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26 U.S.C. § 4081 — Imposition of tax

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 1,304 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section imposes excise taxes when taxable fuel is removed, entered, or sold in specified circumstances. It sets rates and special rules for gasoline, diesel fuel, kerosene, aviation, blending, refunds, and termination dates.

(a) Tax imposed. (1) A tax at the rate in (2) applies to (i) taxable fuel removed from a refinery, (ii) fuel removed from a terminal, (iii) fuel entered into the United States for consumption, use, or warehousing, and (iv) fuel sold to a person not registered under section 4101, unless the fuel was previously removed or entered in one of those first three ways. The tax does not apply to fuel transferred in bulk by pipeline or vessel to a registered terminal or refinery if the remover or importer, the pipeline or vessel operator, and the terminal or refinery operator are registered under section 4101. A deep-draft vessel operator need not be registered for the specified bulk entry. (2) Rates are 18.3 cents per gallon for gasoline other than aviation gasoline, 19.3 cents for aviation gasoline, and 24.3 cents for diesel fuel or kerosene. Each rate increases by 0.1 cent for the Leaking Underground Storage Tank Trust Fund financing rate. Kerosene put directly from a refinery or terminal into an aircraft fuel tank is taxed at 4.3 cents per gallon for registered commercial aviation and 21.8 cents for other aviation. A diesel-water emulsion with at least 14 percent water and an EPA-registered additive is taxed at 19.7 cents instead of 24.3 cents, but only if the remover, seller, or user is registered under section 4101. (3) For the aviation rates, an airport refueler truck, tanker, or wagon is treated as part of a terminal if the terminal is at an airport, the kerosene is delivered only into aircraft there, the vehicle meets the equipment, highway-registration, and operator requirements, and—except in regulatory exigencies—no highway-registered vehicle is loaded there. The operator must provide the required daily delivery information, and the terminal operator must report it. The commercial-aviation rate applies in a secured airport area; the other aviation rate applies elsewhere. (4) The commercial-aviation user pays that tax, and fuel is treated as used when put into the aircraft tank.

(b) Blender’s later removal or sale. (1) Tax at the subsection (a) rate applies to taxable fuel removed or sold by its blender. (2) If that tax applies and the blender proves the amount already paid under (a), the earlier tax is a credit against the blender’s tax.

(c) Fuel later separated from an emulsion. A person who separates taxable fuel from an emulsion taxed at the special rate, or for which a section 6427 credit or payment was allowed, is treated as the refiner. Tax on that person’s removal is reduced by tax imposed, but not credited or refunded, on an earlier removal or entry.

(d) Termination. (1) After September 30, 2028, the gasoline and diesel-or-kerosene rates in (a)(2)(A)(i) and (iii) are 4.3 cents per gallon. (2) The aviation-fuel rates in (a)(2)(A)(ii) and (C)(ii) are 4.3 cents per gallon after December 31, 1996, and before 7 days after enactment of the Airport and Airway Trust Fund Tax Reinstatement Act of 1997, and after September 30, 2028. (3) The underground-storage-tank financing rate applies after September 30, 1997, and before October 1, 2028.

(e) Refunds. Under regulations, a person who paid this tax may receive a refund without interest if the person proves that an earlier tax was paid on the same fuel and was not credited or refunded. The refund is handled as an overpayment of this tax.

the actual law source: uscode.house.gov ↗public domain
(a) Tax imposed
(1) Tax on removal, entry, or sale
(A) In general

There is hereby imposed a tax at the rate specified in paragraph (2) on—

(i)

the removal of a taxable fuel from any refinery,

(ii)

the removal of a taxable fuel from any terminal,

(iii)

the entry into the United States of any taxable fuel for consumption, use, or warehousing, and

(iv)

the sale of a taxable fuel to any person who is not registered under section 4101 unless there was a prior taxable removal or entry of such fuel under clause (i), (ii), or (iii).

(B) Exemption for bulk transfers to registered terminals or refineries
(i) In general

The tax imposed by this paragraph shall not apply to any removal or entry of a taxable fuel transferred in bulk by pipeline or vessel to a terminal or refinery if the person removing or entering the taxable fuel, the operator of such pipeline or vessel (except as provided in clause (ii)), and the operator of such terminal or refinery are registered under section 4101.

(ii) Nonapplication of registration to vessel operators entering by deep-draft vessel

For purposes of clause (i), a vessel operator is not required to be registered with respect to the entry of a taxable fuel transferred in bulk by a vessel described in section 4042(c)(1).

(2) Rates of tax
(A) In general

The rate of the tax imposed by this section is—

(i)

in the case of gasoline other than aviation gasoline, 18.3 cents per gallon,

(ii)

in the case of aviation gasoline, 19.3 cents per gallon, and

(iii)

in the case of diesel fuel or kerosene, 24.3 cents per gallon.

(B) Leaking Underground Storage Tank Trust Fund tax

The rates of tax specified in subparagraph (A) shall each be increased by 0.1 cent per gallon. The increase in tax under this subparagraph shall in this title be referred to as the Leaking Underground Storage Tank Trust Fund financing rate.

(C) Taxes imposed on fuel used in aviation

In the case of kerosene which is removed from any refinery or terminal directly into the fuel tank of an aircraft for use in aviation, the rate of tax under subparagraph (A)(iii) shall be—

(i)

in the case of use for commercial aviation by a person registered for such use under section 4101, 4.3 cents per gallon, and

(ii)

in the case of use for aviation not described in clause (i), 21.8 cents per gallon.

(D) Diesel-water fuel emulsion

In the case of diesel-water fuel emulsion at least 14 percent of which is water and with respect to which the emulsion additive is registered by a United States manufacturer with the Environmental Protection Agency pursuant to section 211 of the Clean Air Act (as in effect on March 31, 2003), subparagraph (A)(iii) shall be applied by substituting “19.7 cents” for “24.3 cents”. The preceding sentence shall not apply to the removal, sale, or use of diesel-water fuel emulsion unless the person so removing, selling, or using such fuel is registered under section 4101.

(3) Certain refueler trucks, tankers, and tank wagons treated as terminal
(A) In general

For purposes of paragraph (2)(C), a refueler truck, tanker, or tank wagon shall be treated as part of a terminal if—

(i)

such terminal is located within an airport,

(ii)

any kerosene which is loaded in such truck, tanker, or wagon at such terminal is for delivery only into aircraft at the airport in which such terminal is located,

(iii)

such truck, tanker, or wagon meets the requirements of subparagraph (B) with respect to such terminal, and

(iv)

except in the case of exigent circumstances identified by the Secretary in regulations, no vehicle registered for highway use is loaded with kerosene at such terminal.

(B) Requirements

A refueler truck, tanker, or tank wagon meets the requirements of this subparagraph with respect to a terminal if such truck, tanker, or wagon—

(i)

has storage tanks, hose, and coupling equipment designed and used for the purposes of fueling aircraft,

(ii)

is not registered for highway use, and

(iii)

is operated by—

(I)

the terminal operator of such terminal, or

(II)

a person that makes a daily accounting to such terminal operator of each delivery of fuel from such truck, tanker, or wagon.

(C) Reporting

The Secretary shall require under section 4101(d) reporting by such terminal operator of—

(i)

any information obtained under subparagraph (B)(iii)(II), and

(ii)

any similar information maintained by such terminal operator with respect to deliveries of fuel made by trucks, tankers, or wagons operated by such terminal operator.

(D) Applicable rate

For purposes of paragraph (2)(C), in the case of any kerosene treated as removed from a terminal by reason of this paragraph—

(i)

the rate of tax specified in paragraph (2)(C)(i) in the case of use described in such paragraph shall apply if such terminal is located within a secured area of an airport, and

(ii)

the rate of tax specified in paragraph (2)(C)(ii) shall apply in all other cases.

(4) Liability for tax on kerosene used in commercial aviation

For purposes of paragraph (2)(C)(i), the person who uses the fuel for commercial aviation shall pay the tax imposed under such paragraph. For purposes of the preceding sentence, fuel shall be treated as used when such fuel is removed into the fuel tank.

(b) Treatment of removal or subsequent sale by blender
(1) In general

There is hereby imposed a tax at the rate determined under subsection (a) on taxable fuel removed or sold by the blender thereof.

(2) Credit for tax previously paid

If—

(A)

tax is imposed on the removal or sale of a taxable fuel by reason of paragraph (1), and

(B)

the blender establishes the amount of the tax paid with respect to such fuel by reason of subsection (a),

the amount of the tax so paid shall be allowed as a credit against the tax imposed by reason of paragraph (1).

(c) Later separation of fuel from diesel-water fuel emulsion

If any person separates the taxable fuel from a diesel-water fuel emulsion on which tax was imposed under subsection (a) at a rate determined under subsection (a)(2)(D) (or with respect to which a credit or payment was allowed or made by reason of section 6427), such person shall be treated as the refiner of such taxable fuel. The amount of tax imposed on any removal of such fuel by such person shall be reduced by the amount of tax imposed (and not credited or refunded) on any prior removal or entry of such fuel.

(d) Termination
(1) In general

The rates of tax specified in clauses (i) and (iii) of subsection (a)(2)(A) shall be 4.3 cents per gallon after September 30, 2028.

(2) Aviation fuels

The rates of tax specified in subsection (a)(2)(A)(ii) and (a)(2)(C)(ii) shall be 4.3 cents per gallon—

(A)

after December 31, 1996, and before the date which is 7 days after the date of the enactment of the Airport and Airway Trust Fund Tax Reinstatement Act of 1997, and

(B)

after September 30, 2028.

(3) Leaking Underground Storage Tank Trust Fund financing rate

The Leaking Underground Storage Tank Trust Fund financing rate under subsection (a)(2) shall apply after September 30, 1997, and before October 1, 2028.

(e) Refunds in certain cases

Under regulations prescribed by the Secretary, if any person who paid the tax imposed by this section with respect to any taxable fuel establishes to the satisfaction of the Secretary that a prior tax was paid (and not credited or refunded) with respect to such taxable fuel, then an amount equal to the tax paid by such person shall be allowed as a refund (without interest) to such person in the same manner as if it were an overpayment of tax imposed by this section.

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 483; Mar. 30, 1955, ch. 18, § 3(a)(3), 69 Stat. 14; Mar. 29, 1956, ch. 115, § 3(a)(3), 70 Stat. 66; June 29, 1956, ch. 462, title II, § 205, 70 Stat. 389; Pub. L. 86–342, title II, § 201(a), Sept. 21, 1959, 73 Stat. 613; Pub. L. 87–61, title II, § 201(b)–(d), June 29, 1961, 75 Stat. 123, 124; Pub. L. 91–605, title III, § 303(a)(6), Dec. 31, 1970, 84 Stat. 1744; Pub. L. 94–280, title III, § 303(a)(6), May 5, 1976, 90 Stat. 456; Pub. L. 95–599, title V, § 502(a)(5), Nov. 6, 1978, 92 Stat. 2756; Pub. L. 95–618, title II, § 221(a)(1), Nov. 9, 1978, 92 Stat. 3185; Pub. L. 96–223, title II, § 232(a)(1), (b)(3)(A), (d)(3), Apr. 2, 1980, 94 Stat. 273, 276, 277; Pub. L. 97–424, title V, §§ 511(a)(1), (d)(1), 516(a)(3), Jan. 6, 1983, 96 Stat. 2169, 2171, 2182; Pub. L. 98–369, div. A, title VII, § 732(a)(1), (2), title IX, § 912(b), (f), July 18, 1984, 98 Stat. 976, 977, 1007; Pub. L. 99–499, title V, § 521(a)(1), Oct. 17, 1986, 100 Stat. 1774; Pub. L. 99–514, title XVII, § 1703(a), Oct. 22, 1986, 100 Stat. 2774; Pub. L. 100–17, title V, § 502(a)(4), (c)(2), Apr. 2, 1987, 101 Stat. 256, 257; Pub. L. 100–203, title X, § 10502(d)(2), Dec. 22, 1987, 101 Stat. 1330–444; Pub. L. 100–647, title I, § 1017(c)(1), (14), title II, § 2001(d)(5), title VI, § 6104(a), Nov. 10, 1988, 102 Stat. 3575, 3577, 3595, 3711; Pub. L. 101–508, title XI, §§ 11211(a)(1)–(3), (5)(A)–(C), (c)(3), (e)(3), 11212(a), (d)(1), (e)(2), 11215(a), Nov. 5, 1990, 104 Stat. 1388–423, 1388–424, 1388–426, 1388–427, 1388–430, 1388–432, 1388–436; Pub. L. 102–240, title VIII, § 8002(a)(3), Dec. 18, 1991, 105 Stat. 2203; Pub. L. 102–486, title XIX, § 1920(a), (b), Oct. 24, 1992, 106 Stat. 3026; Pub. L. 103–66, title XIII, §§ 13241(a), 13242(a), Aug. 10, 1993, 107 Stat. 510, 514; Pub. L. 104–188, title I, § 1609(a)(2), (g)(1), (2), (4)(B), Aug. 20, 1996, 110 Stat. 1841–1843; Pub. L. 105–2, § 2(a)(2), Feb. 28, 1997, 111 Stat. 4; Pub. L. 105–34, title X, §§ 1031(a)(2), 1032(b), 1033, Aug. 5, 1997, 111 Stat. 929, 933, 937; Pub. L. 105–178, title IX, §§ 9002(a)(1)(F), 9003(a)(1)(C), (b)(2)(B), (C), June 9, 1998, 112 Stat. 499, 502, 503; Pub. L. 108–357, title III, § 301(c)(7), title VIII, §§ 853(a)(1)–(3)(A), (4), 860(a), Oct. 22, 2004, 118 Stat. 1461, 1609–1611, 1618; Pub. L. 109–6, § 1(a), Mar. 31, 2005, 119 Stat. 20; Pub. L. 109–58, title XIII, §§ 1343(a), (b)(2), 1362(a), Aug. 8, 2005, 119 Stat. 1051, 1052, 1059; Pub. L. 109–59, title XI, §§ 11101(a)(1)(F), 11151(b)(1), (2), 11161(a)(1)–(4)(D), 11166(b)(1), Aug. 10, 2005, 119 Stat. 1944, 1968–1970, 1976; Pub. L. 110–161, div. K, title I, § 116(a), Dec. 26, 2007, 121 Stat. 2381; Pub. L. 110–190, § 2(a), Feb. 28, 2008, 122 Stat. 643; Pub. L. 110–253, § 2(a), June 30, 2008, 122 Stat. 2417; Pub. L. 110–330, § 2(a), Sept. 30, 2008, 122 Stat. 3717; Pub. L. 111–12, § 2(a), Mar. 30, 2009, 123 Stat. 1457; Pub. L. 111–69, § 2(a), Oct. 1, 2009, 123 Stat. 2054; Pub. L. 111–116, § 2(a), Dec. 16, 2009, 123 Stat. 3031; Pub. L. 111–153, § 2(a), Mar. 31, 2010, 124 Stat. 1084; Pub. L. 111–161, § 2(a), Apr. 30, 2010, 124 Stat. 1126; Pub. L. 111–197, § 2(a), July 2, 2010, 124 Stat. 1353; Pub. L. 111–216, title I, § 101(a), Aug. 1, 2010, 124 Stat. 2349; Pub. L. 111–249, § 2(a), Sept. 30, 2010, 124 Stat. 2627; Pub. L. 111–329, § 2(a), Dec. 22, 2010, 124 Stat. 3566; Pub. L. 112–7, § 2(a), Mar. 31, 2011, 125 Stat. 31; Pub. L. 112–16, § 2(a), May 31, 2011, 125 Stat. 218; Pub. L. 112–21, § 2(a), June 29, 2011, 125 Stat. 233; Pub. L. 112–27, § 2(a), Aug. 5, 2011, 125 Stat. 270; Pub. L. 112–30, title I, § 142(a)(1)(C), (2)(D), title II, § 202(a), Sept. 16, 2011, 125 Stat. 356, 357; Pub. L. 112–91, § 2(a), Jan. 31, 2012, 126 Stat. 3; Pub. L. 112–95, title XI, § 1101(a), Feb. 14, 2012, 126 Stat. 148; Pub. L. 112–102, title IV, § 402(a)(1)(C), (2)(D), Mar. 30, 2012, 126 Stat. 282; Pub. L. 112–140, title IV, § 402(a)(1)(C), (2)(D), June 29, 2012, 126 Stat. 402; Pub. L. 112–141, div. D, title I, § 40102(a)(1)(C), (2)(D), July 6, 2012, 126 Stat. 844; Pub. L. 114–55, title II, § 202(a), Sept. 30, 2015, 129 Stat. 525; Pub. L. 114–94, div. C, title XXXI, § 31102(a)(1)(C), (2)(D), Dec. 4, 2015, 129 Stat. 1727; Pub. L. 114–141, title II, § 202(a), Mar. 30, 2016, 130 Stat. 324; Pub. L. 114–190, title I, § 1202(a), July 15, 2016, 130 Stat. 619; Pub. L. 115–63, title II, § 202(a), Sept. 29, 2017, 131 Stat. 1171; Pub. L. 115–141, div. M, title I, § 202(a), Mar. 23, 2018, 132 Stat. 1048; Pub. L. 115–254, div. B, title VIII, § 802(a), Oct. 5, 2018, 132 Stat. 3428; Pub. L. 117–58, div. H, title I, § 80102(a)(1)(C), (2)(D), Nov. 15, 2021, 135 Stat. 1327; Pub. L. 118–15, div. B, title II, § 2212(a), Sept. 30, 2023, 137 Stat. 85; Pub. L. 118–34, title II, § 202(a), Dec. 26, 2023, 137 Stat. 1115; Pub. L. 118–41, title II, § 202(a), Mar. 8, 2024, 138 Stat. 23; Pub. L. 118–63, title XIII, § 1302(a), May 16, 2024, 138 Stat. 1433.)

history & why it existsrecord from the source credit
  • 1954Enacted · Act of Aug. 16, 1954, ch. 736
  • 1955Amended · Act of Mar. 30, 1955, ch. 18 · 69 Stat. 14
  • 1956Amended · Act of Mar. 29, 1956, ch. 115 · 70 Stat. 66
  • 1956Amended · Act of June 29, 1956, ch. 462 · 70 Stat. 389
  • 1959Amended · Pub. L. 86-342 · 73 Stat. 613
  • 1961Amended · Pub. L. 87-61 · 75 Stat. 123, 124
  • 1970Amended · Pub. L. 91-605 · 84 Stat. 1744
  • 1976Amended · Pub. L. 94-280 · 90 Stat. 456
  • 1978Amended · Pub. L. 95-599 · 92 Stat. 2756
  • 1978Amended · Pub. L. 95-618 · 92 Stat. 3185
  • 1980Amended · Pub. L. 96-223 · 94 Stat. 273, 276, 277
  • 1983Amended · Pub. L. 97-424 · 96 Stat. 2169, 2171, 2182
  • 1984Amended · Pub. L. 98-369 · 98 Stat. 976, 977, 1007
  • 1986Amended · Pub. L. 99-499 · 100 Stat. 1774
  • 1986Amended · Pub. L. 99-514 · 100 Stat. 2774
  • 1987Amended · Pub. L. 100-17 · 101 Stat. 256, 257
  • 1987Amended · Pub. L. 100-203 · 101 Stat. 1330
  • 1988Amended · Pub. L. 100-647 · 102 Stat. 3575, 3577, 3595, 3711
  • 1990Amended · Pub. L. 101-508 · 104 Stat. 1388
  • 1991Amended · Pub. L. 102-240 · 105 Stat. 2203
  • 1992Amended · Pub. L. 102-486 · 106 Stat. 3026
  • 1993Amended · Pub. L. 103-66 · 107 Stat. 510, 514
  • 1996Amended · Pub. L. 104-188 · 110 Stat. 1841
  • 1997Amended · Pub. L. 105-2 · 111 Stat. 4
  • 1997Amended · Pub. L. 105-34 · 111 Stat. 929, 933, 937
  • 1998Amended · Pub. L. 105-178 · 112 Stat. 499, 502, 503
  • 2004Amended · Pub. L. 108-357 · 118 Stat. 1461, 1609
  • 2005Amended · Pub. L. 109-6 · 119 Stat. 20
  • 2005Amended · Pub. L. 109-58 · 119 Stat. 1051, 1052, 1059
  • 2005Amended · Pub. L. 109-59 · 119 Stat. 1944, 1968
  • 2007Amended · Pub. L. 110-161 · 121 Stat. 2381
  • 2008Amended · Pub. L. 110-190 · 122 Stat. 643
  • 2008Amended · Pub. L. 110-253 · 122 Stat. 2417
  • 2008Amended · Pub. L. 110-330 · 122 Stat. 3717
  • 2009Amended · Pub. L. 111-12 · 123 Stat. 1457
  • 2009Amended · Pub. L. 111-69 · 123 Stat. 2054
  • 2009Amended · Pub. L. 111-116 · 123 Stat. 3031
  • 2010Amended · Pub. L. 111-153 · 124 Stat. 1084
  • 2010Amended · Pub. L. 111-161 · 124 Stat. 1126
  • 2010Amended · Pub. L. 111-197 · 124 Stat. 1353
  • 2010Amended · Pub. L. 111-216 · 124 Stat. 2349
  • 2010Amended · Pub. L. 111-249 · 124 Stat. 2627
  • 2010Amended · Pub. L. 111-329 · 124 Stat. 3566
  • 2011Amended · Pub. L. 112-7 · 125 Stat. 31
  • 2011Amended · Pub. L. 112-16 · 125 Stat. 218
  • 2011Amended · Pub. L. 112-21 · 125 Stat. 233
  • 2011Amended · Pub. L. 112-27 · 125 Stat. 270
  • 2011Amended · Pub. L. 112-30 · 125 Stat. 356, 357
  • 2012Amended · Pub. L. 112-91 · 126 Stat. 3
  • 2012Amended · Pub. L. 112-95 · 126 Stat. 148
  • 2012Amended · Pub. L. 112-102 · 126 Stat. 282
  • 2012Amended · Pub. L. 112-140 · 126 Stat. 402
  • 2012Amended · Pub. L. 112-141 · 126 Stat. 844
  • 2015Amended · Pub. L. 114-55 · 129 Stat. 525
  • 2015Amended · Pub. L. 114-94 · 129 Stat. 1727
  • 2016Amended · Pub. L. 114-141 · 130 Stat. 324
  • 2016Amended · Pub. L. 114-190 · 130 Stat. 619
  • 2017Amended · Pub. L. 115-63 · 131 Stat. 1171
  • 2018Amended · Pub. L. 115-141 · 132 Stat. 1048
  • 2018Amended · Pub. L. 115-254 · 132 Stat. 3428
  • 2021Amended · Pub. L. 117-58 · 135 Stat. 1327
  • 2023Amended · Pub. L. 118-15 · 137 Stat. 85
  • 2023Amended · Pub. L. 118-34 · 137 Stat. 1115
  • 2024Amended · Pub. L. 118-41 · 138 Stat. 23
  • 2024Amended · Pub. L. 118-63 · 138 Stat. 1433

A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.

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