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Internal Revenue Code, § 4082. Exemptions For Diesel Fuel And Kerosene

I.R.C. § 4082(a) In General
The tax imposed by section 4081 shall not apply to diesel fuel and kerosene—
I.R.C. § 4082(a)(1)
which the Secretary determines is destined for a nontaxable use,
I.R.C. § 4082(a)(2)
which is indelibly dyed by mechanical injection in accordance with regulations which the Secretary shall prescribe, and
I.R.C. § 4082(a)(3)
which meets such marking requirements (if any) as may be prescribed by the Secretary in regulations.
Such regulations shall allow an individual choice of dye color approved by the Secretary or chosen from any list of approved dye colors that the Secretary may publish.
I.R.C. § 4082(b) Nontaxable Use
For purposes of this section, the term “nontaxable use” means—
I.R.C. § 4082(b)(1)
any use which is exempt from the tax imposed by section 4041(a)(1) other than by reason of a prior imposition of tax,
I.R.C. § 4082(b)(2)
any use in a train, and
I.R.C. § 4082(b)(3)
any use described in section 4041(a)(1)(C)(iii)(II).
The term “nontaxable use” does not include the use of kerosene in an aircraft and such term shall not include any use described in section 6421(e)(2)(C).
I.R.C. § 4082(c) Exception To Dyeing Requirements
Paragraph (2) of subsection (a) shall not apply with respect to any diesel fuel and kerosene—
I.R.C. § 4082(c)(1)
removed, entered, or sold in a State for ultimate sale or use in an area of such State during the period such area is exempted from the fuel dyeing requirements under subsection (i) of section 211 of the Clean Air Act (as in effect on the date of the enactment of this subsection) by the Administrator of the Environmental Protection Agency under paragraph (4) of such subsection (i) (as so in effect), and
I.R.C. § 4082(c)(2)
the use of which is certified pursuant to regulations issued by the Secretary.
I.R.C. § 4082(d) Additional Exceptions To Dyeing Requirements For Kerosene
I.R.C. § 4082(d)(1) Use For Non-Fuel Feedstock Purposes
Subsection (a)(2) shall not apply to kerosene—
I.R.C. § 4082(d)(1)(A)
received by pipeline or vessel for use by the person receiving the kerosene in the manufacture or production of any substance (other than gasoline, diesel fuel, or special fuels referred to in section 4041), or
I.R.C. § 4082(d)(1)(B)
to the extent provided in regulations, removed or entered—
I.R.C. § 4082(d)(1)(B)(i)
for such a use by the person removing or entering the kerosene, or
I.R.C. § 4082(d)(1)(B)(ii)
for resale by such person for such a use by the purchaser,
but only if the person receiving, removing, or entering the kerosene and such purchaser (if any) are registered under section 4101 with respect to the tax imposed by section 4081.
I.R.C. § 4082(d)(2) Wholesale Distributors
To the extent provided in regulations, subsection (a)(2) shall not apply to kerosene received by a wholesale distributor of kerosene if such distributor—
I.R.C. § 4082(d)(2)(A)
is registered under section 4101 with respect to the tax imposed by section 4081 on kerosene, and
I.R.C. § 4082(d)(2)(B)
sells kerosene exclusively to ultimate vendors described in section 6427(l)(5)(B) with respect to kerosene.
I.R.C. § 4082(e) Kerosene Removed Into An Aircraft
In the case of kerosene (other than kerosene with respect to which tax is imposed under section 4043) which is exempt from the tax imposed by section 4041(c) (other than by reason of a prior imposition of tax) and which is removed from any refinery or terminal directly into the fuel tank of an aircraft—
I.R.C. § 4082(e)(1)
the rate of tax under section 4081(a)(2)(A)(iii) shall be zero, and
I.R.C. § 4082(e)(2)
if such aircraft is employed in foreign trade or trade between the United States and any of its possessions, the increase in such rate under section 4081(a)(2)(B) shall be zero.
For purposes of this subsection, any removal described in section 4081(a)(3)(A) shall be treated as a removal from a terminal but only if such terminal is located within a secure area of an airport.
I.R.C. § 4082(f) Exception For Leaking Underground Storage Tank Trust Fund Financing Rate
I.R.C. § 4082(f)(1) In General
Subsection (a) shall not apply to the tax imposed under section 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.
I.R.C. § 4082(f)(2) Exception For Export, Etc.
Paragraph (1) shall not apply with respect to any fuel if the Secretary determines that such fuel is destined for export or for use by the purchaser as supplies for vessels (within the meaning of section 4221(d)(3)) employed in foreign trade or trade between the United States and any of its possessions.
I.R.C. § 4082(g) Regulations
The Secretary shall prescribe such regulations as may be necessary to carry out this section, including regulations requiring the conspicuous labeling of retail diesel fuel and kerosene pumps and other delivery facilities to assure that persons are aware of which fuel is available only for nontaxable uses.
I.R.C. § 4082(h) Cross reference
For tax on train and certain bus uses of fuel purchased tax-free, see subsections (a)(1) and (d)(3) of section 4041.
(Aug. 16, 1954, ch. 736, 68A Stat. 483; Sept. 21, 1959, Pub. L. 86-342, title II, 201(e)(1), (2), 73 Stat. 615; June 21, 1965, Pub. L. 89-44, title VIII, 802(a)(1), (b)(1), 79 Stat. 159; May 21, 1970, Pub. L. 91-258, title II, 205(c)(6), 84 Stat. 242; July 18, 1984, Pub. L. 98-369, div. A, title VII, 733(a), 734(c)(1), 98 Stat. 977, 979; Oct. 22, 1986, Pub. L. 99-514, title XVII, 1703(a), 100 Stat. 2775; Aug. 10, 1993, Pub. L. 103-66, title XIII, Sec. 13242(a), 107 Stat. 312; Aug. 20, 1996, Pub. L. 104-188, 1801, 110 Stat. 1755; Pub. L. 105-34, title IX, Sec. 1032, Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title VI, Sec. 6010(h), July 22, 1998, 112 Stat 685; Pub. L. 108-357, title II, VIII, Sec. 241, 851, 853, 857, Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-58, title XIII, Sec. 1362(b), Aug. 8, 2005, 119 Stat. 594; Pub. L. 109-59, title XI, Sec. 11161(a), (b), Aug. 10, 2005, 119 Stat. 1144; Pub. L. 109-432, div. A, title IV, Sec. 420(b)(2), Dec. 20, 2006, 120 Stat. 2922; Pub. L. 110-172, Sec. 6(d)(2), 11(a)(28), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 112-95, title XI, Sec. 1103(a)(2), Feb. 14, 2012, 126 Stat. 11.)
BACKGROUND NOTES
AMENDMENTS
2012 - Subsec. (e). Pub. L. 112-95, Sec. 1103(a)(2), amended subsec. (e) by inserting “(other than kerosene with respect to which tax is imposed under section 4043)” after “In the case of kerosene”.
2007 - Subsec. (a). Pub. L. 110-172, Sec. 6(d)(2)(B)(i), amended subsec. (a) by striking “(other than with respect to any sale for export under paragraph (3) thereof)” after “4081”.
Subsec. (b). Pub. L. 110-172, Sec. 11(a)(28), amended subsec. (b). Before amendment it read as follows:
“(b) Nontaxable Use—For purposes of this section, the term “nontaxable use” means—
“(1) any use which is exempt from the tax imposed by section 4041(a)(1) other than by reason of a prior imposition of tax,
“(2) any use in a train,
“(3) any use described in section 4041(a)(1)(C)(iii)(II),
“The term “nontaxable use” does not include the use of kerosene in an aircraft and such term shall include any use described in section 6421(e)(2)(C).”
Subsec. (e). Pub. L. 110-172, Sec. 6(d)(2)(C)(i)-(ii), amended subsec. (e) by striking “an aircraft, the rate of tax under section 4081(a)(2)(A)(iii) shall be zero.” and inserting “an aircraft—“ and the text of par. (1) and (2) and by moving the last sentence flush with the margin of such subsection (following par. (2) added by Sec. 6(d)(2)(C)(i)).
Subsec. (f)-(g). Pub. L. 110-172, Sec. 6(d)(2)(B)(ii), redesignated subsec. (f) and (g) as subsec. (g) and (h), respectively and added new subsec. (f).
2006 - Subsec. (d)(2)(B). Pub. L. 109-432, Sec. 420(b)(2), amended subpar. (B) by substituting “section 6427(l)(5)(B)” for “section 6427(l)(6)(B)”.
2005 - Subsec. (b). Pub. L. 109-59, Sec. 11161(a)(4)(A), amended subsec. (b) by striking “aviation-grade” before “kerosene”.
Subsec. (d)(2)(B). Pub. L. 109-59, Sec. 11161(b)(3)(C), amended subpar. (B) by substituting “section 6427(l)(6)(B)" for “section 6427(l)(5)(B)”.
Subsec. (e). Pub. L. 109-59, Sec. 11161(a)(4)(E), amended subsec. (e) by striking “aviation-grade” before “kerosene”; by substituting “section 4081(a)(2)(A)(iii)” for “section 4081(a)(2)(A)(iv)”; by adding the sentence at the end; and by substituting “Kerosene Removed Into an Aircraft” for “Aviation-grade Kerosene” in the heading.
Subsec. (a). Pub. L. 109-58, Sec. 1362(b), amended subsec. (a) by inserting “(other than such tax at the Leaking Underground Storage Tank Trust Fund financing rate imposed in all cases other than for export)” after “section 4081”.
2004 - Subsec. (a)(2). Pub. L. 108-357, Sec. 854(a), amended par. (2) by inserting “by mechanical injection” after “indelibly dyed”.
Subsec. (b). Pub. L. 108-357, Sec. 853(a)(5)(B)(i), amended subsec. (b) by adding the sentence at the end.
Subsec. (b). Pub. L. 108-357, Sec. 851(c)(2), amended subsec. (b) by insering “and such term shall not include any use described in section 6421(e)(2)(C)" before the period at the end.
Subsec. (b)(3). Pub. L. 108-357, Sec. 857(a), amended par. (3). Before amendment it read as follows:
“(3) any use described in section 6427(b)(1) (after the application of section 6427(b)(3))."end.revised>
Subsec. (d)(1)-(3). Pub. L. 108-357, Sec. 853(a)(5)(B)(ii) amended subsec. (d) by striking par. (1) and redesignating par. (2)-(3) as par. (1)-(2), respectively. Before being struck, par. (1) read as follows:
“(1) Aviation-grade kerosene. --
“Subsection (a)(2) shall not apply to aviation-grade kerosene (as determined under regulations prescribed by the Secretary) which the Secretary determines is destined for use as a fuel in an aircraft.”
Subsec. (f). Pub. L. 108-357, Sec. 241(a)(2)(B), amended subsec. (f) by substituting “subsections (a)(1) and (d)(3) of section 4041” for “section 4041(a)(1)”.
Subsec. (e)-(g). Pub. L. 108-357, Sec. 853(a)(5)(A), redesignated subsec. (e)-(f) as subsec. (f)-(g), respectively, and added subsec. (e).
1998—Subsec. (d)(1). Pub. L. 105-206, Sec. 6010(h)(3), amended par. (1). Prior to amendment it read as follows:
“(1) Aviation-grade kerosene.--
Subsection (a)(2) shall not apply to a removal, entry, or sale of aviation-grade kerosene (as determined under regulations prescribed by the Secretary) if the person receiving the kerosene is registered under section 4101 with respect to the tax imposed by section 4091.”
Subsec. (d)(3). Pub. L. 105-206, Sec. 6010(h)(4), amended par. (3) by substituting “kerosene received by” for “a removal, entry, or sale of kerosene to”.
1997--Sec. 4082. Pub. L. 105-34, Sec. 1032(e)(3), amended the heading of Sec. 4082 by inserting “and kerosene” after “diesel fuel”.
Subsec. (a). Pub. L. 105-34, Sec. 1032(c)(1), amended subsec. (a) by substituting “diesel fuel and kerosene” for “diesel fuel”.
Subsec. (c). Pub. L. 105-34, Sec. 1032(c)(1), amended subsec. (c) by substituting “diesel fuel and kerosene” for “diesel fuel”.
Subsec. (d). Pub. L. 105-34, Sec. 1032(c)(1), amended subsec. (d) by substituting “diesel fuel and kerosene” for “diesel fuel”.
Subsecs. (d)-(f). Pub. L. 105-34, Sec. 1032(c)(2), redesignated subsecs. (d) and (e) and subsec. (e) and (f), respectively, and added a new subsec. (d).
1996--Subsec. (c)-(e). Pub. L. 104-188 redesignated subsecs. (c) and (d) as subsecs. (d) and (e), respectively, and added a new subsec. (c).
1993—Sec. 4082. Pub. L. 103-66, Sec. 13242(a), amended Sec. 4082. Before amendment, it read as follows:
Sec. 4082. Definitions
“(a) Gasoline.—For purposes of this subpart, the term ‘gasoline’ includes, to the extent prescribed in regulations—
“(1) gasoline blend stocks, and
“(2) products commonly used as additives in gasoline.
“For purposes of paragraph (1), the term ‘gasoline blend stocks’ means any petroleum product component of gasoline.
“(b) Certain Uses Defined As Removal.—If a refiner, importer, terminal operator, blender, or compounder uses (other than in the production of gasoline or special fuels referred to in section 4041) gasoline refined, imported, blended, or compounded by him, such use shall for the purposes of this chapter be considered a removal.”
1986--Subsec. (a). Pub. L. 99-514 amended subsec. (a) generally, substituting definitions of “gasoline” and “gasoline blended stocks" for definition of “producer”.
Subsec. (b). Pub. L. 99-514 amended subsec. (b) generally, substituting provisions that certain use of gasoline be considered removal for provisions defining “gasoline”.
Subsecs. (c) to (e). Pub. L. 99-514, in amending section generally, struck out subsecs. (c) to (e) which defined “sales”, “wholesale distributor”, and “producer”, respectively.
1984--Subsec. (d). Pub. L. 98-369, 733(a), in amending subsec. (d) generally, redesignated existing provisions of par. (1) as subpar. (A) and added subpar. (B), and in par. (2) inserted “but only if such person” before “elects”.
Subsec. (e). Pub. L. 98-369, 734(c)(1), added subpar. (e).
1970--Subsec. (c). Pub. L. 91-258 substituted “special fuels referred to in section 4041” for “special motor fuels referred to in section 4041(b)”.
1965--Subsec. (b). Pub. L. 89-44, 802(a)(1), substituted “gasoline which are suitable for use as a motor fuel” for “gasoline (including casinghead and natural gasoline”.
Subsec. (d)(2). Pub. L. 89-44, 802(b)(1), struck out “and give a bond” after “elects to register”.
1959--Subsec. (a). Pub. L. 86-342, 201(e)(1), inserted reference to wholesale distributor.
Subsec. (d). Pub. L. 86-342, 201(e)(2), added subsec. (d).
EFFECTIVE DATE OF 2012 AMENDMENT
Amendment by Sec. 1103(a)(2) of Pub. L. 112-95 effective for fuel used after March 31, 2012.
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by Sec. 6(d)(2) of Pub. L. 110-172 effective as if included in the provisions of the Energy Policy Act of 2005 [Pub. L. 109-58, Sec. 1362] to which they relate, except that the amendment by Sec. 6(d)(2)(C)(ii) is effective as if included in SAFETEA-LU [Pub. L. 109-59, Sec. 11161] to which it relates.
Amendment by Sec. 11(a)(28) of Pub. L. 110-172 effective on the date of the enactment of this Act [Enacted: Dec. 29, 2007].
EFFECTIVE DATE OF 2006 AMENDMENT
Amendment by Sec. 420(b)(2) of Pub. L. 109-432 effective for kerosene sold after September 30, 2005.
EFFECTIVE DATE OF 2005 AMENDMENT
Amendments by Sec. 11161(a) and (b) of Pub. L. 109-59 effective for fuels or liquids removed, entered, or sold after September 30, 2005.
Amendment by Sec. 1362(b) of Pub. L. 109-58 effective for fuel entered, removed, or sold after September 30, 2005.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 241(a)(2) of Pub. L. 108-357 effective January 1, 2005.
Amendments by Sec. 301(c) of Pub. L. 108-357 effective for fuel sold or used after December 31, 2004.
Amendments by Sec. 851 of Pub. L. 108-357 effective for taxable years beginning after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendments by Sec. 853(a) of Pub. L. 108-357 effective for aviation-grade kerosene removed, entered or sold after December 31, 2004.
Amendments by Sec. 854(a) of Pub. L. 108-357 effective on the 180th day after the date on which the Secretary issues the regulations described in subsection (b). Pub. L. 108-357, Sec. 854(b) provided that:
“(b) DYE INJECTOR SECURITY- Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall issue regulations regarding mechanical dye injection systems described in the amendment made by subsection (a), and such regulations shall include standards for making such systems tamper resistant.”
Amendments by Sec. 857 of Pub. L. 108-357 effective for fuel sold after December 31, 2004.
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by Sec. 6010(h) of Pub. L. 105-206 effective as if included in the provisions of the Taxpayer Relief Act of 1997 to which they relate [Effective Date of Pub. L. 105-34, Sec. 1032: July 1, 1998].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendments by Sec. 1032 of Pub. L. 105-34 effective on July 1, 1998. Sec. 1032(g) of Pub. L. 105-34 provided that:
“(g) Floor Stock Taxes.--
(1) Imposition of tax.--In the case of kerosene which is held on July 1, 1998, by any person, there is hereby imposed a floor stocks tax of 24.4 cents per gallon.
(2) Liability for tax and method of payment.--
(A) Liability for tax.--A person holding kerosene on July 1, 1998, to which the tax imposed by paragraph (1) applies shall be liable for such tax.
(B) Method of payment.--The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe.
(C) Time for payment.--The tax imposed by paragraph (1) shall be paid on or before August 31, 1998.
(3) Definitions.--For purposes of this subsection--
(A) Held by a person.--Kerosene shall be considered as “held by a person” if title thereto has passed to such person (whether or not delivery to the person has been made).
(B) Secretary.--The term “Secretary" means the Secretary of the Treasury or his delegate.
(4) Exception for exempt uses.--The tax imposed by paragraph (1) shall not apply to kerosene held by any person exclusively for any use to the extent a credit or refund of the tax imposed by section 4081 of the Internal Revenue Code of 1986 is allowable for such use.
(5) Exception for fuel held in vehicle tank.--No tax shall be imposed by paragraph (1) on kerosene held in the tank of a motor vehicle or motorboat.
(6) Exception for certain amounts of fuel.--
(A) In general.--No tax shall be imposed by paragraph (1) on kerosene held on July 1, 1998, by any person if the aggregate amount of kerosene held by such person on such date does not exceed 2,000 gallons. The preceding sentence shall apply only if such person submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this paragraph.
(B) Exempt fuel.--For purposes of subparagraph (A), there shall not be taken into account fuel held by any person which is exempt from the tax imposed by paragraph (1) by reason of paragraph (4) or (5).
(C) Controlled groups.--For purposes of this paragraph--
(i) Corporations.--
(I) In general.--All persons treated as a controlled group shall be treated as 1 person.
(II) Controlled group.--The term “controlled group” has the meaning given to such term by subsection (a) of section 1563 of such Code; except that for such purposes the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in such subsection.
(ii) Nonincorporated persons under common control.--Under regulations prescribed by the Secretary, principles similar to the principles of clause (i) shall apply to a group of persons under common control where 1 or more of such persons is not a corporation.
(7) Coordination with section 4081.--No tax shall be imposed by paragraph (1) on kerosene to the extent that tax has been (or will be) imposed on such kerosene under section 4081 or 4091 of such Code.
(8) Other laws applicable.--All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4081 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply with respect to the floor stock taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by such section 4081.”
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-188, 1801, applicable with respect to fuel removed, entered, or sold on or after the first day of the first calendar quarter beginning after the date of the enactment of this Act [Enacted: August 20, 1996].
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Pub. L. 103-66, Sec. 13242(a), effective January 1, 1994.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to gasoline removed (as defined in section 4082 of this title as amended by section 1703 of Pub. L. 99-514) after Dec. 31, 1987, see section 1703(h) of Pub. L. 99-514, set out as a note under section 4081 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Section 733(b) of Pub. L. 98-369 provided that: “The amendment made by subsection (a) [amending this section] shall take effect on the first day of the first calendar quarter beginning after the date of the enactment of this Act [July 18, 1984].”
Section 734(c)(3) of Pub. L. 98-369 provided that: “The amendments made by this subsection [amending sections 4082 and 6427 of this title] shall take effect on the first day of the first calendar quarter beginning after the date of the enactment of this Act [July 18, 1984].”
EFFECTIVE DATE OF 1970 AMENDMENT
Amendment by Pub. L. 91-258 effective July 1, 1970, see section 211(a) of Pub. L. 91-258, set out as a note under section 4041 of this title.
EFFECTIVE DATE OF 1965 AMENDMENT
Section 802(d)(1) of Pub. L. 89-44 provided that: “The amendments made by subsections (a)(1), (b), and (c)[amending sections 4082, 4101, 4222, 7103, and 7232 of this title] shall apply with respect to articles sold on or after July 1, 1965.”
EFFECTIVE DATE OF 1959 AMENDMENT
Section 201(e)(3) of Pub. L. 86-342 provided that: “The amendments made by paragraphs (1) and (2) [amending this section] shall take effect on January 1, 1960.”