaryline between the United States and any con-tiguous foreign country or within 3 nauticalmiles (3.45 statute miles) from low tide on thecoastline. If passengers participate as playersin any policy game or other lottery, or anyother game of chance for money or otherthing of value that the owner or operator ofthe vessel (or their employee, agent, orfranchisee) conducts, sponsors, or operates,the voyage is subject to the ship passengertax. The tax applies regardless of the durationof the voyage. A casual, friendly game ofchance with other passengers that is notconducted, sponsored, or operated by theowner or operator is not gambling for deter-mining if the voyage is subject to the shippassenger tax.

Luxury TaxThe luxury tax is imposed on the first retailsale of a passenger vehicle with a price ex-ceeding the base amount. The seller of thevehicle is liable for the luxury tax.

For 2000, the tax is 5% of the amount thesales price exceeds the base amount of$38,000. However, the base amount is in-creased for the following vehicles.

• For an electric vehicle, the base amountis increased by 50%.

• For a clean-fuel vehicle, the base amountis increased by the amount that the priceof the vehicle increases due to the in-stallation of retrofit parts and componentsthat permit the vehicle to be propelled bya clean-burning fuel.

Passenger vehicles. Generally, the tax ap-plies if the passenger vehicle has an un-loaded weight of 6,000 pounds or less. How-ever, the tax applies to trucks and vans only

if they have a maximum loaded weight of6,000 pounds or less. The tax applies to lim-ousines regardless of their weight.

Leases. Generally, a lease is considered asale of the vehicle. The sales price is thelowest price for which the vehicle is sold byretailers in the ordinary course of business.For rules on paying the tax on a lease, seesection 4217(e)(2) of the Internal RevenueCode.

Use treated as sale. If any person uses apassenger vehicle (other than as a demon-strator) before its first retail sale, the personis taxed on such use as if that person sold thevehicle at retail.

Parts and accessories. Certain parts oraccessories installed within six months ofthe date on which a passenger vehicle isplaced in service may be subject to the tax.The same rate of tax applies to parts andaccessories that applies to vehicles.

The owner, lessee, or operator of the ve-hicle is liable for the tax. If the part is installedby someone else, the installer is secondarilyliable for the tax.

The tax does not apply to any of the fol-lowing items.

• Replacement parts or accessories.

• Parts or accessories installed to help aperson with a disability operate, enter, orexit the vehicle.

• Parts or accessories that permit the ve-hicle to be propelled with a clean-burningfuel.

• Parts and accessories if the total cost(including installation) of all parts andaccessories does not exceed $1,000.

Exemptions. The luxury tax does not applyto the sale of a passenger vehicle for the fol-lowing purposes.

• For use exclusively in public safety, lawenforcement, or public works activities bythe federal, state, or local government.Treat an Indian tribal government as astate only if the use is an essential tribalgovernment function.

• For use exclusively in providing emer-gency medical services by any person.

• For use by the purchaser exclusively inthe business of transporting persons orproperty for hire or compensation.

• For export. The requirements for makinga sale of an article for export exempt fromthe manufacturers tax also applies tothese sales.

Resale or substantial non-exempt use.The tax applies to vehicles that were originallyexempt from the luxury tax if the purchaserresells the vehicle or makes a substantialnon-exempt use of the vehicle within 2 yearsafter the date of purchase.

Imported vehicles. The tax applies to taxa-ble vehicles that are imported for sale or use(except for vehicles first used before January1, 1991). The tax is imposed on the first do-mestic sale or use of the vehicle.

Credit or refund. If the price of the vehicleis readjusted, the seller may qualify for acredit or refund of any tax overpaid. A read-justment of the price may occur if either of thefollowing events occurs.

• The vehicle is returned or repossessed.

• A bona fide discount, rebate, or allow-ance is applied against the price of thevehicle.

For information on conditions to allowancethat apply to credits and refunds, see Creditsand Refunds, later.

Luxury Tax Computation

1. Enter the retail price of the vehicle ...

2. Enter additions to the retail price ......

3. Add lines 1 and 2 ..............................

4. Enter subtractions from the retailprice ...................................................

5. Adjusted sales price. Subtract line 4from line 3 .........................................

6. Base amount for 2000 ....................... $38,000 *

7. Taxable adjusted sales price. Sub-tract line 6 from line 5. If line 6 isgreater than line 5, make noentry—the luxury tax does not applyto the vehicle .....................................

8. Tax rate for 2000 ............................... .05 (5%)

9. Luxury tax. Multiply the amount online 7 by the tax rate on line 8 ..........

Line 1. The retail price is the total consideration paidin cash, cash equivalents, goods, services, and thewholesale fair market value of any trade-in minusany payoff made by the seller and any cash givenback to the customer. For leases, enter the lowestprice for which the vehicle is sold by retailers in theordinary course of business.Line 2. Additions include the following items if statedseparately on the invoice and not included in theretail price.

• Preparation charges.

• Delivery charges.

• Packaging.

• Parts or accessories sold on or in connectionwith the vehicle.

• Taxes (except the luxury tax and state salestax).

• Commissions.

• Mandatory warranties.

• Any other charges not listed above.Line 4. Subtractions include the following if they areseparately stated on the invoice and are included inline 3.

• State and local sales taxes.

• Title and registration charges.

• Optional warranty charges.

• Rebates and price adjustments paid.

• The value of used components supplied by thepurchaser.

* The base amount for an electric vehicle is $57,000.The base amount for a clean-fuel vehicle is $38,000plus the amount the price of the vehicle increasesdue to the installation of retrofit parts and compo-nents that permit the vehicle to be propelled by aclean-burning fuel.

Other Excise TaxesExcise taxes are imposed on both the follow-ing items.

• Policies issued by foreign insurers.

• Obligations not in registered form.

Policies Issuedby Foreign InsurersTax is imposed on policies of insurance is-sued by foreign insurers. The following taxrates apply to each dollar (or fraction thereof)of the premium paid.

• Casualty insurance and indemnity, fidel-ity, and surety bonds: 4 cents (for ex-ample, on a premium payment of $10.10,the tax is 44 cents).

• Life, sickness, and accident insurance,and annuity contracts: 1 cent (for exam-ple, on a premium payment of $10.10, thetax is 11 cents).

• Reinsurance policies covering any of thecontracts taxable in the two precedingparagraphs: 1 cent.

However, the tax does not apply to casualtyinsurance premiums paid to foreign insurersfor coverage of export goods in transit to for-eign destinations.

Premium. Premium means the agreed priceor consideration for assuming and carryingthe risk or obligation. It includes any addi-tional charge or assessment that is payableunder the contract, whether in one sum orinstallments. If premiums are refunded, claimthe tax paid on those premiums as an over-payment against tax due on other premiumspaid or file a claim for refund.

When liability attaches. The liability for thistax attaches when the premium payment istransferred to the foreign insurer or reinsurer(including transfers to any bank, trust fund,or similar recipient designated by the foreigninsurer or reinsurer) or to any nonresidentagent, solicitor, or broker. A person can paythe tax before the liability attaches if the per-son keeps records consistent with that prac-tice.

Person liable for the tax. The personwho makes the payment of the premium tothe foreign insurer or to any nonresidentagent, solicitor, or broker pays the tax. Thisis the resident person who actually transfersthe money or its equivalent to the insurer oragent.

RECORDS

The person required to pay this taxmust keep accurate records thatidentify each policy or instrument

subject to tax. These records must clearlyestablish the type of policy or instrument, thegross premium paid, the identity of the in-sured and insurer, and the total premiumcharged. If the premium is to be paid in in-stallments, the records must also establishthe amount and anniversary date of each in-stallment.

The records must be kept at the place ofbusiness or other convenient location for atleast 3 years after the later of the date anypart of the tax became due, or the date anypart of the tax was paid. During this period,the records must be readily accessible to theIRS.

The person having control or possessionof a policy or instrument subject to this taxmust keep the policy for at least 3 years afterthe date any part of the tax on it was paid.

Treaty-based positions under IRC 6114.You may have to file an annual report dis-closing the amount of premiums that are ex-empt from United States excise tax as a resultof the application of a treaty with the UnitedStates that overrides (or otherwise modifies)any provision of the Internal Revenue Code.

Attach any disclosure statement to the firstquarter Form 720. You may be able to useForm 8833, Treaty-Based Return PositionDisclosure Under Section 6114 or 7701(b),as a disclosure statement. See the Form 720instructions for how and where to file.

See Revenue Procedure 92–14 in Cumu-lative Bulletin 1992–1 for procedures you canuse to claim a refund of this tax under certainU.S. treaties.

Obligations Notin Registered FormTax is imposed on any person who issues aregistration-required obligation not in regis-tered form. The tax is:

• 1% of the principal of the obligation,multiplied by

• The number of calendar years (orportions of calendar years) during theperiod starting on the date the obligationwas issued and ending on the date itmatures.

A registration-required obligation is anyobligation other than one that meets any ofthe following conditions.

1) Is issued by a natural person.

2) Is not of a type offered to the public.

3) Has a maturity (at issue) of not morethan one year.

4) Can only be issued to a foreign person.

For item (4), if the obligation is not in reg-istered form, the interest on the obligationmust be payable only outside the UnitedStates and its possessions. Also, the obli-gation must state on its face that any U.S.person who holds it shall be subject to limitsunder the U.S. income tax laws.

Filing Form 720File Form 720 for each calendar quarter untilyou file a final Form 720. If you are not re-porting a tax that you normally report, enterzero on the line for that tax.

Be sure to sign the return. An unsignedreturn is not considered filed.

You may be required to file your returnson a monthly or semimonthly basis insteadof quarterly if you do not make deposits asrequired (see Deposit Requirements, later)or are liable for the excise tax on gasoline,diesel fuel, or kerosene and meet certainconditions.

Form 720. The form has various sections.

• Part I consists of excise taxes generallyrequired to be deposited (See DepositRequirements, later).

• Part II consists of excise taxes that areNOT required to be deposited.

• Part III consists of the lines for figuringyour tax liability, showing any adjust-ments and claims, and indicating theamount of your deposits.

• Schedule A, Excise Tax Liability, is usedto report your net tax liability for eachsemimonthly period in the quarter. Com-plete it if you have an entry in Part I.

• Schedule C, Adjustments and Claims, isused if you have an entry for adjustmentsand claims in Part III.

Forms attached to Form 720. You mayhave to attach the following forms.

• Form 6197 for the gas guzzler tax.

• Form 6627 for environmental taxes.

Employer identification number. If you fileForm 720, you generally need an employeridentification number (EIN). If you do not havean EIN, you need to file Form SS–4, Appli-cation for Employer Identification Number.You can get a Form SS–4 from the IRS orfrom the Social Security Administration. Ifyou do not receive an EIN by the time a returnis due, file your return anyway and write “Ap-plied for” in the space for the EIN.

TIPYou can get an EIN immediately bycalling the Tele-TIN number for theservice center for your state. See the

Form SS–4 instructions.

Special one-time filing. If you import a ve-hicle, you may be eligible to make a one-timefiling of Form 720 for the gas guzzler tax orthe luxury tax if you meet the following threeconditions.

• You do not use the vehicle in the courseof your trade or business.

• You do not import gas guzzling cars orluxury vehicles in the course of your tradeor business.

• You are not required to file Form 720 toreport any other excise taxes.

File Form 720 for the quarter in which youincur the tax liability. Attach any requiredform. Pay the full tax with the return. No de-posits are required. Check the one-time filingbox on page 1, Form 720.

Final return. File a final return if any of thefollowing apply to you.

• You go out of business.

• You stop collecting and paying air trans-portation and communications taxes.

• You will not owe excise taxes that arereportable in future quarters.

Return due dates. If any due date falls ona Saturday, Sunday, or legal holiday, you canfile the return on the next business day.

Returns for all excise taxes other thanozone-depleting chemicals, communi-cations, and air transportation taxes mustbe filed by the following due dates.

Quarter Covered Due Dates

January, February, March .................... April 30April, May, June .................................... July 31July, August, September ...................... October 31October, November, December ............ January 31

Returns for taxes on ozone-depletingchemicals, communications, and airtransportation are due as follows.

You must report the floor stocks tax im-posed on ODCs held on January 1, as dis-cussed earlier, on the return for the secondcalendar quarter filed by August 31 of theyear that the tax is imposed.

If you must file a Form 720 for a quarterin which you report two or more excise taxesthat are due on different dates, use the laterfiling date. File only one Form 720 for eachquarter. However, the time for making pay-ments and deposits of excise taxes is notextended.

Paying the TaxesExcise taxes are due and payable withoutassessment or notice. Unless you are re-quired to make deposits of taxes (as dis-cussed next), attach your full payment for thequarterly tax to your return when filed. Makeyour payment by check or money order pay-able to the United States Treasury. Write onyour check or money order your employeridentification number, Form 720, and the pe-riod covered by the payment.

Floor stocks tax on ODCs. You must de-posit the floor stocks tax imposed on ODCsheld on January 1, as discussed earlier, byJune 30 of the year that the tax is imposed.

Deposit RequirementsIf you have to file a quarterly excise tax returnon Form 720, you may have to make depositsof your excise taxes before the return is due.You are not required to make deposits if yournet tax liability for Part I taxes for the calendarquarter is not more than $2,000. You pay thetax when you file Form 720. See Exceptions,later.

Deposit coupons. If you do not make yourdeposits electronically (discussed next), theymust be accompanied by a Form 8109, Fed-eral Tax Deposit Coupon. If you do not havea coupon book, contact your local IRS officeor call 1–800–829–1040.

Electronic deposit requirement. The Elec-tronic Federal Tax Payment System (EFTPS)must be used to make electronic deposits.You must make electronic deposits for alldepository tax liabilities that occur after 1999if the total of your federal tax deposits madein 1998 (such as deposits for employment tax,excise tax, and corporate income tax) ex-ceeded $200,000.

If you do not meet the $200,000 threshold,electronic deposits are voluntary, even if youwere required to deposit electronically undera previous threshold. You can choose tomake deposits using EFTPS even though youare not required to use it. For information onEFTPS, see Revenue Procedure 97–33, inCumulative Bulletin 1997–2.

If you are required to make deposits byelectronic deposit and fail to do so, you maybe subject to a 10% penalty.

When To Make DepositsThese rules apply to taxes reported on Form720 for which deposits are required.

Generally, you make deposits for a semi-monthly period. A semimonthly period is thefirst 15 days of a month or the 16th daythrough the end of a month.

Taxes that are required to be depositedare grouped into the following classes of tax.

• 9-day-rule taxes.



• Alternative method taxes.

All excise taxes that must be deposited aresubject to the special September rules. Underthese rules, an additional deposit is requiredin September and different dates apply if youare required to make electronic deposits (seeElectronic deposit requirement, earlier). Thetaxes for that part of the period not coveredby the special rules should be deposited bythe normal due date.

The 9-day rule. Deposits of taxes for asemimonthly period generally are due by the9th day of the following semimonthly period.Therefore, the tax for the first semimonthlyperiod is due by the 24th of that month. Thetax for the second semimonthly period is dueby the 9th of the following month. Generally,this rule applies to taxes listed in Part I ofForm 720, except as discussed under thefollowing rules.

September rule. For 2000, deposit bySeptember 28 the taxes for the period begin-ning September 16 and ending September25. If making electronic deposits, deposit bySeptember 29 the taxes for the period begin-ning September 16 and ending September26.

The 30-day rule. Deposits of the taxes onozone-depleting chemicals (ODCs) andimported products containing ODCs for asemimonthly period are due by the end of thesecond following semimonthly period. There-fore, the tax for the first semimonthly periodis due by the 15th of the following month. Thetax for the second semimonthly period is dueby the end of the following month.

September rule. For 2000, deposit bySeptember 28 the tax for the last 16 days ofAugust and the period beginning September1 and ending September 10. If making elec-tronic deposits, deposit by September 29 thetax for the last 16 days of August and theperiod beginning September 1 and endingSeptember 11.

The 14-day rule. Deposits of gasoline, die-sel fuel, and kerosene taxes for a semi-monthly period by qualified persons made byelectronic funds transfer are due by the 14thday following the semimonthly period.Therefore, the tax for the first semimonthlyperiod is due by the 29th of that month. Thetax for the second semimonthly period is dueby the 14th of the following month. If the 14thday is a Saturday, Sunday, or legal holiday inthe District of Columbia, the due date is theimmediately preceding day that is not aSaturday, Sunday, or legal holiday.

A qualified person is an independent re-finer or a person whose average daily pro-duction of crude oil for the preceding calendarquarter was 1,000 barrels or less.

September rule. For 2000, deposit elec-tronically by September 29 the taxes for theperiod beginning September 16 and endingSeptember 26.

Alternative method. You may figure de-posits of communications and air transporta-tion taxes based on amounts actually col-lected and use the 9-day rule (discussedearlier) for making the deposits. You maychoose to figure deposits of these taxesbased on the amounts considered as col-lected (the “alternative method”).

If you use the alternative method, the taxincluded in amounts billed or tickets soldduring a semimonthly period is considered ascollected during the first 7 days of the secondfollowing semimonthly period. You must de-posit these taxes by the third banking dayafter that seventh day.

To use the alternative method, you mustkeep a separate account of the tax includedin the amounts billed or tickets sold during themonth. Report on Form 720 the tax includedin amounts billed or tickets sold and not theamount of tax that is actually collected.

Example. Under the alternative method,the tax included in amounts billed or ticketssold between December 1 and December 15,1999, is considered collected during the first7 days of January 2000. The deposit of thesetaxes is due by January 12, 2000, 3 bankingdays after January 7. These amounts are re-ported on the Form 720 for the first quarterof 2000.

September rule. For 2000, if you use thealternative method, deposit by September 28the communications and air transportationtaxes included in the amounts billed or ticketssold during the period beginning September1, and ending September 10. If making elec-tronic deposits, deposit by September 29 theair transportation and communications taxesincluded in the amounts billed or tickets soldduring the period beginning September 1 andending September 11.

Amount of DepositsDeposits for a semimonthly period generallyequal the amount of net tax liability incurredduring that period unless a safe harbor rule(discussed later) applies. Generally, you donot have to make a deposit for a period inwhich you incurred no tax liability. For com-munications and air transportation taxes,however, the amount deposited generallyequals the tax collected or considered ascollected (alternative method) during thesemimonthly period.

Net tax liability. Your net tax liability is yourtax liability for the period plus or minus anyadjustments allowable on Form 720. You mayfigure your net tax liability for a semimonthlyperiod by dividing your net liability incurredduring the calendar month by two. If you usethis method, you must use it for all semi-monthly periods in the calendar quarter.

September rule. To figure your net taxliability under the September rule, seesections 40.6302(c)–1 through 40.6302(c)–4of the regulations.

Safe Harbor RulesYou can use a safe harbor rule to figure if youhave deposited a sufficient amount of tax.The rules apply to each class of tax sepa-rately.

Quarter Covered Due Dates

January, February, March ................. May 31April, May, June ................................ August 31July, August, September ................... November 30October, November, December ........ February 28

Look-back quarter. This safe harbor ruleapplies to persons who filed a Form 720 forthe second calendar quarter (the look-backquarter) preceding the current quarter. If youfiled for the look-back quarter, you will meetthe semimonthly deposit requirement for thatclass of tax for the current quarter if all thefollowing conditions are met.

• The deposit of that tax for each semi-monthly period in the current quarter isnot less than 1/6 (16.67%) of the net taxliability reported for that tax for the look-back quarter.

• Each deposit is timely made.

• Any underpayment for the current quarteris paid by the due date of the return.

• For the semimonthly period for which theadditional deposit is required (Septemberrule), the additional deposit must be atleast 12.23% (11.12% non-EFTPS) of thenet tax liability reported for the look-backquarter.

In addition, if the due date of the return isextended because you report taxes with dif-ferent due dates, you must make a specialdeposit by the earlier due date. The specialdeposit must be at least equal to the amountof the underpayment of the taxes due on thatearlier date.

Example. In the third quarter, you reportboth fuel taxes (due date of October 31) andthe tax on ozone-depleting chemicals (duedate of November 30). You have an under-payment of the fuel taxes of $100. You mustmake a special deposit of the $100 by theOctober 31 deadline.

Tax rate increases. You must modify thesafe harbor rule based on the look-back-quarter liability for a class of tax on whichthere has been an increase in the rate of tax.You must figure your tax liability in the look-back quarter as if the increased rate had beenin effect. To qualify for the safe harbor rule,your deposits cannot be less than 1/6 of therefigured tax liability.

New or reinstated taxes. You mustmodify this safe harbor rule for any calendarquarter in which a class of tax includes anynew or reinstated tax. A new or reinstated taxis any tax that was not in effect at all timesduring the look-back quarter. In this situation,this safe harbor rule applies if the semi-monthly deposit for that class of tax for thecurrent quarter is not less than the greater ofthe following amounts.

1) One-sixth of the net tax liability reportedfor that class of tax for the look-backquarter.

2) The sum of the following amounts.

a) 95% of the net tax liability incurredfor new or reinstated taxes duringthe semimonthly period.

b) One-sixth of the net tax liability re-ported for all other taxes in thatclass for the look-back quarter.

New chemicals. You must modify thissafe harbor rule for any calendar quarter inwhich a new chemical is included under the30-day rule. A new chemical is any chemicalthat was not subject to tax at all times duringthe look-back quarter. The modification of thesemimonthly deposit as discussed under New

or reinstated taxes applies if a new chemicalis included in this class of tax.

Current liability. This safe harbor rule ap-plies to all filers. You meet the semimonthlydeposit requirement for a class of tax for thecurrent quarter if all the following conditionsare met.

• The deposit of that tax for each semi-monthly period in the quarter is not lessthan 95% of the net tax liability incurredduring the semimonthly period.

• Each deposit is timely made.

• Any underpayment for the quarter is paidby the due date of the return.

• For the semimonthly period for which theadditional deposit is required (Septemberrule), the additional deposit must be atleast 69.67% (63.34% non-EFTPS) of thenet tax liability for the semimonthly pe-riod.

In addition, if the due date of the return isextended because you report taxes with dif-ferent due dates, you must make a specialdeposit by the earlier due date. The specialdeposit must be at least 5% of your net taxliability or the amount of the underpaymentof the taxes due on that earlier date, which-ever is less.

ExceptionsYou do not have to make deposits of the fol-lowing taxes. You pay these taxes when youfile your Form 720 for the quarter.

• Sport fishing equipment.

• Electric outboard motors and sonar de-vices.

• Bows.

• Arrow components.

• Fuels used on inland waterways.

• Alcohol sold as fuel but not used as fuel.

• Taxes reportable on a one-time filing.(See the earlier discussion, Special one-time filing, under Filing Form 720.)

Credits and RefundsA credit may be claimed on Schedule C ofForm 720 or a refund may be claimed onForm 8849, Claim for Refund of ExciseTaxes, for the credits and refunds describedpreviously.

Generally, claims must be filed within 3years of the filing of the return reporting thetax to which the claim relates, or 2 years fromwhen the tax reported on the return was paid,whichever is later.

Conditions to allowance. No credit or re-fund may be allowed unless the person whopaid the tax to the government establishesany of the following.

• The tax was neither included in the priceof the article nor collected from the per-son who purchased the article.

• The person has repaid the tax to the ul-timate purchaser (or ultimate vendor, ifapplicable) of the article.

• The person has the written consent of theultimate purchaser (or ultimate vendor, if

applicable) to allowance of the credit orrefund.

Tax on WageringThere are two taxes imposed on wageringactivities. You must pay the occupational taxif you accept taxable wagers for yourself oranother person. See Form 11–C, later, formore information.

You must pay the tax on wagering if youare in the business of accepting wagers orrunning a wagering pool or lottery. You mayalso have to pay the tax on wagering if youare not properly registered on Form 11–C.See Form 730, later, for more information.

Exempt organizations. Organizations ex-empt from income tax under section 501 or521 of the Internal Revenue Code are notexempt from the tax on wagering or the oc-cupational tax. However, see Lottery, later, foran exception.

Confidentiality. No Treasury Departmentemployee may disclose any information thatyou supply in relation to the wagering taxes,unless necessary to administer or enforce theInternal Revenue laws.

DefinitionsThe following definitions apply to Form 11–Cand Form 730.

Principal. A principal is a person who is inthe business of accepting wagers for his orher own account. This is the person whomakes profit or risks loss depending on theoutcome of the event or contest for which thewager is accepted.

Employee-agent. This is the paid employeeof the principal who accepts wagers for theprincipal.

Wagers. Wagers include any wager:

• Made on sports events or contests witha person in the business of acceptingwagers,

• Placed in a wagering pool on a sportsevent or contest, if the pool is conductedfor profit, and

• Placed in a lottery conducted for profit.

Sports event. A sports event includes everytype of amateur, scholastic, or professionalsports competition, such as:

Contest. A contest is any competition in-volving speed, skill, endurance, popularity,politics, strength, or appearance, such as thefollowing.

• Elections.

• The outcome of nominating conventions.

• Dance marathons.

• Log-rolling contests.

Auto racing Baseball BasketballBilliards Bowling BoxingCards Checkers CricketCroquet Dog racing FootballGolf Gymnastics HockeyHorse racing Lacrosse RugbySoccer Squash TennisTrack Tug of war Wrestling

• Wood-chopping contests.

• Weightlifting contests.

• Beauty contests.

• Spelling bees.

Wagering pool. A wagering pool conductedfor profit includes any method or scheme forgiving prizes to one or more winning bettorsbased on the outcome of a sports event, acontest, or a combination or series of theseevents or contests if the wagering pool ismanaged and conducted for the purpose ofmaking a profit. A wagering pool or lotterymay be conducted for profit even if a directprofit does not occur. If you operate thewagering pool or lottery with the expectationof a profit in the form of increased sales, at-tendance, or other indirect benefits, you con-duct it for profit.

Lottery. This includes the numbers game,policy, punch boards, and similar types ofwagering. In general, a lottery conducted forprofit includes any method or scheme for thedistribution of prizes among persons whohave paid or promised to pay for a chance towin the prizes. The winning prizes are usuallydetermined by the drawing of numbers, sym-bols, or tickets from a wheel or other con-tainer or by the outcome of a given event.

It does not include either of the followingkinds of events.

1) Games in which the wagers are placed,winners are determined, and the prizesare distributed in the presence of every-one who placed a wager.

2) Drawings conducted by a tax-exemptorganization, if the net proceeds of thedrawing do not benefit a private share-holder or individual.

Card games, roulette games, dice games,bingo, keno, and gambling wheels usually fallwithin exception (1) above.

Form 11–CYou use Form 11–C to register with the IRSany wagering activity and to pay the occupa-tional tax on wagering. After you file this formand pay the tax, the IRS issues you a letteras proof of registration and payment.

Who must file. You must file Form 11–C ifyou are a principal or an employee-agent,defined earlier.

When to file. You must file your first Form11–C before you begin accepting wagers.After that, file a renewal return by July 1 foreach year that you accept wagers. You mayalso have to file supplemental returns whencertain changes occur. These changes arediscussed in the instructions to the form.

Information required. Follow the in-structions on the back of the form. All filersmust have an employer identification number(EIN). You cannot use your social securitynumber. If you do not have an EIN, completeForm SS–4, Application for Employer Iden-tification Number, and attach it to the Form11–C when you file. If you have applied for anumber but have not yet received it, write“applied for” in the block for the EIN on Form11–C.

If you are a principal, you must show thenumber of employee-agents that work for youand their names, addresses, and EINs. If youhire a new employee-agent after filing Form11–C, you must file a supplemental returnshowing this information within 10 days afteryou hire the employee-agent.

Employee-agents must show the name,address, and EIN of each of their principals.If you are hired by a new principal after havingfiled a Form 11–C, you must file a supple-mental return within 10 days after being hiredby the principal. If you do not provide therequired information about the principal, youwill be liable for the excise tax on wagers youaccept as if you were the principal.

Example. Ken operates a numbers gameand employs 10 people to receive wagersfrom the public on Ken's behalf. Ken alsoemploys a secretary and a bookkeeper. Kenand each of the 10 persons are liable for thetax. They must each file Form 11–C. Thesecretary and the bookkeeper are not liablefor the tax unless they also accept wagers forKen.

On Ken's Form 11–C, he lists all requiredinformation (name, address, and EIN) foreach of his ten agents as well as himself.He does not list his secretary or bookkeeper.

Each of the 10 agents lists on Form 11–Chis or her name, address, and EIN, as wellas Ken's.

Figuring the tax. The following rates of taxmust be paid annually for every year in whichtaxable wagers are accepted.

• $50 if all wagers accepted are authorizedunder the laws of the state in which ac-cepted.

• $500 for all other wagers.

The tax year begins on July 1. If you startaccepting wagers after July 31, the tax ratesare prorated. The prorated amounts areshown in the table in the Form 11–C in-structions.

Form 730Form 730 is used for figuring the tax onwagers. The wagering tax applies to thewagers (as defined earlier), regardless of theoutcome of the individual wagers.

The tax applies only to a wager that meetseither of the following conditions.

• It is accepted in the United States.

• It is placed by a person who is in theUnited States with a U.S. citizen or resi-dent, or in a wagering pool conducted bya U.S. citizen or resident.

Wagers made within the United States aretaxable regardless of the citizenship or placeof residence of the parties to the wager.

Lay-off wagers. Persons accepting morewagers than they are willing to carry may layoff a portion of the wagers with another per-son to avoid the risk of loss. If you accept awager taken initially by someone else (otherthan an agent or employee acting for you)include the wager in your gross receipts. Ifyou accept a wager and lay off all or part ofit with a person who is liable for the tax, youmay be entitled to a credit or refund, dis-cussed later.

Excluded wagers. Tax is not imposed onany of the following.

• Parimutuel wagering, including horseracing, dog racing, and jai alai when li-censed under state law.

• Coin-operated devices such as pinballmachines.

• Sweepstakes, wagering pools, or lotteriesthat are conducted by an agency of astate if the wager is placed with the stateagency or its authorized agents or em-ployees.

Figuring the tax. The amount of the wageris the amount risked by the bettor, includingany fee or charge incident to placing thewager. It is not the amount that the bettorstands to win.

The tax is 2% of the wager if it is not au-thorized under state law. If the wager is au-thorized, the rate is 0.25% of the wager.

When to file. File Form 730 for each monthby the last day of the following month. File areturn whether or not you have taxablewagers to report. If you have none to report,write “0” in the last box of the dollar amountcolumn. If you stop accepting wagers perma-nently, check the final return box on the form.

RECORDS

Keep your records on a daily basis toreflect each day's operations. Yourrecords should show all the following

information.

• The gross amount of all wagers ac-cepted.

• The gross amount of each class or typeof wager accepted on each event, con-test, or other wagering medium.

• The gross amount of any wagers laid offwith other persons and the name, ad-dress, and registration number of eachperson with whom you placed the layoffs.

If you have employees or agents who ac-cept wagers for you, keep records of theirnames, home addresses, business ad-dresses, periods of employment, and EINs.Also, you may be subject to income and em-ployment tax withholding for your employees.See Publication 15, Circular E, Employer'sTax Guide.

Credit or refund. You may be able to claima credit or refund for any overpayment of taxor for the amount of tax imposed on a wagerthat you laid off. Claim a credit on line 5 ofForm 730 or file a claim for refund on Form8849 using Schedule 6. For more information,see the instructions for Form 730 and Form8849.

Conditions to allowance. No claim fora credit or refund of the tax on wagering willbe allowed unless one of the following state-ments is attached to the form.

• The tax has not been collected from theperson who placed the wager.

• The tax has been repaid to that person.

• The written consent of that person tomake the claim has been obtained.

If the claim is for a laid-off wager acceptedby the claimant, a statement must be at-tached for the person who placed the laid-offwager and the person who placed the originalwager. See the Form 730 instructions for

other information you must attach to Form730 or Form 8849.

Penaltiesand InterestPenalties and interest may result from any ofthe following acts.

• Failing to collect and pay over tax as thecollecting agent (see Trust fund recoverypenalty).

• Failing to keep adequate records.

• Failing to file returns.

• Failing to pay taxes.

• Filing returns late.

• Filing false or fraudulent returns.

• Paying taxes late.

• Failing to make deposits.

• Depositing taxes late.

Trust fund recovery penalty. If you providecommunications services or air transporta-tion, you have to collect excise taxes (as dis-cussed earlier) from those persons who payyou for those services. You must pay thesetaxes to the U.S. Government.

If you willfully fail to collect and pay overthese taxes, or if you evade or defeat themin any way, the trust fund recovery penaltymay apply. Willfully means voluntarily, con-sciously, and intentionally. The trust fund re-covery penalty equals 100% of the taxes notcollected or not paid over to the U.S. Gov-ernment.

The trust fund recovery penalty may beimposed on any person responsible for col-lecting, accounting for, and paying over thesetaxes. If this person knows that these requiredactions are not taking place for whateverreason, the person is acting willfully. Payingother expenses of the business instead ofpaying the taxes is willful behavior.

A responsible person can be an officer oremployee of a corporation, a partner or em-ployee of a partnership, or any other personwho had responsibility for certain aspects ofthe business and financial affairs of the em-ployer (or business). This may include ac-countants, trustees in bankruptcy, membersof a board, banks, insurance companies, orsureties. The responsible person could evenbe another corporation—in other words, any-one who has the duty and the ability to direct,account for, or pay over the money. Havingsignature power on the business checkingaccount could be a significant factor in deter-mining responsibility.

Examination andAppeal ProceduresIf your excise tax return is examined and youdisagree with the findings, you can get infor-

mation about audit and appeal proceduresfrom Publication 556, Examination of Returns,Appeal Rights, and Claims for Refund. Anunagreed case involving an excise tax cov-ered in this publication differs from other taxcases in that you can only contest it afterpayment of the tax by filing suit for a refundin the United States District Court or theUnited States Court of Federal Claims.

Help WithUnresolved TaxProblemsIf you have attempted to deal with an IRSproblem unsuccessfully, you should contactyour Taxpayer Advocate.

The Taxpayer Advocate represents yourinterests and concerns within the IRS byprotecting your rights and resolving problemsthat have not been fixed through normalchannels. While Taxpayer Advocates cannotchange the tax law or make a technical taxdecision, they can clear up problems that re-sulted from previous contacts and ensure thatyour case is given a complete and impartialreview.

To contact your Taxpayer Advocate:

• Call the Taxpayer Advocate's toll-freenumber: 1–877–777–4778.

• Call the IRS toll-free number:1–800–829–1040.

• Call, write, or fax the Taxpayer Advocateoffice in your area.

• Call 1–800–829–4059 if you are aTTY/TDD user.

For more information, see Publication1546, The Taxpayer Advocate Service of theIRS.

Rulings ProgramThe IRS has a program for assisting taxpay-ers who have technical problems with taxlaws and regulations. The IRS will answerinquiries from individuals and organizationsabout the tax effect of their acts or trans-actions. The National Office of the IRS issuesrulings on those matters.

A ruling is a written statement to a tax-payer that interprets and applies tax laws tothe taxpayer's specific set of facts. There arealso determination letters issued by districtdirectors and information letters issued bydistrict directors or the National Office.

There is a fee for most types of determi-nation letters and rulings. For complete de-tails of the rulings program, see Publication1375, Procedures for Issuing Rulings, Deter-mination Letters, and Information Letters, etc.

Appendix AThis appendix provides information aboutATF forms you may have to use to reportcertain excise taxes not covered in this pub-lication.

ATF Form 5630.5:Alcohol, Tobacco;ATF Form 5630.7: FirearmsA number of excise taxes apply to alcoholicbeverages, tobacco products, and firearms.If you produce, sell, or import guns, tobacco,or alcoholic products, or if you manufactureequipment for their production, you may beliable for one or more excise taxes. Use Form5630.5 (Alcohol, Tobacco) or Form 5630.7(Firearms), Special Tax Registration and Re-turn, to register your place of business andpay an annual tax. The businesses coveredby Form 5630.5 include the following.

• Brewers and dealers of liquor, wine, orbeer.

• Distillers, importers, wholesale and retaildealers of distilled spirits.

• Manufacturers who use alcohol toproduce nonbeverage products.

• Importers and wholesalers of importedperfumes.

The businesses covered by Form 5630.7include manufacturers, importers, and dealersin firearms (National Firearms Act).

ATF Form 5300.26: FirearmsUse ATF Form 5300.26, Federal Firearmsand Ammunition Excise Tax Return, to de-termine your firearms excise tax liability. Mailall domestic firearms excise tax returns to thespecial purpose post office box (lockbox) asindicated on the return form. File returns forPuerto Rico and Virgin Islands with the Chief,Puerto Rico Operations, Alcohol, Tobacco,and Firearms.

Bureau of Alcohol, Tobacco, andFirearms (ATF). If you need formsor more information about the ATF

forms, write to or call:

National Revenue CenterSpecial Occupational Tax550 Main StreetCincinnati, OH 45202(513) 684–2979 or 1–800–937–8864

National Revenue CenterExcise Tax550 Main StreetCincinnati, OH 45250–3263(513) 684–3334 or 1–800–398–2282

Part I. Products that are mixtures containing ODCs

Imported Products Table

Mixtures containing ODCs, including but not limited to:—anti-static sprays—automotive products such as “carburetor cleaner,” “stop

leak,” “oil charge”—cleaning solvents—contact cleaners—degreasers—dusting sprays—electronic circuit board coolants

—electronic solvents—Ethylene oxide/CFC-12—fire extinguisher preparations and charges—flux removers for electronics—insect and wasp sprays—mixtures of ODCs—propellants—refrigerants

Part II. Products in which ODCs are used for purposes of refrigeration or air conditioning, creating anaerosol or foam, or manufacturing electronic components

Product NameHarmonized TariffSchedule Heading ODC ODC Weight

Rigid foam insulation defined in §52.4682-1(d)(3)

Foams made with ODCs, other than foamsdefined in §52.4682-1(d)(3)

Scrap flexible foam made with ODCs

Medical products containing ODCs——surgical staplers—cryogenic medical instruments—drug delivery systems—inhalants

Dehumidifiers, household

Chillers:charged with CFC-12charged with CFC-114charged with R-500

Refrigerator-freezers, household:not > 184 liters

> 184 liters but not > 269 liters


> 382 liters

Refrigerators, householdnot > 184 liters



> 382 liters

Freezers, household

Freezers, household

Refrigerating display counters not> 227 kg

8415.82.00.50

8415.82.00.65

8418.10.00.10

8418.10.00.20

8418.10.00.30

8418.10.00.40

8418.21.00.10

8418.21.00.20

8418.21.00.30

8418.21.00.90

8418.30

8418.40

8418.50

CFC-12

CFC-12CFC-114

CFC-12CFC-11

0.344

1600.1250.1920.

1.081

0.13

1.321

0.26

1.541

0.35

1.871

0.35

1.081

1.321

0.261

1.541

0.35

1.871

0.35

2.01

0.4

2.01

0.4

50.01

260.0CFC-12CFC-11

CFC-12CFC-11

CFC-12CFC-11

CFC-12CFC-11

CFC-12CFC-11

CFC-12CFC-11

0.13

CFC-12CFC-11

CFC-12CFC-11

CFC-12CFC-11

CFC-12CFC-11

CFC-12

Appendix BThis appendix provides the Imported Products Table. This is a listing of imported products containing or manufactured with ozone-depletingchemicals (ODCs). See Imported Taxable Products for more information on these tables.

Part II. (continued)


CFC-12Icemaking machines:

charged with CFC-12charged with R-502

Drinking water coolers:charged with CFC-12charged with R-500

Centrifugal chillers, hermetic:charged with CFC-12charged with CFC-114charged with R-500

Reciprocating chillers:charged with CFC-12

Mobile refrigeration systems:containerstruckstrailers

Refrigeration condensing units:not > 746W> 746W but not > 2.2KW> 2.2 KW but not > 7.5KW> 7.5KW but not > 22.3 KW>22.3KW

Fire extinguishers, charged w/ODCs

Electronic typewriters and word processors

Electronic calculators

Electronic calculators w/printing device

Electronic calculators

Account machines

Cash registers

Digital automatic data processing machinesw/cathode ray tube, not included insubheading 8471.20.00.90

Laptops, notebooks, and pocket computers

Digital processing unit w/entry valuenot > $100K

> $100K

Combined input/output units (terminal)

Keyboards

Display units

Printer units

Input or output units

Hard magnetic disk drive units not included insubheading 8471.93.10 for a disk of adiameter:

not > 9 cm (31⁄2 inches)

> 9 cm (31⁄2 inches) but not > 21 cm(81⁄4 inches)

Nonmagnetic storage unit w/entry value > $1,000

Magnet disk drive unit for a disk of a diameterover 21 cm (81⁄4 inches)

Power supplies

8418.69

8418.69

8418.69

8418.69

8418.99

8418.99.00.058418.99.00.108418.99.00.158418.99.00.208418.99.00.25

8424

8469

8470.10

8470.21

8470.29

8470.40

8470.50

8471.20

8471.20.00.90

8471.918471.91

8471.92

8471.92

8471.92

8471.92

8471.92

8471.93

8471.93

8471.93

8471.93.10

8471.99.30

CFC-12CFC-12

CFC-12

CFC-12

CFC-12

CFC-12CFC-12CFC-12

CFC-12CFC-12CFC-12CFC-12CFC-12

CFC-115

CFC-114

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

1.43.39

0.210.22

1600.1250.1920.

200.

15.11.20.

0.31.03.08.5

17.0

0.2049

0.0035

0.0057

0.0035

0.1913

0.1913

0.3663

0.03567

0.498027.6667

0.3600

0.0742

0.0386

0.1558

0.1370

0.2829

1.1671

2.7758

4.0067

0.0655



CFC-12

CFC-113

CFC-113CFC-113

CFC-113CFC-113CFC-113

CFC-113

CFC-113CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

Electronic office machines

Populated cards for digital processing unit insubheading 8471.91 with value:

not > $100K> $100 K

Automatic goods—vending machines withrefrigerating device

Microwave ovens with electronic controls, withcapacity of:

0.99 cu. ft. or less1.0 through 1.3 cu. ft.1.31 cu. ft. or greater

Microwave oven combination with electroniccontrols

Telephone sets w/entry value:not > $11.00> $11.00

Teleprinters & teletypewriters

Switching equipment not included in subheading8517.30.20

Private branch exchange switching equipment

Modems

Intercoms

Facsimile machines

Loudspeakers, microphones, headphones, &electric sound amplifier sets, not included insubheading 8518.30.10

Telephone handsets

Turntables, record players, cassette players, andother sound reproducing apparatus

Magnetic tape recorders & other sound recordingapparatus, not included in subheading8520.20

Telephone answering machines

Color video recording/reproducing apparatus

Videodisc players

Cordless handset telephones

Cellular communication equipment

TV cameras

Camcorders

Radio combinations

Radios

Motor vehicle radios with or w/o tape player

Radio combinations

Radios

Tuners w/o speaker

Television receivers

VCRs

Home satellite earth stations

Electronic assemblies for HTS headings 8525,8527, & 8528

8472

8473.308473.30

8476.11

8476.50

8516.50.40.60

8517.108517.10

8517.20

8517.30

8517.30.20

8517.40

8517.81

8517.82

8518

8518.30.10

8519

8520

8520.20

8521.10.00.20

8521.90

8525.20.50

8525.20.60

8525.30

8525.30

8527.11

8527.19

8527.21

8527.31

8527.32

8527.39.00.20

8528

8528.10.40

8528.10.80.55

8529.90

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

0.001

0.14084.82

0.45

0.03000.04410.0485

0.0595

0.02250.1

0.1

0.1267

0.0753

0.0225

0.0225

0.0225

0.0022

0.042

0.0022

0.0022

0.1

0.0586

0.0106

0.1

0.4446

1.423

0.0586

0.0022

0.0014

0.0021

0.0022

0.0014

0.0022

0.0386

0.0586

0.0106

0.0816



CFC-12

CFC-113

CFC-113

CFC-113

Indicator panels incorporating liquid crystaldevices or light emitting diodes

Printed circuits

Computerized numerical controls

Diodes, crystals, transistors and other similardiscrete semiconductor devices

Electronic integrated circuits andmicroassemblies

Signal generators

Avionics

Signal generators subassemblies

Insulated or refrigerated railway freight cars

Passenger automobiles:foams (interior)foams (exterior)with charged a/cwithout charged a/celectronics

Light trucks:foams (interior)foams (exterior)with charged a/cwithout charged a/celectronics

Heavy trucks and tractors, with GVW 33,001 lbsor more:foams (interior)foams (exterior)with charged a/cwithout charged a/celectronics

Motorcycles with seat foamed with ODCs

Bicycles with seat foamed with ODCs

Seats foamed with ODCs

Aircraft

Optical fibers

Electronic cameras

Photocopiers

Avionics

Electronic drafting machines

Complete patient monitoring systems

Complete patient monitoring systems;subassemblies thereof

Physical or chemical analysis instruments

Oscilloscopes

Foam chairs

Foam sofas

Foam mattresses

8531.20

8534

8537.10.00.30

8541

8542

8543.20

8543.90.40

8543.90.80

8606

8703

8704

8704

8711

8712

8714.95

8802

9001

9006

9009

9014.20

9017

9018.19.80

9018.19.80.60

9027

9030

9401

9401

9404.21

CFC-113

CFC-113

CFC-113

CFC-113

CFC-113

CFC-11

CFC-11CFC-11

CFC-12CFC-113

CFC-12

CFC-11CFC-11

CFC-12CFC-113

CFC-12

CFC-11CFC-11

CFC-12CFC-113

CFC-11

CFC-11

CFC-11

CFC-12

CFC-113

CFC-12

CFC-113

CFC-113

CFC-113

CFC-113

CFC-12CFC-113CFC-113

CFC-12CFC-113

CFC-11CFC-12CFC-113

CFC-11

CFC-11

CFC-11

0.0146

0.001

0.1306

0.0001

0.0002

0.6518

0.915

0.1265

100.1

0.80.72.00.20.5

0.60.12.00.20.4

0.60.13.02.00.4

0.04

0.04

0.04

0.25 lb./1000 lbsOperating Empty

Weight (OEW)30.0 lbs./1000 lbs. OEW

0.005 lb./ thousand feet

0.01

0.0426

0.915

0.12

0.943.41631.9320

0.00030.0271

0.490.59430.2613

0.30

0.75

1.60



CFC-113

CFC-113

CFC-113

Electronic games and electronic componentsthereof

Electronic items not otherwise listed inthe Table

not included in HTSchapters 84, 85, 90

9504

0.0004 pound/$1.00 ofentry value

included in HTSchapters 84, 85, 90

0.0004 pound/$1.00 ofentry value

Part III.

Product NameHarmonized TariffSchedule Heading

Products that are not Imported Taxable Products

Room air conditionersDishwashersClothes washersClothes dryersFloppy disk drive unitsTransformers and inductorsToastersUnrecorded mediaRecorded mediaCapacitorsResistorsSwitching apparatusCathode tubes

8415.10.00.608422.118450.118451.218471.9385048516.72852385248532853385368540

1 Denotes an ODC used in the manufacture of rigid foam insulation.

Model Certificate A

NOTIFICATION CERTIFICATE OF TAXABLE FUEL REGISTRANT

Name, address, and employer identification number of person receiving certificate

The undersigned taxable registrant (“Registrant”) hereby certifies under penalties of perjury that Registrant is registered by the InternalRevenue Service with registration number and that Registrant’s registration has not been revoked or suspended by theInternal Revenue Service.

Registrant understands that the fraudulent use of this certificate may subject Registrant and all parties making such fraudulent use ofthis certificate to a fine or imprisonment, or both, together with the costs of prosecution.

Signature and date signed

Printed or typed name of person signing

Title of person signing

Name of Registrant

Employer identification number

Address of Registrant

Appendix CThis appendix contains models of the certificates, reports, and statements discussed earlier under Fuel Taxes.

Model Certificate B

CERTIFICATE OF PERSON BUYING GASOLINE BLENDSTOCKS FOR USE OTHER THAN IN THE PRODUCTION OFFINISHED GASOLINE

Name, address, and employer identification number of seller




Name of Buyer


Address of Buyer

(To support tax-free sales under section 4081 of the Internal Revenue Code.)

The undersigned buyer (“Buyer”) hereby certifies the following under penalties of perjury:

The gasoline blendstocks to which this certificate relates will not be used to produce finished gasoline.

This certificate applies to the following (complete as applicable):

If this is a single purchase certificate, check here and enter:

1. Invoice or delivery ticket number

2. (number of gallons) of (type of gasoline blendstocks)

If this is a certificate covering all purchases under a specified account or order number, check here and enter:

1. Effective date

2. Expiration date

(period not to exceed 1 year after the effective date)

3. Type (or types) of gasoline blendstocks

4. Buyer account or order number

Buyer will not claim a credit or refund under section 6427(h) of the Internal Revenue Code for any gasoline blendstocks covered by thiscertificate.

Buyer will provide a new certificate to the seller if any information in this certificate changes.

If Buyer resells the gasoline blendstocks to which this certificate relates, Buyer will be liable for tax unless Buyer obtains a certificatefrom the purchaser stating that the gasoline blendstocks will not be used to produce finished gasoline and otherwise complies with theconditions of §48.4081-4(b)(3) of the Manufacturers and Retailers Excise Tax Regulations.

Buyer understands that if Buyer violates the terms of this certificate, the Internal Revenue Service may withdraw Buyer’s right toprovide a certificate.

Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been withdrawn. In addition, theInternal Revenue Service has not notified Buyer that the right to provide a certificate has been withdrawn from a purchaser to which Buyersells gasoline blendstocks tax free.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such fraudulent use of thiscertificate to a fine or imprisonment, or both, together with the costs of prosecution.

Model Certificate C

FIRST TAXPAYER’S REPORT

1.

2.

3.

4.

5.

6.

7.

First Taxpayer’s name, address, and employer identification number

Name, address, and employer identification number of the buyer of the taxable fuel subject to tax

Date and location of removal, entry, or sale

Volume and type of taxable fuel removed, entered, or sold

Check type of taxable event:Removal from refineryEntry into United StatesBulk transfer from terminal by unregistered position holderBulk transfer not received at an approved terminalSale within the bulk transfer/terminal systemRemoval at the terminal rackRemoval or sale by the blender

Amount of Federal excise tax paid on account of the removal, entry, or sale

Location of IRS service center where this report is filed

The undersigned taxpayer (the “Taxpayer”) has not received, and will not claim, a credit with respect to, or a refund of, the tax on thetaxable fuel to which this form relates.

Under penalties of perjury, the Taxpayer declares that Taxpayer has examined this statement, including any accompanying schedulesand statements, and, to the best of Taxpayer’s knowledge and belief, they are true, correct and complete.


Printed or typed name of person signing this report

Title

Model Certificate D

STATEMENT OF SUBSEQUENT SELLER

1.

2.

3.

4.

Name, address, and employer identification number of seller in subsequent sale

Name, address, and employer identification number of the buyer in subsequent sale

Date and location of subsequent sale

Volume and type of taxable fuel sold

The undersigned seller (the “Seller”) has received the copy of the first taxpayer’s report provided with this statement in connection withSeller’s purchase of the taxable fuel described in this statement.

Under penalties of perjury, Seller declares that Seller has examined this statement, including any accompanying schedules andstatements, and, to the best of Seller’s knowledge and belief, they are true, correct and complete.


Printed or typed name of person signing this report

Title

Model Certificate E

CERTIFICATE OF REGISTERED GASOHOL BLENDER


(To support sales of gasoline at the gasohol production tax rate under section 4081(c) of the Internal Revenue Code)

Name of buyer (“Buyer”) certifies the following under penalties of perjury:

Buyer is registered as a gasohol blender with registration number . Buyer’s registration has not been suspended orrevoked by the Internal Revenue Service.

The gasoline bought under this certificate will be used by Buyer to produce gasohol (as defined in §48.4081-(6)(b) of the Manufacturersand Retailers Excise Tax Regulations) within 24 hours after buying the gasoline.

Type of gasohol Buyer will produce (check one only):

10% gasohol

7.7% gasohol

5.7% gasohol

If the gasohol the Buyer will produce will contain ethanol, check here:



1. Account number

2. Number of gallons


1. Effective date

2. Expiration date



Buyer will not claim a credit or refund under section 6427(f) of the Internal Revenue Code for any gasoline covered by this certificate.

Buyer agrees to provide seller with a new certificate if any information in this certificate changes.

Buyer understands that Buyer’s registration may be revoked if the gasoline covered by this certificate is resold or is used other than inBuyer’s production of the type of gasohol identified above.

Buyer will reduce any alcohol mixture credit under section 40(b) by an amount equal to the benefit of the gasohol production tax rateunder section 4081(c) for the gasohol to which this certificate relates.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making any fraudulent use of thiscertificate to a fine or imprisonment, or both, together with the costs of prosecution.




Address of Buyer


Model Certificate F

CERTIFICATE OF PERSON BUYING COMPRESSED NATURAL GAS (CNG) FOR A NONTAXABLE USE


(To support tax-free sales of CNG under section 4041 of the Internal Revenue Code.)




Address of Buyer


(Name of buyer)(“Buyer”) certifies the following under penalties of perjury:

The CNG to which this certificate relates will be used in a nontaxable use.




2. (number of MCFs)


1. Effective date

2. Expiration date



Buyer will not claim a credit or refund under section 6427 of the Internal Revenue Code for any CNG to which this certificate relates.



Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been withdrawn. In addition, theInternal Revenue Service has not notified Buyer that the right to provide a certificate has been withdrawn from a purchaser to which Buyersells CNG tax free.


Model Certificate G

CERTIFICATE OF PERSON BUYING AVIATION-GRADE KEROSENE FOR USE AS A FUEL IN AN AIRCRAFT


(To support tax-free removals and entries of aviation-grade kerosene under section 4081 of the Internal Revenue Code.)




Address of Buyer


(Name of buyer)(“Buyer”) certifies the following under penalties of perjury:

The aviation-grade kerosene to which this certificate relates will be used as fuel in an aircraft.

Buyer is (check one):

Registered under section 4101 of the Internal Revenue Code with respect to the tax imposed by section 4091 with a

registration number of


1. Effective date

2. Expiration date





Buyer has not been notified by the Internal Revenue Service that its right to provide a certificate has been withdrawn.


Buying the kerosene for its use in a nontaxable use (as defined in section 4092(a)).

Buying the kerosene for its use (other than a nontaxable use) in commercial aviation (as defined in section 4092(b)).

Buying the kerosene for its use (other than a nontaxable use) in noncommercial aviation (as defined in section

4041(c)(2)).

Buying the kerosene for resale.



2. (number of gallons)


Model Certificate H

FIRST PRODUCER’S REPORT

First Producer’s name, address, and employer identification number




Under penalties of perjury, First Producer declares that First Producer has examined this statement, including any accompanyingschedules and statements, and, to the best of First Producer’s knowledge and belief, it is true, correct and complete.

Buyer’s name, address, and employer identification number

Date and location of taxable sale

Volume and type of aviation fuel sold

Amount of federal excise tax paid on account of the sale

Model Certificate I

STATEMENT OF SUBSEQUENT SELLER (AVIATION FUEL)

Name, address, and employer identification number of seller in subsequent sale




Under penalties of perjury, Seller declares that Seller has examined this statement, including any accompanying schedules andstatements, and, to the best of Seller’s knowledge and belief, it is true, correct and complete.

Name, address, and employer identification number of buyer in subsequent sale

Date and location of subsequent sale

Volume and type of aviation fuel sold

The undersigned seller (the Seller) has received the copy of the first producer’s report provided with this statement in connection withSeller’s purchase of the aviation fuel described in this statement.

How To Get MoreInformationYou can order free publications and forms,ask tax questions, and get more informationfrom the IRS in several ways. By selecting themethod that is best for you, you will havequick and easy access to tax help.

Free tax services. To find out what servicesare available, get Publication 910, Guide toFree Tax Services. It contains a list of free taxpublications and an index of tax topics. It alsodescribes other free tax information services,including tax education and assistance pro-grams and a list of TeleTax topics.

Personal computer. With your per-sonal computer and modem, you canaccess the IRS on the Internet at

www.irs.gov . While visiting our web site, youcan select:

• Frequently Asked Tax Questions (locatedunder Taxpayer Help & Ed) to find an-swers to questions you may have.

• Forms & Pubs to download forms andpublications or search for forms andpublications by topic or keyword.

• Fill-in Forms (located under Forms &Pubs) to enter information while the formis displayed and then print the completedform.

• Tax Info For You to view Internal Reve-nue Bulletins published in the last fewyears.

• Tax Regs in English to search regulationsand the Internal Revenue Code (underUnited States Code (USC)).

• Digital Dispatch and IRS Local News Net(both located under Tax Info For Busi-ness) to receive our electronic newslet-ters on hot tax issues and news.

• Small Business Corner (located underTax Info For Business) to get informationon starting and operating a small busi-ness.

You can also reach us with your computerusing File Transfer Protocol at ftp.irs.gov.

TaxFax Service. Using the phoneattached to your fax machine, you canreceive forms and instructions by

calling 703–368–9694. Follow the directionsfrom the prompts. When you order forms,enter the catalog number for the form youneed. The items you request will be faxed toyou.

Phone. Many services are availableby phone.

• Ordering forms, instructions, and publi-cations. Call 1–800–829–3676 to ordercurrent and prior year forms, instructions,and publications.

• Asking tax questions. Call the IRS withyour tax questions at 1–800–829–1040.

• TTY/TDD equipment. If you have accessto TTY/TDD equipment, call 1–800–829–4059 to ask tax questions or to orderforms and publications.

• TeleTax topics. Call 1–800–829–4477 tolisten to pre-recorded messages coveringvarious tax topics.

Evaluating the quality of our telephoneservices. To ensure that IRS representativesgive accurate, courteous, and professionalanswers, we evaluate the quality of our tele-phone services in several ways.

• A second IRS representative sometimesmonitors live telephone calls. That persononly evaluates the IRS assistor and doesnot keep a record of any taxpayer's nameor tax identification number.

• We sometimes record telephone calls toevaluate IRS assistors objectively. Wehold these recordings no longer than oneweek and use them only to measure thequality of assistance.

• We value our customers' opinions.Throughout this year, we will be survey-ing our customers for their opinions onour service.

Walk-in. You can walk in to manypost offices, libraries, and IRS officesto pick up certain forms, instructions,

and publications. Also, some libraries and IRSoffices have:

• An extensive collection of products avail-able to print from a CD-ROM or photo-copy from reproducible proofs.

• The Internal Revenue Code, regulations,Internal Revenue Bulletins, and Cumula-tive Bulletins available for research pur-poses.

Mail. You can send your order forforms, instructions, and publicationsto the Distribution Center nearest to

you and receive a response within 10 work-days after your request is received. Find theaddress that applies to your part of thecountry.

• Western part of U.S.:Western Area Distribution CenterRancho Cordova, CA 95743–0001

• Central part of U.S.:Central Area Distribution CenterP.O. Box 8903Bloomington, IL 61702–8903

• Eastern part of U.S. and foreign ad-dresses:Eastern Area Distribution CenterP.O. Box 85074Richmond, VA 23261–5074

CD-ROM. You can order IRS Publi-cation 1796, Federal Tax Products onCD-ROM, and obtain:

• Current tax forms, instructions, and pub-lications.

• Prior-year tax forms, instructions, andpublications.

• Popular tax forms which may be filled inelectronically, printed out for submission,and saved for recordkeeping.

• Internal Revenue Bulletins.

The CD-ROM can be purchased fromNational Technical Information Service (NTIS)by calling 1–877–233–6767 or on the Internetat www.irs.gov/cdorders. The first releaseis available in mid-December and the finalrelease is available in late January.

IRS Publication 3207, Small BusinessResource Guide, is an interactive CD-ROMthat contains information important to smallbusinesses. It is available in mid-February.You can get one free copy by calling 1–800–829–3676.

Index

A Affiliated corporations .................. 7

Air transportation taxes: 225-mile-zone rule ................. 5 Alaska ..................................... 6 Baggage ................................. 6 Bonus tickets .......................... 6

Credit or refund ...................... 7 Exemptions ............................. 6 Export ..................................... 6 Fixed-wing aircraft .................. 6 Hawaii ..................................... 6 Helicopters ............................. 6

International air travel facilities 6 Military personnel ................... 6

Package holiday tours ............ 6Persons by air ........................ 5

Persons liable ......................... 6Property by air ........................ 6

Tax rates ............................ 5, 6 Taxable transportation ........... 5 Travel agency ......................... 6 Uninterrupted international ..... 6

Aircraft: Affiliated corporations ............. 7 Fixed-wing .............................. 6 Helicopters ............................. 6 Museums .............................. 15 Small planes ........................... 7

Alaska:Air transportation taxes .......... 6Tax on diesel fuel or

kerosene ......................... 13 Alcoholic beverages .................. 29

Alternative method deposits ...... 26American Red Cross ................... 5

Answering service ....................... 4 Appeal procedures .................... 29 Arrow components .................... 19

Assistance (See More information) Aviation fuel ............................... 14

B Back-up tax ............................... 13 Bonus tickets ............................... 6 Bows .......................................... 19

Bureau of Alcohol, Tobacco, andFirearms ............................... 29 Buses:

Diesel fuel ............................ 14 Kerosene .............................. 14 Tire tax ................................. 20

C Chemicals, ozone-depleting ........ 2 Coal:

Blending ............................... 20 Exemptions ........................... 20 Producer ............................... 19 Production ............................ 19 Selling price .......................... 19 Tax rates .............................. 19

Coin-operated telephones ........... 4Commercial waterway transporta-

tion ........................................ 16 Communications taxes:

Coin-operated telephones ...... 4Credit or refund ...................... 5

Deposits ............................... 26 Exempt services ..................... 4

Figuring the tax ...................... 4Local telephone service ......... 4Prepaid telephone cards ........ 4Private communication service 4

Tax rates ................................ 4 Teletypewriter exchangeservice ............................... 4

Toll telephone service ............ 4 WATS service ........................ 4

Compressed natural gas ........... 16Credit or refund:

Air transportation taxes .......... 7

Communications taxes ........... 5 Environmental taxes ............... 3

Gas guzzler tax .................... 20 Gasoline tax ......................... 10 General rules ........................ 27 Luxury tax ............................. 24 Manufacturers taxes ............. 18

Resale of tax-paidsemitrailers ...................... 22 Retail tax .............................. 23 Tire tax ................................. 20 Vaccines ............................... 21 Wagering taxes .................... 28

D Deposits:

Alternative method ............... 26 Exceptions ............................ 27

Federal tax deposit coupons 26 Fourteen-day rule ................. 26

Net tax liability ...................... 26 Nine-day rule ........................ 26 Ozone-depleting chemicals .. 26 Requirements ....................... 26

Safe harbor rules ................. 26 Semimonthly period ............. 26

Thirty-day rule (ODCs) ......... 26When to make ...................... 26 Diesel fuel:

Buses ................................... 14 Definitions ............................. 11 Farming ................................ 13

Dyed diesel fuel ......................... 12 Dyed kerosene .......................... 12

EElectric outboard motors ........... 19Employer identification number . 25

Environmental taxes:Credit or refund ...................... 3

Exceptions .............................. 3 Ozone-depleting chemicals .... 2

United States (defined) .......... 2 Examination procedures ............ 29

Exempt articles, retail tax .......... 23Exempt communication ser-

vices: American Red Cross .............. 5

Answering service .................. 4 Coin-operated telephones ...... 4 Common carriers .................... 5 Installation charges ................ 4 International organizations ..... 5 Military personnel ................... 5

Mobile radio telephone service 4 News services ........................ 4

Nonprofit educational organiza-tions ................................... 5 Nonprofit hospitals ................. 5

Private communication service 4 Radio broadcasts ................... 4 Security systems .................... 4

Exempt sales, heavy trucks ...... 23 Exemptions:Air transportation taxes .......... 6

Bonus tickets .......................... 6 Coal ...................................... 20 Communications taxes ........... 4

Federal government ..... 2, 5, 24Fixed-wing air ambulance ...... 6

For export ............................. 18 Further manufacturing .......... 18 Helicopters ............................. 6 Indian handicrafts ................. 18

Indian tribal governments ....... 5 Luxury tax ............................. 24 Military personnel ................... 6

Nonprofit educational or-ganizations .............. 2, 5, 18

State and local gov-ernments ........... 2, 5, 18, 24 Tires ..................................... 20 Vaccines ............................... 21

Vessel supplies .................... 18

F Farming ..................................... 13 Federal government ................ 2, 5

Federal tax deposit coupons ..... 26 Firearms .................................... 29

Fixed-wing air ambulance ......... 15Floor stocks tax:

Deposits ............................... 26 Ozone-depleting chemicals .... 4

Form 720: Attachments ......................... 25 Due dates ............................. 25 Final return ........................... 25

Paying the tax ...................... 26 Schedule A ........................... 25 Schedule C ........................... 25

Special one-time filing .......... 25 Form:

11–C ..................................... 28 637 ......................................... 2 720 ................................. 21, 25 730 ....................................... 28 1363 ....................................... 6 2290 ....................................... 2 5300.26 ................................ 29 5630.5 .................................. 29 5630.7 .................................. 29

6197 ......................... 20, 21, 25 6478 ..................................... 17 6627 ................................. 2, 25 8109 ..................................... 26 SS-4 ..................................... 25

Fourteen-day deposit rule ......... 26Free tax services ....................... 43

Fuels: Aviation ................................. 14

Compressed natural gas ...... 16 Diesel ................................... 11 Gasohol ................................ 10 Gasoline ................................. 7 Kerosene .............................. 11

Special motor fuel ................ 15Used on inland waterways ... 16

G Gambling ................................... 24

Gas guzzler tax: Automobiles .......................... 20

Credit or refund .................... 20 Limousines ........................... 20 Manufacturers tax ................ 20

Vehicles not subject to tax ... 20 Gasohol ..................................... 10 Gasoline ...................................... 7 Gasoline blendstocks .................. 9

HHawaii, air transportation taxes ... 6

Heavy trucks:First retail sale ...................... 22

Further manufacture ............. 23 Glider kits ............................. 23 Installment sales .................. 23

Parts or accessories ............ 21Presumptive retail sales price 22Readily attachable compo-

nents ............................... 21 Related persons ................... 22 Resales ................................ 22 Separate purchases ............. 21 Tax base .............................. 22 Tax rate ................................ 21

Helicopters ............................. 6, 15Help (See More information) Highway use tax .......................... 2

Highway vehicle(Diesel-powered) .................. 11

IImported Products Table (ODCs) 3

Imported taxable products(ODCs) ................................... 3

Interest and penalties ................ 29International air travel facilities .... 6

K Kerosene:

Buses ................................... 14 Definitions ............................. 11 Farming ................................ 13

LLiquified petroleum gas ............. 16Local telephone service .............. 4

Luxury tax:Credit or refund .................... 24

Exemptions ........................... 24 Imported vehicles ................. 24

Parts and accessories .......... 24 Passenger vehicles .............. 24 Resale .................................. 24 Tax rate ................................ 24

M Manufacturers taxes:

Arrow components ............... 19 Bows ..................................... 19 Coal ...................................... 19

Credit or refund .................... 18 Exemptions ........................... 18

Gas guzzler tax .................... 20 Installment payments ........... 18 Lease .................................... 17 Lease payments ................... 18 Partial payments .................. 18 Person liable ........................ 17 Registration .......................... 18 Related person ..................... 19

Requirements for exemptsales ................................ 18 Sale ...................................... 17

Sport fishing equipment ....... 19Tax attaches to article .......... 18

Tax liability ........................... 18 Tires ..................................... 20 Vaccines ............................... 21

Mobile radio telephone service ... 4 More information ....................... 43

N News services ............................. 4

Nine-day deposit rule ................ 26Nonprofit educational organiza-

tions .................................... 2, 5

OObligations not in registered

form ...................................... 25 Ozone-depleting chemicals:

Deposits ............................... 26Floor stocks tax ...................... 4Imported Products Table ........ 3Imported taxable products ..... 3

Taxable ................................... 2

P Penalties:Dyed diesel fuel ................... 13

Dyed kerosene ..................... 13 Other .................................... 29

Policies issued by foreign per-sons: IRC 6114 treaty-based posi-

tions ................................. 25 Tax rate ................................ 25

Prepaid telephone cards ............. 4Publications (See More information)

R Radio broadcasts ........................ 4

Refund of second tax .................. 9 Registration-required obligations 25 Registration:

Diesel fuel .............................. 7 Form 637 ................................ 2 Gasoline ................................. 7 Kerosene ................................ 7

Related persons: Heavy trucks ........................ 22

Sport fishing equipment ....... 19Restoration of vehicles .............. 23

Retail tax:Credit or refund .................... 23

Heavy trucks ........................ 21 Rulings Program ........................ 29 Rural airports ............................... 5

S Sales price:

Bonus goods ........................ 18Cost of transportation ........... 17

Discounts .............................. 18

Local advertising charges .... 18 Manufacturers tax ................ 17 Rebates ................................ 18 Trucks ................................... 22 Warranty charges ................. 18

Security systems ......................... 4Ship passenger tax ................... 23

Sonar devices ............................ 19Special motor fuel ..................... 15Sport fishing equipment:

List of equipment .................. 19 Manufacturers tax ................ 19 Resales ................................ 19

State and local governments .. 2, 5

TTax help (See More information) Tax problems, unresolved ......... 29

Tax rate:Air transportation of persons .. 5Air transportation of property . 6

Arrow components ............... 19 Bows ..................................... 19 Coal ...................................... 19

Communications tax ............... 4Electric outboard motor ........ 19International air travel facilities 6

Luxury tax ............................. 24Obligations not in registered

form ................................. 25Policies issued by foreign per-

sons ................................. 25Ship passenger tax .............. 23

Sonar devices ...................... 19Sport fishing equipment ....... 19

Trucks ................................... 21 Taxpayer Advocate ................... 29 Telephone tax .............................. 4

Teletypewriter exchange service . 4Thirty-day deposit rule (ODCs) . 26

Tires:Credit on heavy truck tax ..... 23Credit or refund of tax .......... 20

Exemptions ........................... 20 Manufacturers taxes ............. 20 Weight determination ........... 20

Toll telephone services ............... 4 Train (Diesel-powered) .............. 11 Travel agency .............................. 6 TTY/TDD information ................ 43

UUninterrupted international air

transportation ......................... 6

V Vaccines:Credit or refund .................... 21

Exemptions ........................... 21 Manufacturers tax ................ 21

Vehicles: Gas guzzler .......................... 20 Imported ............................... 20 Law enforcement .................. 20

Passenger (luxury tax) ......... 24

W Wagering taxes:Credit or refund .................... 28

Definitions ............................. 27 Waterways ................................. 16 WATS service .............................. 4

�

Tax Publications for Business Taxpayers

General Guides

Commonly Used Tax Forms

Spanish Language Publications

Your Rights as a TaxpayerYour Federal Income Tax (ForIndividuals)Farmer’s Tax GuideTax Guide for Small BusinessTax Calendars for 2000Highlights of 1999 Tax Changes

Guide to Free Tax Services

Circular E, Employer’s Tax GuideEmployer’s Supplemental Tax GuideCircular A, Agricultural Employer’sTax GuideFederal Tax Guide For Employers inthe U.S. Virgin Islands, Guam,American Samoa, and theCommonwealth of the NorthernMariana Islands (Circular SS)

Household Employer’s Tax Guide

Circular PR Guía ContributivaFederal Para PatronosPuertorriqueños

Travel, Entertainment, Gift, and CarExpensesTax Withholding and Estimated TaxExcise Taxes for 2000Withholding of Tax on NonresidentAliens and Foreign CorporationsSocial Security and OtherInformation for Members of theClergy and Religious WorkersResidential Rental PropertySelf-Employment TaxDepreciating Property Placed inService Before 1987Business ExpensesNet Operating LossesInstallment SalesAccounting Periods and Methods

CorporationsSales and Other Dispositions ofAssetsBasis of AssetsExamination of Returns, AppealRights, and Claims for RefundRetirement Plans for Small Business(SEP, SIMPLE, and Keogh Plans)Determining the Value of DonatedPropertyStarting a Business and KeepingRecords

Understanding the Collection Process

Information on the United States-Canada Income Tax Treaty

Bankruptcy Tax GuideDirect SellersPassive Activity and At-Risk RulesHow To Depreciate Property

Reporting Cash Payments of Over$10,000The Taxpayer Advocate Service ofthe IRS

Derechos del ContribuyenteCómo Preparar la Declaración deImpuesto Federal

English-Spanish Glossary of Wordsand Phrases Used in PublicationsIssued by the Internal RevenueService

Tax on Unrelated Business Incomeof Exempt Organizations

Wage and Tax Statement

Itemized Deductions & Interest andOrdinary Dividends*

Profit or Loss From Business*Net Profit From Business*

Capital Gains and Losses*

Supplemental Income and Loss*Profit or Loss From Farming*

Credit for the Elderly or the Disabled*

Estimated Tax for Individuals*Self-Employment Tax*

Amended U.S. Individual Income Tax Return*

Capital Gains and LossesPartner’s Share of Income,Credits, Deductions, etc.

U.S. Corporation Income Tax Return

U.S. Income Tax Return for an S Corporation

Employee Business Expenses*Unreimbursed Employee BusinessExpenses*

Power of Attorney and Declaration ofRepresentative*

Child and Dependent Care Expenses*

General Business Credit

Application for Automatic Extension of Time ToFile U.S. Individual Income Tax Return*

Moving Expenses*

Additional Taxes Attributable to IRAs, OtherQualified Retirement Plans, Annuities, ModifiedEndowment Contracts, and MSAs*Installment Sale Income*Noncash Charitable Contributions*

Change of Address*Expenses for Business Use of Your Home*

Tax Highlights for CommercialFishermen

910

595553509334225

171

Nondeductible IRAs*Passive Activity Loss Limitations*

1515-A

51

80

179

926

378

463

505510515

517

527533534

535536537

541538

542Partnerships

544

551556

560

561

583

594

597

598

901

911925946947

908

1544

1546

1SP

850

579SP

Comprendiendo el Proceso de Cobro594SP

10134

Sch A & B

Sch CSch C-EZSch D

Sch ESch FSch H Household Employment Taxes*

Sch RSch SE

1040-ES1040X

Sch DSch K-1

1120

1120S

1065 U.S. Partnership Return of Income

21062106-EZ

24412848

3800

4868

3903

5329

62528283

8582860688228829

Specialized Publications

Fuel Tax Credits and Refunds

Employee’s Withholding Allowance Certificate*W-4Employer’s Annual Federal Unemployment(FUTA) Tax Return*

940

940EZ

U.S. Individual Income Tax Return*1040

Employer’s Annual Federal Unemployment(FUTA) Tax Return*

Business Use of Your Home(Including Use by Day-CareProviders)

587

U.S. Tax Treaties

Practice Before the IRS and Powerof AttorneyTax Incentives for EmpowermentZones and Other DistressedCommunities

Employer’s Guides

Certification for Reduced Tax Ratesin Tax Treaty Countries

686

954

Capital Gains and Losses and Built-In GainsShareholder’s Share of Income, Credits,Deductions, etc.

Sch DSch K-1

Underpayment of Estimated Tax byIndividuals, Estates, and Trusts*

2210

Report of Cash Payments Over $10,000Received in a Trade or Business*

8300

Depreciation and Amortization*4562Sales of Business Property*4797

Informe de Pagos en Efectivo enExceso de $10,000 (Recibidos enuna Ocupación o Negocio)

1544SP

U.S. Corporation Short-FormIncome Tax Return

1120-A

See How To Get More Information for a variety of ways to get publications,including by computer, phone, and mail.

See How To Get More Information for a variety of ways to get forms, including by computer, fax,phone, and mail. Items with an asterisk are available by fax. For these orders only, use the catalognumbers when ordering.

Form Number and TitleCatalogNumber

W-21022011234

10983

170011132011330

113341437411338

113441134612187

113581134011360

Employer’s Quarterly Federal Tax Return941

11359Sch J Farm Income Averaging* 25513

11510

CatalogNumber

20604

11744

1186211980

1239212490129061308613141

13329

1360162299

639661208113232

63704

62133113901139311394

1145011456

11700

1152011516

Form Number and Title

Continuation Sheet for Schedule DSch D-1 10424

publication 510 (rev. december 1999)

Documents