Kerosene Tax; Aviation Fuel Tax; Tax on Heavy Trucks and Trailers

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 48, 145, and 602

[T.D. 8774]

RIN 1545-AW15

Kerosene Tax; Aviation Fuel Tax; Tax on Heavy Trucks and Trailers

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Temporary regulations.

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SUMMARY: This document contains temporary regulations relating to the

kerosene and aviation fuel excise taxes and the tax on the first retail

sale of certain tractors and truck, trailer, and semitrailer chassis

and bodies (heavy vehicles). The regulations provide rules for the

kerosene tax, the refund available to certain aviation producers, and

the tax on heavy vehicles. The regulations relating to kerosene affect

the tax liability of certain industrial users, refiners, terminal

operators, throughputters, and persons that sell, buy, or use kerosene.

The regulations relating to aviation fuel affect certain producers,

retailers, and users of aviation fuel. The regulations relating to the

tax on heavy vehicles affect vehicle manufacturers and dealers. The

text of these regulations also serves as the text of the proposed

regulations set forth in the notice of proposed rulemaking on this

subject in the Proposed Rules section of this issue of the Federal

Register.

DATES: These regulations are effective July 1, 1998. For dates of

applicability, see Secs. 48.4082-6T, 48.4082-7T(b), 48.4082-8T(f),

48.4082-9T(b), 48.4091-3T(f), 48.4101-3T(e), 48.6427-10T(c), 48.6427-

11T(g), and 145.4052-1(a)(2)(ii).

FOR FURTHER INFORMATION CONTACT: Frank Boland (202) 622-3130 (not a

toll-free call).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

These temporary regulations are being issued without prior notice

and public procedure pursuant to the Administrative Procedure Act (5

U.S.C. 553). For this reason, the collection of information contained

in these regulations has been reviewed and, pending receipt and

evaluation of public comments, approved by the Office of Management and

Budget under control number 1545-1608. Responses to this collection of

information are required to obtain a tax benefit.

An agency may not conduct or sponsor, and a person is not required

to respond to, a collection of information unless the collection of

information displays a valid OMB control number.

For further information concerning this collection of information,

and where to submit comments on the collection of information and the

accuracy of the estimated burden, and suggestions for reducing this

burden, please refer to the preamble to the notice of proposed

rulemaking in the Proposed Rules section of this issue of the Federal

Register.

[[Page 35800]]

Books or records relating to a collection of information must be

retained as long as their contents may become material in the

administration of any internal revenue law. Generally, tax returns and

tax return information are confidential, as required by 26 U.S.C. 6103.

Background

This document contains amendments to excise tax regulations (26 CFR

parts 48 and 145) that implement certain changes made by the Taxpayer

Relief Act of 1997 (the 1997 Act) relating to taxes on kerosene,

aviation fuel, and heavy vehicles.

Kerosene; the 1997 Act

Section 4081 imposes a tax on certain removals, entries, and sales

of taxable fuel. Before July 1, 1998, taxable fuel means gasoline and

diesel fuel. As of that date, however, the definition of taxable fuel

is expanded by the 1997 Act to include kerosene. Thus, after June 30,

1998, tax is imposed on the removal of kerosene from a terminal at the

terminal rack.

In addition, the 1997 Act extends the rules for the exemption of

dyed diesel fuel to dyed kerosene. Thus, tax is not imposed on kerosene

that (1) the IRS determines is destined for a nontaxable use (such as

for heating), (2) is indelibly dyed in accordance with IRS regulations,

and (3) meets any marking requirements that may be prescribed in

regulations.

Also, the 1997 Act provides that undyed kerosene that is destined

for a nontaxable use may be removed, entered, or sold tax free in three

situations. First, in the case of aviation-grade kerosene, dyeing is

not required if the kerosene is received by a person that is registered

by the IRS for purposes of the aviation fuel tax imposed by section

4091. Second, dyeing is not required for feedstock kerosene that is

received from a pipeline or vessel by a registered kerosene feedstock

user. Kerosene used as a feedstock by other persons is exempt from the

dyeing requirement to the extent provided by regulations. Finally, to

the extent prescribed by regulations, dyeing is not required if

kerosene is received by a registered wholesale distributor that sells

kerosene exclusively to ultimate vendors that sell kerosene from a pump

that is not suitable for use in fueling any diesel-powered highway

vehicle or train (a blocked pump).

The 1997 Act adds section 4101(e) to provide that a terminal for

kerosene or diesel fuel cannot be an approved terminal unless the

operator of the terminal offers dyed diesel fuel and dyed kerosene for

removal for nontaxable use. This provision is not applicable until July

1, 2000.

The 1997 Act generally applies to kerosene the credit and refund

rules that apply to diesel fuel. Thus, a credit or refund is allowable

to a registered ultimate vendor that sells taxed, undyed kerosene for

use on a farm for farming purposes or for the exclusive use of a state

or local government. In addition, a credit or refund is allowable to a

registered ultimate vendor that sells taxed, undyed kerosene from a

blocked pump or, to the extent provided by the Secretary of the

Treasury, for blending with heating oil to be used during periods of

extreme or unseasonable cold.

Kerosene; Explanation of Provisions

Because kerosene is classified as a taxable fuel as of July 1,

1998, the rules (including definitions) in the existing regulations

that apply to taxable fuel generally apply to kerosene.

The temporary regulations define kerosene as the kerosene described

in ASTM Specification D 3699 (No. 1-K and No. 2-K) and ASTM

Specification D 1655 (kerosene-type jet fuel).

Under the temporary regulations, tax is not imposed on the removal,

entry, or sale of kerosene that is dyed with dye of the same strength

and composition that is now required for diesel fuel. Also, every

retail pump where dyed kerosene is sold must display a prescribed

notice similar to the one now required on dyed diesel fuel pumps.

Under the temporary regulations, tax generally is not imposed on

aviation-grade kerosene if the person that receives the kerosene in a

transaction otherwise subject to tax (such as a person that buys

kerosene at a terminal rack) is registered with respect to the section

4091 tax and, for sales after September 30, 1998, certifies that the

kerosene will be used as a fuel in an aircraft. These buyers include

registered aviation fuel producers (that is, persons with IRS

registration numbers with an ``H'' suffix) and registered commercial

airlines.

Transitional rules provide that tax generally is not imposed on

aviation-grade kerosene that is destined for use as aviation fuel if an

unregistered person (such as a fixed-base operator) receives the

kerosene at a terminal rack and certifies (for sales after September

30, 1998) that the kerosene will be used as a fuel in an aircraft. The

Treasury Department is considering whether this provision should be

made a part of the final regulations, or whether persons that are

presently unregistered should be required to register in order to

receive aviation-grade kerosene tax free and requests comments on this

issue. Comments may be submitted in the manner described under the

ADDRESSES caption in the notice of proposed rulemaking on these

subjects in the Proposed Rules section of this issue of the Federal

Register.

The temporary regulations describe the conditions under which a

registered ultimate vendor may be eligible for a credit or refund with

respect to taxed kerosene that it sells from a blocked pump. A blocked

pump is defined as a fuel pump that is at a fixed location and that

cannot be used to fuel any diesel-powered highway vehicle or train.

Also, blocked pumps must display a prescribed notice.

The temporary regulations do not provide rules for the following:

(1) the exception from the dyeing requirement for kerosene that is

removed from a terminal for use as a feedstock, (2) the exception from

the dyeing requirement for kerosene that is received by a registered

wholesale distributor that sells kerosene exclusively to ultimate

vendors that sell kerosene from a blocked pump, (3) the availability of

a credit or refund to a registered ultimate vendor that sells kerosene

for blending with heating oil to be used during periods of extreme or

unseasonable cold, and (4) the requirement that a terminal for kerosene

or diesel fuel cannot be an approved terminal unless the operator of

the terminal offers dyed diesel fuel and dyed kerosene for removal for

nontaxable use. Comments are also requested on these issues. Comments

may be submitted in the manner described under the ADDRESSES caption in

the notice of proposed rulemaking on these subjects in the Proposed

Rules section of this issue of the Federal Register.

Aviation Fuel

The 1997 Act added section 4091(d), which allows a registered

aviation fuel producer (including a registered wholesale distributor)

to obtain a refund of tax previously paid on aviation fuel that it

buys. The temporary regulations describe the procedures to be followed

for the allowance of this refund. These procedures are similar to the

procedures under section 4081(e) for refunds relating to taxable fuel

on which two taxes have been paid.

Registration of Heavy Vehicle Manufacturers and Retailers

The tax on the sale of heavy vehicles imposed by section 4051 is a

tax that applies to the first retail sale by the manufacturer,

importer, or retailer of a vehicle. The tax is not imposed if a

[[Page 35801]]

vehicle is sold for resale or for lease on a long-term basis. Under

existing regulations, this tax-free treatment applies only if both the

seller and the buyer are registered by the IRS. Under the 1997 Act,

however, the Treasury Department is to revise those regulations so that

those sales may be made tax free even if the parties have not been

registered by the IRS.

These temporary regulations generally provide that a person, such

as a vehicle manufacturer, may sell a vehicle tax free if it accepts

from its buyer, such as a vehicle retailer, a prescribed statement,

signed under penalties of perjury, stating that the buyer will resell

the vehicle or lease it on a long-term basis. Neither party will be

required to be registered.

The temporary regulations do not affect the registration

requirements for tax-free sales under section 4221, such as sales for

the exclusive use of a state or local government.

Special Analyses

It has been determined that this Treasury decision is not a

significant regulatory action as defined in EO 12866. Therefore, a

regulatory assessment is not required. It also has been determined that

section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)

does not apply to these regulations. It is hereby certified that the

collection of information in these regulations will not have a

significant economic impact on a substantial number of small entities.

This certification is based upon the fact that the time required to

prepare and submit the exemption certificates described in these

regulations (many of which are similar to certificates that are already

in use) is minimal and will not have a significant impact on those

small entities that choose to provide the certificates. Therefore, a

Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5

U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the

Internal Revenue Code, these temporary regulations will be submitted to

the Chief Counsel for Advocacy of the Small Business Administration for

comment on their impact on small business.

Drafting Information

The principal author of these regulations is Frank Boland, Office

of the Assistant Chief Counsel (Passthroughs and Special Industries),

IRS. However, other personnel from the IRS and Treasury Department

participated in their development.

List of Subjects

26 CFR Parts 48 and 145

Excise taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR parts 48, 145, and 602 are amended as follows:

PART 48--MANUFACTURERS AND RETAILERS EXCISE TAX REGULATIONS

Paragraph 1. The authority citation for part 48 is amended by

adding entries in numerical order to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Sections 48.4082-6T, 48.4082-7T, and 48.4082-8T also issued

under 26 U.S.C. 4082 * * *

Section 48.4101-3 also issued under 26 U.S.C. 4101(a) * * *

Sections 48.6427-10T and 48.6427-11T also issued under 26 U.S.C.

6427(n) * * *

Par. 2. Section 48.4081-1T is added to read as follows:

Sec. 48.4081-1T Taxable fuel; definitions (temporary).

(a) [Reserved]

(b) Definitions.

Kerosene means, after June 30, 1998,--

(1) The two grades of kerosene (No. 1-K and No. 2-K) described in

ASTM Specification D 3699; and

(2) Kerosene-type jet fuel described in ASTM Specification D 1655

and military specifications MIL-T-5624R and MIL-T-83133D (Grades JP-5

and JP-8). For availability of ASTM and military specification

material, see Sec. 48.4081-1(c)(2)(i).

Par. 3. Sections 48.4082-6T, 48.4082-7T, 48.4082-8T, 48.4082-9T,

and 48.4082-10T are added to read as follows:

Sec. 48.4082-6T Kerosene; treatment as diesel fuel in certain cases

(temporary).

For purposes of Secs. 48.4081-1(b) (the definition of taxable

fuel), 48.4081-2(c), 48.4082-1, 48.4082-4, and 48.4082-5, after June

30, 1998, diesel fuel includes kerosene.

Sec. 48.4082-7T Kerosene; notice required with respect to dyed

kerosene (temporary).

(a) In general. A legible and conspicuous notice stating: ``DYED

KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE'' must be posted

by a seller on any retail pump or other delivery facility where it

sells dyed kerosene for use by its buyer. Any seller that fails to post

the required notice on any retail pump or other delivery facility where

it sells dyed kerosene is, for purposes of the penalty imposed by

section 6715, presumed to know that the fuel will not be used for a

nontaxable use.

(b) Effective date. This section is applicable after June 30, 1998.

Sec. 48.4082-8T Kerosene; exemption for aviation-grade kerosene

(temporary).

(a) Overview. This section provides rules for exempting aviation-

grade kerosene from the tax imposed by section 4081. Generally, under

prescribed conditions, tax is not imposed on a removal, entry, or sale

of aviation-grade kerosene if the kerosene is destined for use as a

fuel in an aircraft.

(b) Definition.

Aviation-grade kerosene means kerosene-type jet fuel described in

ASTM Specification D 1655 and military specifications MIL-T-5624R and

MIL-T-83133D (Grades JP-5 and JP-8). For availability of ASTM and

military specification material, see Sec. 48.4081-1(c)(2)(i).

(c) Removals and entries not in connection with sales. Tax is not

imposed by section 4081 on the removal or entry not in connection with

a sale of aviation-grade kerosene if--

(1) The person otherwise liable for tax is a taxable fuel

registrant;

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

approved terminal; and

(3) The kerosene will be used as fuel in an aircraft and--

(i) The person otherwise liable for tax subsequently delivers the

kerosene into the fuel supply tank of an aircraft or is registered

under section 4101 with respect to the tax imposed by section 4091; or

(ii) The section 4091 tax has been imposed on the kerosene.

(d) Removals and entries in connection with sales. Tax is not

imposed under section 4081 on the removal or entry of aviation-grade

kerosene in connection with a sale if--

(1) The person otherwise liable for tax is a taxable fuel

registrant;

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

approved terminal; and

(3) The kerosene will be used as fuel in an aircraft and--

(i) The buyer is registered under section 4101 with respect to the

tax imposed by section 4091;

(ii) The buyer is buying for its use in a nontaxable use (as

defined in section 4092(a)); or

[[Page 35802]]

(iii) The section 4091 tax is, or has been, imposed on the

kerosene.

(e) Evidence under paragraph (d)(3)--(1) In general--(i) Sales

before October 1, 1998. For sales before October 1, 1998, the

requirements of paragraph (d)(3) of this section will be considered to

have been met if the person otherwise liable for tax has an unexpired

certificate (described in this paragraph (e)) from the buyer and has no

reason to believe that any information in the certificate is false.

(ii) Sales after September 30, 1998. For sales after September 30,

1998, the requirements of paragraph (d)(3) of this section are met only

if the person otherwise liable for tax has an unexpired certificate

(described in this paragraph (e)) from the buyer and has no reason to

believe that any information in the certificate is false.

(2) Certificate. The certificate to be provided by a buyer of

aviation-grade kerosene is a statement signed under penalties of

perjury by a person with authority to bind the buyer, in substantially

the same form as the model certificate provided in paragraph (e)(4) of

this section, and that contains all information necessary to complete

the model certificate. A new certificate or notice that the correct

certificate is invalid must be given if any information in the current

certificate changes. The certificate may be included as part of any

business records normally used to document a sale. The certificate

expires on the earliest of the following dates:

(i) The date one year after the effective date of the certificate

(which may be no earlier than the date it is signed).

(ii) The date the buyer provides a new certificate or notice that

the current certificate is invalid to the seller.

(iii) The date the seller is notified by the Internal Revenue

Service or the buyer that the buyer's right to provide a certificate

has been withdrawn.

(3) Withdrawal of the right to provide a certificate. The Internal

Revenue Service may withdraw the right of a buyer of aviation-grade

kerosene to provide a certificate under this section if the buyer uses

or disposes of aviation-grade kerosene to which a certificate applies

other than as a fuel in an aircraft. The Internal Revenue Service may

notify any seller to whom the buyer has provided a certificate that the

buyer's right to provide a certificate has been withdrawn.

(4) Model certificate.

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.)

Name, address, and employer identification number of seller

(``Buyer'') certifies the following under penalties of perjury:

Name of Buyer:---------------------------------------------------------

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 ________________.

______ 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.

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).

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. Buyer account or order number ________________.

Buyer will provide a new certificate to the seller if any

information in this certificate changes.

Buyer understands that if Buyer violates the terms of this

certificate, the Internal Revenue Service may withdraw Buyer's right

to provide a certificate.

Buyer has not been notified by the Internal Revenue Service that

its right to provide a certificate has been withdrawn.

Buyer understands that the fraudulent use of this certificate

may subject Buyer and all parties making any fraudulent use of this

certificate to a fine or imprisonment, or both, together with the

costs of prosecution.

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Printed or typed name of person signing

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Title of person signing

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Employer identification number

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Address of Buyer

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Signature and date signed

(f) Effective date. This section is applicable after June 30, 1998.

Sec. 48.4082-9T Kerosene; exemption for non-fuel feedstock purposes

(temporary).

(a) In general. Tax is not imposed under section 4081 and

Sec. 48.4081-3(e)(1) if, upon the removal of kerosene from a pipeline

or vessel, the kerosene is received by a taxable fuel registrant that

is a kerosene feedstock user. For this purpose, a kerosene feedstock

user is a person that receives kerosene by bulk transfer for its own

use in the manufacture or production of any substance (other than

gasoline, diesel fuel, or special fuels referred to in section 4041).

(b) Effective date. This section is applicable after June 30, 1998.

Sec. 48.4082-10T Kerosene; additional exemption from floor stocks tax

(temporary).

The floor stocks tax imposed by section 1032(g) of the Taxpayer

Relief Act of 1997 does not apply to kerosene that satisfies the dyeing

requirements of Sec. 48.4082-1(b) by the earlier of--

(a) September 30, 1998; or

(b) The time the kerosene is sold by the person otherwise liable

for the floor stocks tax.

Par. 4. Section 48.4091-3T is added to read as follows:

Sec. 48.4091-3T Aviation fuel; conditions to allowance of refunds of

aviation fuel tax under section 4091(d) (temporary).

(a) Overview. This section provides the conditions under which a

refund of tax imposed by section 4091 is allowable with respect to

taxed aviation fuel that is held by a registered aviation fuel

producer. No credit against any tax imposed by the Internal Revenue

Code is allowed under section 4091(d).

(b) Conditions to allowance of refund. A claim for refund of tax

imposed by section 4091 with respect to aviation fuel is allowed under

section 4091(d) and this section only if--

(1) A tax imposed by section 4091 with respect to the aviation fuel

was paid to the government by an importer or producer (the first

producer) and the tax has not been otherwise credited or refunded;

(2) After imposition of the tax, the aviation fuel is acquired by a

person that is a registered aviation fuel producer (the second

producer);

(3) The second producer has filed a timely claim for refund that

contains the information required under paragraph (d) of this section;

and

(4) The first producer and any person that owns the fuel after its

sale by the first producer and before its purchase by the second

producer (a subsequent seller) have met the reporting requirements of

paragraph (c) of this section.

(c) Reporting requirements--(1) In general. The reporting

requirements of this paragraph (c)(1) are met if the first producer

files a report (the first producer's report) that--

[[Page 35803]]

(i) Is in substantially the same form as the model report provided

in paragraph (c)(2) of this section (or such other model report as the

Commissioner may prescribe);

(ii) Contains all information necessary to complete such model

report; and

(iii) Is filed at the time and in the manner prescribed by the

Commissioner.

(2) Model first producer's report.

First Producer's Report

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First Producer's name, address, and employer identification number

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Buyer's name, address, and employer identification number

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Date and location of taxable sale

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Volume and type of aviation fuel sold

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Amount of federal excise tax paid on account of the sale

Under penalties of perjury, First Producer declares that First

Producer has examined this statement, including any accompanying

schedules and statements, and, to the best of First Producer's

knowledge and belief, it is true, correct and complete.

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Printed or typed name of the person signing

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Title of person signing

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Signature and date signed

(3) Information provided to buyers. The reporting requirements of

this paragraph (c)(3) are met if a first producer that filed a first

producer's report under paragraph (c)(1) of this section gives a copy

of the report to the person to whom the first producer sells the

aviation fuel.

(4) Statement of subsequent seller--(i) In general. The reporting

requirements of this paragraph (c)(4) are met if--

(ii)(A) Each subsequent seller gives to its buyer a copy of a

statement that provides all information (whether or not in the same

format) necessary to complete the model statement prescribed in

paragraph (c)(4)(ii) of this section (or such other model statement as

the Commissioner may prescribe); and

(B) The statement is provided at the bottom or on the back of the

copy of the first producer's report (or in an attached document).

(iii) Model statement describing subsequent sale.

Statement of Subsequent Seller (Aviation Fuel)

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Name, address, and employer identification number of seller in

subsequent sale

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Name, address, and employer identification number of buyer in

subsequent sale

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Date and location of subsequent sale

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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

with Seller's purchase of the aviation fuel described in this

statement.

Under penalties of perjury, Seller declares that Seller has

examined this statement, including any accompanying schedules and

statements, and, to the best of Seller's knowledge and belief, it is

true, correct and complete.

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Printed or typed name of person signing

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Title of person signing

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Signature and date signed

(5) Sale to multiple buyers. If a first producer's report relates

to aviation fuel that is divided among more than one buyer, multiple

copies of the first producer's report should be made at the stage that

the aviation fuel is divided and a copy given to each buyer. The

reporting requirements of this paragraph (c) will be met only with

respect to the fuel purchased by buyers that are given a copy of the

report including any statement required under paragraph (c)(4) of this

section.

(d) Form and content of claim--(1) In general. The following rules

apply to claims for refund under section 4091(d):

(i) The claim must be made by the second producer and must include

all the information described in paragraph (d)(2) of this section.

(ii) The claim must be made on Form 8849 (or such other form as the

Commissioner may designate) in accordance with the instructions on the

form. The form should be marked Section 4091(d) Claim at the top.

Section 4091(d) claims must not be included with a claim for a refund

under any other provision of the Internal Revenue Code.

(2) Information to be included in the claim. Each claim for a

refund under section 4091(d) must contain the following information

with respect to the aviation fuel covered by the claim:

(i) Volume and type of aviation fuel.

(ii) Date on which the second producer acquired the aviation fuel

to which the claim relates.

(iii) Amount of tax that the first producer paid to the government

and a statement that the second producer has not included the amount of

that tax in the sales price of the aviation fuel to which the claim

relates and has not collected that amount from the person that bought

the aviation fuel from the second producer, if any.

(iv) Name, address, and employer identification number of the first

producer that paid the tax to the government.

(v) A copy of the first producer's report that relates to the

aviation fuel covered by the claim.

(vi) A copy of any statement of a subsequent seller that the second

producer received with respect to that aviation fuel.

(e) Time for filing claim. A claim for refund under section 4091(d)

may be filed any time after the first producer has filed the return of

the tax to which the claim relates and before the end of the period

prescribed by section 6511 for the filing of a claim for refund of that

tax.

(f) Effective date. This section is applicable with respect to

refunds of tax imposed by section 4091 after December 31, 1998.

Par. 5. Section 48.4101-2T is added to read as follows:

Sec. 48.4101-2T Information reporting (temporary).

(a)(1) through (a)(3) [Reserved]

(a)(4) Registered aviation fuel producers. After June 30, 1999,

each person that is registered under section 4101 as a producer of

aviation fuel must make a return showing--

(i) The name and employer identification number of each

unregistered person to whom it sold aviation fuel for resale;

(ii) The volume of the aviation fuel sold to such persons;

(iii) The date and location of such sales; and

(iv) Any other information required by the Commissioner.

(b) through (d) [Reserved]

Par. 6. Section 48.4101-3T is added to read as follows:

Sec. 48.4101-3T Registration; special rules for kerosene (temporary).

(a) Application of Sec. 48.4101-1. The references to diesel fuel in

Secs. 48.4101-1(a)(1) and (f)(1)(ii) are treated as references to

either diesel fuel or kerosene, and the references in Secs. 48.4101-

1(b)(5)(i) and (f)(2) to paragraphs (c)(1) or (d) of Sec. 48.4101-1 are

treated as references also to paragraph (c) of this section.

(b) Transitional registration rule--(1) In general. A person is

treated as a taxable fuel registrant if, on June 30, 1998, the person--

[[Page 35804]]

(i) Is an enterer, refiner, terminal operator, or throughputter of

kerosene and is registered under section 4101 as a producer or importer

of aviation fuel; or

(ii) Operates one or more terminals that store kerosene (and no

other type of taxable fuel) and each position holder at each of its

terminals is a taxable fuel registrant.

(2) Termination. A person treated as registered under this

paragraph (b) is treated as registered until the earlier of--

(i) The effective date of a registration issued under Sec. 48.4101-

1(g)(3) with respect to kerosene;

(ii) The effective date of a revocation or suspension of

registration under Sec. 48.4101-1(i); or

(iii) April 1, 1999.

(c) Persons that may, but are not required to, be registered. A

person may, but is not required to, be registered under section 4101

with respect to the tax imposed by section 4081 if the person is a

kerosene feedstock user (defined in Sec. 48.4082-9T).

(d) Additional terms and conditions of registration for certain

terminal operators. A legible and conspicuous notice stating: ``DYED

KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE'' must be

provided by each terminal operator to any person that receives dyed

kerosene at a terminal rack of that operator. This notice must be

provided by the time of the removal and must appear on all shipping

papers, bills of lading, and similar documents that are provided by the

terminal operator to accompany the removal of the fuel.

(e) Effective date. This section is applicable after June 30, 1998.

Par. 7. Sections 48.6427-10T and 48.6427-11T are added to read as

follows:

Sec. 48.6427-10T Claims with respect to kerosene (temporary).

(a) Claims under Sec. 48.6427-8--(1) In general. For purposes of

Sec. 48.6427-8, diesel fuel includes kerosene.

(2) Blocked pumps. Kerosene is treated as satisfying the conditions

of Sec. 48.6427-8(b)(1) only if it was not sold from a blocked pump (as

described in Sec. 48.6427-11T(b)).

(b) Claims under Sec. 48.6427-9. For purposes of Sec. 48.6427-9,

diesel fuel includes kerosene.

(c) Effective date. This section is applicable to kerosene taxed

after June 30, 1998.

Sec. 48.6427-11T Special rules for claims by registered ultimate

vendors of kerosene (blocked pump) (temporary).

(a) Overview. This section provides rules relating to claims by

registered ultimate vendors for payments and income tax credits with

respect to kerosene that is sold from a blocked pump. For rules

relating to claims by registered ultimate vendors for kerosene that is

sold for farming use or use by a State, see Secs. 48.6427-9 and

48.6427-10T.

(b) Definition; blocked pump. A blocked pump is a fuel pump that

meets the following conditions:

(1) It is used to dispense undyed kerosene that is sold at retail

for use by the buyer in a nontaxable use.

(2) It is at a fixed location and cannot (because, for example, of

its distance from a road surface or train track or the length of its

delivery hose) be used to dispense fuel directly into the fuel supply

tank of a diesel-powered highway vehicle or train.

(3) It is identified with a legible and conspicuous notice stating:

``UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY''.

(c) Conditions to allowance of credit or payment. Notwithstanding

Sec. 48.6427-9(c), a claim for a credit or payment with respect to

undyed kerosene is allowable under section 6427(l)(5)(B)(i) if--

(1) Tax was imposed by section 4081 on the kerosene to which the

claim relates;

(2) The claimant sold the kerosene from a blocked pump;

(3) The claimant is a registered ultimate vendor of kerosene; and

(4) The claimant has filed a timely claim for a credit or payment

that contains the information required under paragraph

(e) of this section.

(d) Form of claim. The rules of Sec. 48.6427-9(d) apply to claims

filed under this section.

(e) Content of claim. Each claim for credit or payment under this

section must contain the following information with respect to all the

kerosene covered by the claim:

(1) The total number of gallons covered by the claim.

(2) A statement by the claimant that tax has been imposed on the

kerosene covered by the claim.

(3) The claimant's registration number.

(4) A statement that the claimant has not included the amount of

the tax in its sales price of the kerosene and has not collected the

amount of tax from its buyer.

(f) Time and place for filing claim. The rules of Sec. 48.6427-9(f)

apply to claims filed under this section.

(g) Effective date. This section is applicable June 30, 1998.

PART 145--TEMPORARY EXCISE TAX REGULATIONS UNDER THE HIGHWAY

REVENUE ACT OF 1982 (PUB. L. 97-424)

Par. 8. The authority citation for part 145 continues to read in

part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 9. Section 145.4052-1 is amended as follows:

1. Paragraph (a)(2)(ii) is redesignated as paragraph (a)(2)(ii)(A).

2. Paragraph (a)(2)(ii)(A), as redesignated, is amended by removing

the language ``Both'' and adding ``For a sale before July 1, 1998,

both'' in its place and removing the language ``or'' at the end.

3. Paragraph (a)(2)(ii)(B) is added to read as follows:

Sec. 145.4052-1 Special rules and definitions.

(a) * * *

(2) * * *

(ii) * * *

(B) For a sale after June 30, 1998, and regardless of the

registration status of the seller or the purchaser, the seller has in

good faith accepted from the purchaser a statement that the purchaser

executed in good faith and that is in substantially the same form as

the certificate described in paragraph (a)(6) of this section, except

that the statement must be signed under penalties of perjury and need

not contain a registration number, or

* * * * *

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

Par. 10. The authority citation for part 602 continues to read as

follows:

Authority: 26 U.S.C. 7805.

Par. 11. In Sec. 602.101, paragraph (c) is amended by:

1. Removing the following entry from the table:

Sec. 602.101 OMB Control numbers.

* * * * *

(c) * * *

------------------------------------------------------------------------

Current OMB

CFR part or section where identified and described control

number

------------------------------------------------------------------------

* * * * *

145.4052-1................................................. 1545-0120

1545-0745

1545-1076

[[Page 35805]]

* * * * *

------------------------------------------------------------------------

2. Adding entries in numerical order to the table to read as

follows:

Sec. 602.101 OMB Control numbers.

* * * * *

(c) * * *

------------------------------------------------------------------------

Current OMB

CFR part or section where identified and described control

number

------------------------------------------------------------------------

* * * * *

48.4082-7T................................................. 1545-1608

48.4082-8T................................................. 1545-1608

48.4091-3T................................................. 1545-1608

* * * * *

48.4101-2T................................................. 1545-1608

48.4101-3T................................................. 1545-1608

* * * * *

48.6427-11T................................................ 1545-1608

* * * * *

145.4052-1................................................. 1545-1608

1545-0120

1545-0745

1545-1076

* * * * *

------------------------------------------------------------------------

Michael P. Dolan,

Deputy Commissioner of Internal Revenue.

Approved: June 17, 1998.

Donald C. Lubick,

Assistant Secretary of the Treasury.

[FR Doc. 98-17400 Filed 6-26-98; 2:02pm]

BILLING CODE 4830-01-P