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Hand R Block Free File

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Hand R Block Free File

Hand r block free file 1. Hand r block free file   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Hand r block free file Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. Hand r block free file Reseller statement. Hand r block free file Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Hand r block free file Deep-draft ocean-going vessels. Hand r block free file Passenger vessels. Hand r block free file Ocean-going barges. Hand r block free file State or local governments. Hand r block free file Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel Definitions Excise taxes are imposed on all the following fuels. Hand r block free file Gasoline, including aviation gasoline and gasoline blendstocks. Hand r block free file Diesel fuel, including dyed diesel fuel. Hand r block free file Diesel-water fuel emulsion. Hand r block free file Kerosene, including dyed kerosene and kerosene used in aviation. Hand r block free file Other Fuels (including alternative fuels). Hand r block free file Compressed natural gas (CNG). Hand r block free file Fuels used in commercial transportation on inland waterways. Hand r block free file Any liquid used in a fractional ownership program aircraft as fuel. Hand r block free file The following terms are used throughout the discussion of fuel taxes. Hand r block free file Other terms are defined in the discussion of the specific fuels to which they pertain. Hand r block free file Agri-biodiesel. Hand r block free file   Agri-biodiesel means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats. Hand r block free file Approved terminal or refinery. Hand r block free file   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Hand r block free file Biodiesel. Hand r block free file   Biodiesel means the monoalkyl esters of long chain fatty acids derived from plant or animal matter that meet the registration requirements for fuels and fuel additives established by the Environmental Protection Agency (EPA) under section 211 of the Clean Air Act, and the requirements of the American Society of Testing Materials (ASTM) D6751. Hand r block free file Blended taxable fuel. Hand r block free file   This means any taxable fuel produced outside the bulk transfer/terminal system by mixing taxable fuel on which excise tax has been imposed and any other liquid on which excise tax has not been imposed. Hand r block free file This does not include a mixture removed or sold during the calendar quarter if all such mixtures removed or sold by the blender contain less than 400 gallons of a liquid on which the tax has not been imposed. Hand r block free file Blender. Hand r block free file   This is the person that produces blended taxable fuel. Hand r block free file Bulk transfer. Hand r block free file   This is the transfer of taxable fuel by pipeline or vessel. Hand r block free file Bulk transfer/terminal system. Hand r block free file   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Hand r block free file Fuel in the supply tank of any engine, or in any tank car, railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system. Hand r block free file Cellulosic biofuel. Hand r block free file   Cellulosic biofuel means any liquid fuel produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis that meets the registration requirements for fuels and fuel additives established by the EPA under section 211 of the Clean Air Act. Hand r block free file Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Hand r block free file For fuels sold or used after December 31, 2009, cellulosic biofuel does not include fuel of which more than 4% (determined by weight) is any combination of water and sediment, fuel of which the ash content is more than 1%, or fuel that has an acid number greater than 25. Hand r block free file Also see Second generation biofuel below. Hand r block free file Diesel-water fuel emulsion. Hand r block free file   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Hand r block free file The emulsion additive used to produce the fuel must be registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Hand r block free file Dry lease aircraft exchange. Hand r block free file   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Hand r block free file Enterer. Hand r block free file   This is the importer of record (under customs law) for the taxable fuel. Hand r block free file However, if the importer of record is acting as an agent, such as a customs broker, the person for whom the agent is acting is the enterer. Hand r block free file If there is no importer of record, the owner at the time of entry into the United States is the enterer. Hand r block free file Entry. Hand r block free file   Taxable fuel is entered into the United States when it is brought into the United States and applicable customs law requires that it be entered for consumption, use, or warehousing. Hand r block free file This does not apply to fuel brought into Puerto Rico (which is part of the U. Hand r block free file S. Hand r block free file customs territory), but does apply to fuel brought into the United States from Puerto Rico. Hand r block free file Fractional ownership aircraft program and fractional program aircraft. Hand r block free file   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Hand r block free file Measurement of taxable fuel. Hand r block free file   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Hand r block free file Other fuels. Hand r block free file   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Hand r block free file Pipeline operator. Hand r block free file   This is the person that operates a pipeline within the bulk transfer/terminal system. Hand r block free file Position holder. Hand r block free file   This is the person that holds the inventory position in the taxable fuel in the terminal, as reflected in the records of the terminal operator. Hand r block free file You hold the inventory position when you have a contractual agreement with the terminal operator for the use of the storage facilities and terminaling services for the taxable fuel. Hand r block free file A terminal operator that owns taxable fuel in its terminal is a position holder. Hand r block free file Rack. Hand r block free file   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Hand r block free file Refiner. Hand r block free file   This is any person that owns, operates, or otherwise controls a refinery. Hand r block free file Refinery. Hand r block free file   This is a facility used to produce taxable fuel and from which taxable fuel may be removed by pipeline, by vessel, or at a rack. Hand r block free file However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Hand r block free file For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Hand r block free file Registrant. Hand r block free file   This is a taxable fuel registrant (see Registration Requirements, later). Hand r block free file Removal. Hand r block free file   This is any physical transfer of taxable fuel. Hand r block free file It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Hand r block free file However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Hand r block free file Renewable diesel. Hand r block free file   See Renewable Diesel Credits in chapter 2. Hand r block free file Sale. Hand r block free file   For taxable fuel not in a terminal, this is the transfer of title to, or substantial incidents of ownership in, taxable fuel to the buyer for money, services, or other property. Hand r block free file For taxable fuel in a terminal, this is the transfer of the inventory position if the transferee becomes the position holder for that taxable fuel. Hand r block free file Second generation biofuel. Hand r block free file   This is any liquid fuel derived by, or from, qualified feedstocks, and meets the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (42 U. Hand r block free file S. Hand r block free file C. Hand r block free file 7545). Hand r block free file It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Hand r block free file It is not alcohol of less than 150 proof (disregard any added denaturants). Hand r block free file See Form 6478 for more information. Hand r block free file State. Hand r block free file   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Hand r block free file An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Hand r block free file Taxable fuel. Hand r block free file   This means gasoline, diesel fuel, and kerosene. Hand r block free file Terminal. Hand r block free file   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Hand r block free file It does not include a facility at which gasoline blendstocks are used in the manufacture of products other than finished gasoline if no gasoline is removed from the facility. Hand r block free file A terminal does not include any facility where finished gasoline, diesel fuel, or kerosene is stored if the facility is operated by a registrant and all such taxable fuel stored at the facility has been previously taxed upon removal from a refinery or terminal. Hand r block free file Terminal operator. Hand r block free file   This is any person that owns, operates, or otherwise controls a terminal. Hand r block free file Throughputter. Hand r block free file   This is any person that is a position holder or that owns taxable fuel within the bulk transfer/terminal system (other than in a terminal). Hand r block free file Vessel operator. Hand r block free file   This is the person that operates a vessel within the bulk transfer/terminal system. Hand r block free file However, vessel does not include a deep draft ocean-going vessel. Hand r block free file Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Hand r block free file A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Hand r block free file For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Hand r block free file The returns are due the last day of the month following the month in which the transaction occurs. Hand r block free file Generally, these returns can be filed on paper or electronically. Hand r block free file For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Hand r block free file Publication 3536 is only available on the IRS website. Hand r block free file Form 720-TO. Hand r block free file   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Hand r block free file Each terminal operator must file a separate form for each approved terminal. Hand r block free file Form 720-CS. Hand r block free file   This information return must be filed by bulk transport carriers (barges, vessels, and pipelines) who receive liquid product from an approved terminal or deliver liquid product to an approved terminal. Hand r block free file Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Hand r block free file See Form 637 for other persons who must register and for more information about registration. Hand r block free file Persons that are required to be registered. Hand r block free file   You are required to be registered if you are a: Blender; Enterer; Pipeline operator; Position holder; Refiner; Terminal operator; Vessel operator; Producer or importer of alcohol, biodiesel, agri-biodiesel, and renewable diesel; or Producer of cellulosic or second generation biofuel. Hand r block free file Persons that may register. Hand r block free file   You may, but are not required to, register if you are a: Feedstock user, Industrial user, Throughputter that is not a position holder, Ultimate vendor, Diesel-water fuel emulsion producer, Credit card issuer, or Alternative fuel claimant. Hand r block free file Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Hand r block free file However, they must be registered to file claims for certain sales and uses of fuel. Hand r block free file See Form 637 for more information. Hand r block free file Taxable fuel registrant. Hand r block free file   This is an enterer, an industrial user, a refiner, a terminal operator, or a throughputter who received a Letter of Registration under the excise tax registration provisions and whose registration has not been revoked or suspended. Hand r block free file The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Hand r block free file Additional information. Hand r block free file   See the Form 637 instructions for the information you must submit when you apply for registration. Hand r block free file Failure to register. Hand r block free file   The penalty for failure to register if you must register, unless due to reasonable cause, is $10,000 for the initial failure, and then $1,000 each day thereafter you fail to register. Hand r block free file Gasoline and Aviation Gasoline Gasoline. Hand r block free file   Gasoline means all products commonly or commercially known or sold as gasoline with an octane rating of 75 or more that are suitable for use as a motor fuel. Hand r block free file Gasoline includes any gasoline blend other than: Qualified ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from coal, including peat), Partially exempt ethanol and methanol fuel (at least 85 percent of the blend consists of alcohol produced from natural gas), or Denatured alcohol. Hand r block free file Gasoline also includes gasoline blendstocks, discussed later. Hand r block free file Aviation gasoline. Hand r block free file   This means all special grades of gasoline suitable for use in aviation reciprocating engines and covered by ASTM specification D910 or military specification MIL-G-5572. Hand r block free file Taxable Events The tax on gasoline is $. Hand r block free file 184 per gallon. Hand r block free file The tax on aviation gasoline is $. Hand r block free file 194 per gallon. Hand r block free file When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Hand r block free file 141 per gallon. Hand r block free file See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Hand r block free file Tax is imposed on the removal, entry, or sale of gasoline. Hand r block free file Each of these events is discussed later. Hand r block free file Also, see the special rules that apply to gasoline blendstocks, later. Hand r block free file If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Hand r block free file See Refunds of Second Tax in chapter 2. Hand r block free file Removal from terminal. Hand r block free file   All removals of gasoline at a terminal rack are taxable. Hand r block free file The position holder for that gasoline is liable for the tax. Hand r block free file Two-party exchanges. Hand r block free file   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Hand r block free file A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Hand r block free file The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Hand r block free file The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Hand r block free file The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Hand r block free file The transaction is subject to a written contract. Hand r block free file Terminal operator's liability. Hand r block free file   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Hand r block free file   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Hand r block free file The terminal operator is a registrant. Hand r block free file The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Hand r block free file The terminal operator has no reason to believe any information on the certificate is false. Hand r block free file Removal from refinery. Hand r block free file   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Hand r block free file It is made by bulk transfer and the refiner, the owner of the gasoline immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Hand r block free file It is made at the refinery rack. Hand r block free file The refiner is liable for the tax. Hand r block free file Exception. Hand r block free file   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Hand r block free file The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Hand r block free file The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Hand r block free file The removal from the refinery is by railcar. Hand r block free file The same person operates the refinery and the facility at which the gasoline is received. Hand r block free file Entry into the United States. Hand r block free file   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Hand r block free file It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Hand r block free file It is not made by bulk transfer. Hand r block free file The enterer is liable for the tax. Hand r block free file Importer of record's liability. Hand r block free file   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Hand r block free file   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Hand r block free file The importer of record has an unexpired notification certificate (discussed later) from the enterer. Hand r block free file The importer of record has no reason to believe any information in the certificate is false. Hand r block free file Customs bond. Hand r block free file   The customs bond will not be charged for the tax imposed on the entry of the gasoline if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Hand r block free file Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Hand r block free file   The removal by bulk transfer of gasoline from a terminal is taxable if the position holder for the gasoline or the operator of the pipeline or vessel is not a registrant. Hand r block free file The position holder is liable for the tax. Hand r block free file The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Hand r block free file However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Hand r block free file Bulk transfers not received at approved terminal or refinery. Hand r block free file   The removal by bulk transfer of gasoline from a terminal or refinery, or the entry of gasoline by bulk transfer into the United States, is taxable if the following conditions apply. Hand r block free file No tax was previously imposed (as discussed earlier) on any of the following events. Hand r block free file The removal from the refinery. Hand r block free file The entry into the United States. Hand r block free file The removal from a terminal by an unregistered position holder. Hand r block free file Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Hand r block free file   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Hand r block free file However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Hand r block free file The owner is a registrant. Hand r block free file The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Hand r block free file The owner has no reason to believe any information on the certificate is false. Hand r block free file The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Hand r block free file The operator is jointly and severally liable if the owner does not meet these conditions. Hand r block free file Sales to unregistered person. Hand r block free file   The sale of gasoline located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Hand r block free file   The seller is liable for the tax. Hand r block free file However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Hand r block free file   The seller is a registrant. Hand r block free file The seller has an unexpired notification certificate (discussed later) from the buyer. Hand r block free file The seller has no reason to believe any information on the certificate is false. Hand r block free file The buyer of the gasoline is liable for the tax if the seller meets these conditions. Hand r block free file The buyer is jointly and severally liable if the seller does not meet these conditions. Hand r block free file Exception. Hand r block free file   The tax does not apply to a sale if all of the following apply. Hand r block free file The buyer's principal place of business is not in the United States. Hand r block free file The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Hand r block free file The seller is a registrant and the exporter of record. Hand r block free file The fuel was exported. Hand r block free file Removal or sale of blended gasoline. Hand r block free file   The removal or sale of blended gasoline by the blender is taxable. Hand r block free file See Blended taxable fuel under Definitions, earlier. Hand r block free file   The blender is liable for the tax. Hand r block free file The tax is figured on the number of gallons not previously subject to the tax on gasoline. Hand r block free file   Persons who blend alcohol with gasoline to produce an alcohol fuel mixture outside the bulk transfer/terminal system must pay the gasoline tax on the volume of alcohol in the mixture. Hand r block free file See Form 720 to report this tax. Hand r block free file You also must be registered with the IRS as a blender. Hand r block free file See Form 637. Hand r block free file   However, if an untaxed liquid is sold as taxed taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Hand r block free file Notification certificate. Hand r block free file   The notification certificate is used to notify a person of the registration status of the registrant. Hand r block free file A copy of the registrant's letter of registration cannot be used as a notification certificate. Hand r block free file A model notification certificate is shown in the Appendix as Model Certificate C. Hand r block free file A notification certificate must contain all information necessary to complete the model. Hand r block free file   The certificate may be included as part of any business records normally used for a sale. Hand r block free file A certificate expires on the earlier of the date the registrant provides a new certificate, or the date the recipient of the certificate is notified that the registrant's registration has been revoked or suspended. Hand r block free file The registrant must provide a new certificate if any information on a certificate has changed. Hand r block free file Additional persons liable. Hand r block free file   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax is imposed on: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty, or Anyone who willfully causes the person to fail to pay the tax. Hand r block free file Gasoline Blendstocks Gasoline blendstocks may be subject to $. Hand r block free file 001 per gallon LUST tax as discussed below. Hand r block free file Gasoline includes gasoline blendstocks. Hand r block free file The previous discussions apply to these blendstocks. Hand r block free file However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Hand r block free file 001 per gallon or are not subject to the excise tax. Hand r block free file Blendstocks. Hand r block free file   Gasoline blendstocks are: 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 separated 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, and Toluene. Hand r block free file   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Hand r block free file Not used to produce finished gasoline. Hand r block free file   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Hand r block free file Removals and entries not connected to sale. Hand r block free file   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Hand r block free file Removals and entries connected to sale. Hand r block free file   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant, and at the time of the sale, meets the following requirements. Hand r block free file The person has an unexpired certificate (discussed later) from the buyer. Hand r block free file The person has no reason to believe any information in the certificate is false. Hand r block free file Sales after removal or entry. Hand r block free file   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Hand r block free file The seller is liable for the tax. Hand r block free file However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Hand r block free file The seller has an unexpired certificate (discussed next) from the buyer. Hand r block free file The seller has no reason to believe any information in the certificate is false. Hand r block free file Certificate of buyer. Hand r block free file   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Hand r block free file The certificate may be included as part of any business records normally used for a sale. Hand r block free file A model certificate is shown in the Appendix as Model Certificate D. Hand r block free file The certificate must contain all information necessary to complete the model. Hand r block free file   A certificate expires on the earliest of the following dates. Hand r block free file The date 1 year after the effective date (not earlier than the date signed) of the certificate. Hand r block free file The date a new certificate is provided to the seller. Hand r block free file The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Hand r block free file The buyer must provide a new certificate if any information on a certificate has changed. Hand r block free file   The IRS may withdraw the buyer's right to provide a certificate if that buyer uses the gasoline blendstocks in the production of finished gasoline or resells the blendstocks without getting a certificate from its buyer. Hand r block free file Received at approved terminal or refinery. Hand r block free file   The nonbulk removal or entry of gasoline blendstocks received at an approved terminal or refinery is not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) meets all the following requirements. Hand r block free file The person is a registrant. Hand r block free file The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Hand r block free file The person has no reason to believe any information on the certificate is false. Hand r block free file Bulk transfers to registered industrial user. Hand r block free file   The removal of gasoline blendstocks from a pipeline or vessel is not taxable (other than LUST) if the blendstocks are received by a registrant that is an industrial user. Hand r block free file An industrial user is any person that receives gasoline blendstocks by bulk transfer for its own use in the manufacture of any product other than finished gasoline. Hand r block free file Credits or Refunds. Hand r block free file   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Hand r block free file For more information, see chapter 2. Hand r block free file Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Hand r block free file However, special rules (discussed later) apply to dyed diesel fuel and dyed kerosene, and to undyed diesel fuel and undyed kerosene sold or used in Alaska for certain nontaxable uses and undyed kerosene used for a feedstock purpose. Hand r block free file Diesel fuel means: Any liquid that without further processing or blending is suitable for use as a fuel in a diesel-powered highway vehicle or train, and Transmix. Hand r block free file A liquid is suitable for this use if the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Hand r block free file A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Hand r block free file However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the propulsion engine of a diesel-powered highway vehicle or diesel-powered train. Hand r block free file Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Hand r block free file 5 and No. Hand r block free file 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Hand r block free file An excluded liquid is either of the following. Hand r block free file A liquid that contains less than 4% normal paraffins. Hand r block free file A liquid with all the following properties. Hand r block free file Distillation range of 125 degrees Fahrenheit or less. Hand r block free file Sulfur content of 10 ppm or less. Hand r block free file Minimum color of +27 Saybolt. Hand r block free file Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Hand r block free file Kerosene. Hand r block free file   This means any of the following liquids. Hand r block free file One of the two grades of kerosene (No. Hand r block free file 1-K and No. Hand r block free file 2-K) covered by ASTM specification D3699. Hand r block free file Kerosene-type jet fuel covered by ASTM specification D1655 or military specification MIL-DTL-5624T (Grade JP-5) or MIL-DTL-83133E (Grade JP-8). Hand r block free file See Kerosene for Use in Aviation, later. Hand r block free file   However, kerosene does not include excluded liquid, discussed earlier. Hand r block free file   Kerosene also includes any liquid that would be described above but for the presence of a dye of the type used to dye kerosene for a nontaxable use. Hand r block free file Diesel-powered highway vehicle. Hand r block free file   This is any self-propelled vehicle designed to carry a load over public highways (whether or not also designed to perform other functions) and propelled by a diesel-powered engine. Hand r block free file Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Hand r block free file For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Hand r block free file 2) in chapter 2. Hand r block free file Diesel-powered train. Hand r block free file   This is any diesel-powered equipment or machinery that rides on rails. Hand r block free file The term includes a locomotive, work train, switching engine, and track maintenance machine. Hand r block free file Taxable Events The tax on diesel fuel and kerosene is $. Hand r block free file 244 per gallon. Hand r block free file It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Hand r block free file Each of these events is discussed later. Hand r block free file Only the $. Hand r block free file 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Hand r block free file If the tax is paid on the diesel fuel or kerosene in more than one event, a refund may be allowed for the “second” tax paid. Hand r block free file See Refunds of Second Tax in chapter 2. Hand r block free file Use in certain intercity and local buses. Hand r block free file   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Hand r block free file A claim for $. Hand r block free file 17 per gallon may be made by the registered ultimate vendor (under certain conditions) or the ultimate purchaser for undyed diesel fuel or undyed kerosene sold for use in certain intercity or local buses. Hand r block free file An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Hand r block free file The bus must be engaged in one of the following activities. Hand r block free file Scheduled transportation along regular routes regardless of the size of the bus. Hand r block free file Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Hand r block free file A bus is available to the general public if the bus is available for hire to more than a limited number of persons, groups, or organizations. Hand r block free file Removal from terminal. Hand r block free file   All removals of diesel fuel and kerosene at a terminal rack are taxable. Hand r block free file The position holder for that fuel is liable for the tax. Hand r block free file Two-party exchanges. Hand r block free file   In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. Hand r block free file A two-party exchange means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following apply. Hand r block free file The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator. Hand r block free file The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Hand r block free file The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO. Hand r block free file The transaction is subject to a written contract. Hand r block free file Terminal operator's liability. Hand r block free file   The terminal operator is jointly and severally liable for the tax if the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that diesel fuel or kerosene is dyed (discussed later). Hand r block free file   The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator and is not a registrant. Hand r block free file However, a terminal operator will not be liable for the tax in this situation if, at the time of the removal, the following conditions are met. Hand r block free file The terminal operator is a registrant. Hand r block free file The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Hand r block free file The terminal operator has no reason to believe any information on the certificate is false. Hand r block free file Removal from refinery. Hand r block free file   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Hand r block free file It is made by bulk transfer and the refiner, the owner of the fuel immediately before the removal, or the operator of the pipeline or vessel is not a registrant. Hand r block free file It is made at the refinery rack. Hand r block free file The refiner is liable for the tax. Hand r block free file Exception. Hand r block free file   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Hand r block free file The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Hand r block free file The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Hand r block free file The removal from the refinery is by: Railcar and the same person operates the refinery and the facility at which the diesel fuel or kerosene is received, or For diesel fuel only, a trailer or semi-trailer used exclusively to transport the diesel fuel from a refinery (described in (1)) to a facility (described in (2)) less than 20 miles from the refinery. Hand r block free file Entry into the United States. Hand r block free file   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Hand r block free file It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Hand r block free file It is not made by bulk transfer. Hand r block free file The enterer is liable for the tax. Hand r block free file Importer of record's liability. Hand r block free file   The importer of record is jointly and severally liable for the tax with the enterer if the importer of record is not the enterer of the taxable fuel and the enterer is not a taxable fuel registrant. Hand r block free file   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Hand r block free file The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Hand r block free file The importer of record has no reason to believe any information in the certificate is false. Hand r block free file Customs bond. Hand r block free file   The customs bond will not be charged for the tax imposed on the entry of the diesel fuel or kerosene if at the time of entry the surety has an unexpired notification certificate from the enterer and has no reason to believe any information in the certificate is false. Hand r block free file Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Hand r block free file   The removal by bulk transfer of diesel fuel or kerosene from a terminal is taxable if the position holder for that fuel or the operator of the pipeline or vessel is not a registrant. Hand r block free file The position holder is liable for the tax. Hand r block free file The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Hand r block free file However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Hand r block free file Bulk transfers not received at approved terminal or refinery. Hand r block free file   The removal by bulk transfer of diesel fuel or kerosene from a terminal or refinery or the entry of diesel fuel or kerosene by bulk transfer into the United States is taxable if the following conditions apply. Hand r block free file No tax was previously imposed (as discussed earlier) on any of the following events. Hand r block free file The removal from the refinery. Hand r block free file The entry into the United States. Hand r block free file The removal from a terminal by an unregistered position holder. Hand r block free file Upon removal from the pipeline or vessel, the diesel fuel or kerosene is not received at an approved terminal or refinery (or at another pipeline or vessel). Hand r block free file   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Hand r block free file However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Hand r block free file The owner is a registrant. Hand r block free file The owner has an unexpired notification certificate (discussed under Gasoline) from the operator of the terminal or refinery where the diesel fuel or kerosene is received. Hand r block free file The owner has no reason to believe any information on the certificate is false. Hand r block free file The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Hand r block free file The operator is jointly and severally liable if the owner does not meet these conditions. Hand r block free file Sales to unregistered person. Hand r block free file   The sale of diesel fuel or kerosene located within the bulk transfer/terminal system to a person that is not a registrant is taxable if tax was not previously imposed under any of the events discussed earlier. Hand r block free file   The seller is liable for the tax. Hand r block free file However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Hand r block free file The seller is a registrant. Hand r block free file The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Hand r block free file The seller has no reason to believe any information on the certificate is false. Hand r block free file The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Hand r block free file The buyer is jointly and severally liable if the seller does not meet these conditions. Hand r block free file Exception. Hand r block free file   The tax does not apply to a sale if all of the following apply. Hand r block free file The buyer's principal place of business is not in the United States. Hand r block free file The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Hand r block free file The seller is a registrant and the exporter of record. Hand r block free file The fuel was exported. Hand r block free file Removal or sale of blended diesel fuel or kerosene. Hand r block free file   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Hand r block free file Blended taxable fuel produced using biodiesel is subject to the tax. Hand r block free file See Blended taxable fuel under Definitions, earlier. Hand r block free file   The blender is liable for the tax. Hand r block free file The tax is figured on the number of gallons not previously subject to the tax. Hand r block free file   Persons who blend biodiesel with undyed diesel fuel to produce and sell or use a biodiesel mixture outside the bulk transfer/terminal system must pay the diesel fuel tax on the volume of biodiesel in the mixture. Hand r block free file Generally, the biodiesel mixture must be diesel fuel (defined earlier). Hand r block free file See Form 720 to report this tax. Hand r block free file You also must be registered by the IRS as a blender. Hand r block free file See Form 637 for more information. Hand r block free file   However, if an untaxed liquid is sold as taxable fuel and that untaxed liquid is used to produce blended taxable fuel, the person that sold the untaxed liquid is jointly and severally liable for the tax imposed on the blender's sale or removal of the blended taxable fuel. Hand r block free file Additional persons liable. Hand r block free file   When the person liable for the tax willfully fails to pay the tax, joint and several liability for the tax applies to: Any officer, employee, or agent of the person who is under a duty to ensure the payment of the tax and who willfully fails to perform that duty; or Anyone who willfully causes the person to fail to pay the tax. Hand r block free file Credits or Refunds. Hand r block free file   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Hand r block free file For more information, see chapter 2. Hand r block free file Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Hand r block free file 001 per gallon LUST tax as discussed below, unless the fuel is for export. Hand r block free file The excise tax is not imposed on the removal, entry, or sale of diesel fuel or kerosene (other than the LUST tax) if all the following tests are met. Hand r block free file The person otherwise liable for tax (for example, the position holder) is a registrant. Hand r block free file In the case of a removal from a terminal, the terminal is an approved terminal. Hand r block free file The diesel fuel or kerosene satisfies the dyeing requirements (described next). Hand r block free file Dyeing requirements. Hand r block free file   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Hand r block free file It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Hand r block free file 9 pounds of the solid dye standard Solvent Red 26 per thousand barrels of fuel or any dye of a type and in a concentration that has been approved by the Commissioner. Hand r block free file Is indelibly dyed by mechanical injection. Hand r block free file See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Hand r block free file Notice required. Hand r block free file   A legible and conspicuous notice stating either: DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE or DYED KEROSENE, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE must be: Provided by the terminal operator to any person that receives dyed diesel fuel or dyed kerosene at a terminal rack of that operator, and Posted by a seller on any retail pump or other delivery facility where it sells dyed diesel fuel or dyed kerosene for use by its buyer. Hand r block free file   The notice under item (1) must be provided by the time of the removal and must appear on all shipping papers, bills of lading, and similar documents accompanying the removal of the fuel. Hand r block free file   Any seller that fails to post the required notice under item (2) is presumed to know that the fuel will be used for a taxable use (a use other than a nontaxable use listed later). Hand r block free file That seller is subject to the penalty described next. Hand r block free file Penalty. Hand r block free file   A penalty is imposed on a person if any of the following situations apply. Hand r block free file Any dyed fuel is sold or held for sale by the person for a use the person knows or has reason to know is not a nontaxable use of the fuel. Hand r block free file Any dyed fuel is held for use or used by the person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed. Hand r block free file The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Hand r block free file The person has knowledge that a dyed fuel that has been altered, as described in (3) above, sells or holds for sale such fuel for any use for which the person knows or has reason to know is not a nontaxable use of the fuel. Hand r block free file   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Hand r block free file After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Hand r block free file   This penalty is in addition to any tax imposed on the fuel. Hand r block free file   If the penalty is imposed, each officer, employee, or agent of a business entity who willfully participated in any act giving rise to the penalty is jointly and severally liable with that entity for the penalty. Hand r block free file   There is no administrative appeal or review allowed for the third and subsequent penalty imposed by section 6715 on any person except for: Fraud or a mistake in the chemical analysis, or Mathematical calculation of the penalty. Hand r block free file   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Hand r block free file However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Hand r block free file The penalty may apply if the fuel is held for sale or use for a taxable use while the back-up tax does not apply unless the fuel is delivered into a fuel supply tank. Hand r block free file Exception to penalty. Hand r block free file   The penalty under item (3) will not apply in any of the following situations. Hand r block free file Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Hand r block free file Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any other liquid (other than diesel fuel or kerosene) that contains the type and amount of dye required to meet the dyeing requirements. Hand r block free file The alteration or attempted alteration occurs in an exempt area of Alaska. Hand r block free file See Removal for sale or use in Alaska, later. Hand r block free file Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with diesel fuel or kerosene not meeting the dyeing requirements and the blending occurs as part of a nontaxable use (other than export), discussed later. Hand r block free file Alaska and Feedstocks Tax of $. Hand r block free file 001 per gallon is imposed on: Undyed diesel fuel or undyed kerosene sold or used in Alaska for certain nontaxable uses (see Later sales on page 10). Hand r block free file Undyed kerosene used for feedstock purposes. Hand r block free file Removal for sale or use in Alaska. Hand r block free file   No tax is imposed on the removal, entry, or sale of diesel fuel or kerosene in Alaska for ultimate sale or use in certain areas of Alaska for certain nontaxable uses. Hand r block free file The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Hand r block free file The person otherwise liable for the tax (position holder, refiner, or enterer): Is a registrant, Can show satisfactory evidence of the nontaxable nature of the transaction, and Has no reason to believe the evidence is false. Hand r block free file In the case of a removal from a terminal, the terminal is an approved terminal. Hand r block free file The owner of the fuel immediately after the removal or entry holds the fuel for its own use in a nontaxable use (discussed later) or is a qualified dealer. Hand r block free file   If all three of the requirements above are not met, then tax is imposed at $. Hand r block free file 244 per gallon. Hand r block free file   A qualified dealer is any person that holds a qualified dealer license from the state of Alaska or has been registered by the IRS as a qualified retailer. Hand r block free file Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Hand r block free file Later sales. Hand r block free file   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Hand r block free file The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Hand r block free file However, the sale is not taxable (other than the LUST tax at $. Hand r block free file 001 per gallon) if all the following requirements are met. Hand r block free file The fuel is sold in Alaska for certain nontaxable uses. Hand r block free file The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Hand r block free file The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Hand r block free file Feedstock purposes. Hand r block free file   The $. Hand r block free file 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Hand r block free file The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Hand r block free file In the case of a removal from a terminal, the terminal is an approved terminal. Hand r block free file Either: The person otherwise liable for tax uses the kerosene for a feedstock purpose, or The kerosene is sold for use by the buyer for a feedstock purpose and, at the time of the sale, the person otherwise liable for tax has an unexpired certificate (described later) from the buyer and has no reason to believe any information on the certificate is false. Hand r block free file   If all of the requirements above are not met, then tax is imposed at $. Hand r block free file 244 per gallon. Hand r block free file   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Hand r block free file For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Hand r block free file A feedstock user is a person that uses kerosene for a feedstock purpose. Hand r block free file A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Hand r block free file See Registration Requirements, earlier. Hand r block free file Later sales. Hand r block free file   The excise tax ($. Hand r block free file 244 per gallon) applies to kerosene sold for use by the buyer for a feedstock purpose (item (3)(b) above) if the buyer in that sale later sells the kerosene. Hand r block free file The tax is imposed at the time of the later sale and that seller is liable for the tax. Hand r block free file Certificate. Hand r block free file   The certificate from the buyer certifies the buyer is a registered feedstock user and the kerosene will be used by the buyer for a feedstock purpose. Hand r block free file The certificate may be included as part of any business records normally used for a sale. Hand r block free file A model certificate is shown in the Appendix as Model Certificate G. Hand r block free file Your certificate must contain all information necessary to complete the model. Hand r block free file   A certificate expires on the earliest of the following dates. Hand r block free file The date 1 year after the effective date (not earlier than the date signed) of the certificate. Hand r block free file The date the seller is provided a new certificate or notice that the current certificate is invalid. Hand r block free file The date the seller is notified the buyer's registration has been revoked or suspended. Hand r block free file   The buyer must provide a new certificate if any information on a certificate has changed. Hand r block free file Back-up Tax Tax is imposed on the delivery of any of the following into the fuel supply tank of a diesel-powered highway vehicle. Hand r block free file Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Hand r block free file Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Hand r block free file Any liquid other than gasoline, diesel fuel, or kerosene. Hand r block free file Generally, this back-up tax is imposed at a rate of $. Hand r block free file 244 per gallon. Hand r block free file Liability for tax. Hand r block free file   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Hand r block free file In addition, the seller of the diesel fuel or kerosene is jointly and severally liable for the tax if the seller knows or has reason to know that the fuel will be used for other than a nontaxable use. Hand r block free file Exemptions from the back-up tax. Hand r block free file   The back-up tax does not apply to a delivery of diesel fuel or kerosene for uses 1, 2, 6, 7, 12, 13, 14, and 15 listed under Definitions of Nontaxable Uses in chapter 2. Hand r block free file   In addition, since the back-up tax is imposed only on the delivery into the fuel supply tank of a diesel-powered vehicle or train, the tax does not apply to diesel fuel or kerosene used as heating oil or in stationary engines. Hand r block free file Diesel-Water Fuel Emulsion Diesel-water fuel emulsion means diesel fuel at least 14% of which is water and for which the emulsion additive is registered by a United States manufacturer with the EPA under section 211 of the Clean Air Act as in effect on March 31, 2003. Hand r block free file A reduced tax rate of $. Hand r block free file 198 per gallon is imposed on a diesel-water fuel emulsion. Hand r block free file To be eligible for the reduced rate, the person who sells, removes, or uses the diesel-water fuel emulsion must be registered by the IRS. Hand r block free file If the diesel-water fuel emulsion does not meet the requirements above, or if the person who sells, removes, or uses the fuel is not registered, the diesel-water fuel emulsion is taxed at $. Hand r block free file 244 per gallon. Hand r block free file Credits or refunds. Hand r block free file   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Hand r block free file Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Hand r block free file 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Hand r block free file For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Hand r block free file 219. Hand r block free file The rate of $. Hand r block free file 219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. Hand r block free file The airport terminal does not need to be a secured airport terminal for this rate to apply. Hand r block free file However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later. Hand r block free file For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Hand r block free file 044 per gallon. Hand r block free file For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Hand r block free file 044 rate applies only if the truck, tanker, or tank wagon is loaded at a terminal that is located in a secured area of the airport. Hand r block free file See Terminal located within a secured area of an airport, later. Hand r block free file In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Hand r block free file For kerosene removed directly into the fuel tank of an aircraft for a use exempt from tax under section 4041(c) (such as use in an aircraft for the exclusive use of a state or local government), the rate of tax is $. Hand r block free file 001. Hand r block free file There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Hand r block free file The kerosene must be removed from a qualifying refueler truck, tanker, or tank wagon loaded at a terminal located within a secured area of an airport. Hand r block free file See Terminal located within a secured area of an airport, later. Hand r block free file In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Hand r block free file The position holder is liable for the $. Hand r block free file 001 per gallon tax. Hand r block free file For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Hand r block free file 141 per gallon applies. Hand r block free file Certain refueler trucks, tankers, and tank wagons treated as terminals. Hand r block free file   For purposes of the tax imposed on kerosene for use in aviation removed directly into the fuel tank of an aircraft for use in commercial aviation, certain refueler trucks, tankers, and tank wagons are treated as part of a terminal if the following conditions are met. Hand r block free file Such terminal is located within an area of an airport. Hand r block free file Any kerosene for use in aviation that is loaded in a refueler truck, tanker, or tank wagon at a terminal is for delivery into aircraft at the airport in which the terminal is located. Hand r block free file Except in exigent circumstances, such as those identified in Notice 2005-80, no vehicle registered for highway use is loaded with kerosene for use in aviation at the terminal. Hand r block free file The refueler truck, tanker, or tank wagon meets the following requirements: Has storage tanks, hose, and coupling equipment designed and used for fueling aircraft, Is not registered for highway use, and Is operated by the terminal operator or a person that makes a daily accounting to the terminal operator of each delivery of fuel from the refueler truck, tanker, or tank wagon. Hand r block free file Information reporting will be required by terminal operators regarding this provision. Hand r block free file Until the format of this information reporting is issued, taxpayers are required to retain records regarding the daily accounting, but are not required to report such information. Hand r block free file Terminal located within a secured area of an airport. Hand r block free file   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Hand r block free file This list refers to fueling operations at airport terminals as it applies to the federal excise tax on kerosene for use in aviation, and has nothing to do with the general security of airports either included or not included in the list. Hand r block free file Liability For Tax If the kerosene is removed directly into the fuel tank of an aircraft for use in commercial aviation, the operator of the aircraft in commercial aviation is liable for the tax on the removal at the rate of $. Hand r block free file 044 per gallon. Hand r block free file However, the position holder is liable for the LUST tax for kerosene for use in aviation removed directly into the fuel tank of an aircraft for use exempt from tax under section 4041(c) (except foreign trade). Hand r block free file For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Hand r block free file For the aircraft operator to be liable for the tax $. Hand r block free file 044 rate, the position holder must meet the following requirements: Is a taxable fuel registrant, Has an unexpired certificate (a model certificate is shown in the Appendix as Model Certificate K) from the operator of the aircraft, and Has no reason to believe any of the information in the certificate is false. Hand r block free file Commercial aviation. Hand r block free file   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Hand r block free file However, commercial aviation does not include any of the following uses. Hand r block free file Any use exclusively for the purpose of skydiving. Hand r block free file Certain air transportation by seaplane. Hand r block free file See Seaplanes under Transportation of Persons by Air in chapter 4. Hand r block free file Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Hand r block free file For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Hand r block free file Any use of an aircraft that has a maximum certificated takeoff weight of 6,000 pounds or less, unless the aircraft is operated on an established line. Hand r block free file For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Hand r block free file Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Hand r block free file See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Hand r block free file Surtax on any liquid used in a fractional ownership program aircraft as fuel Fuel used in a fractional ownership program aircraft (as defined below) after March 31, 2012, is subject to a surtax of $. Hand r block free file 141 per gallon. Hand r block free file The fractional ownership program manager is liable for the tax. Hand r block free file The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Hand r block free file If the surtax is imposed, the following air transportation taxes do not apply. Hand r block free file Transportation of persons by air. Hand r block free file Transportation of property by air. Hand r block free file Use of international air travel facilities. Hand r block free file These taxes are described under Air Transportation Taxes, later. Hand r block free file A fractional ownership program aircraft flight is considered noncommercial aviation, for the rules for kerosene used in noncommercial aviation, see Kerosene for Use in Aviation above. Hand r block free file Fractional ownership aircraft program    is a program under which:  A single fractional ownership program manager provides fractional ownership program management services on behalf of the fractional owners; There are one or more fractional owners per fractional program aircraft, with at least one fractional program aircraft having more than one owner; For at least two fractional program aircraft, none of the ownership interests in the aircraft are less than the minimum fractional ownership interest or held by the program manager; There exists a dry-lease aircraft exchange arrangement among all of the fractional owners; and There are multi-year program agreements covering the fractional ownership, fractional ownership program management services, and dry-lease aircraft exchange aspects of the program. Hand r block free file Fractional program aircraft. Hand r block free file   Any aircraft that, in any fractional ownership aircraft program, is listed as a fractional program aircraft in the management specifications issued to the manager of such program by Federal Aviation Administration under subpart K of part 91 title 14, Code of Federal Regulations, and is registered in the U. Hand r block free file S. Hand r block free file   Fractional program aircraft are not considered used for transportation of a qualified fractional owner, or on account of such qualified fractional owner when they are used for flight demonstration, maintenance or crew training. Hand r block free file In such situations, the flight is not commercial aviation. Hand r block free file Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Hand r block free file Fractional owner. Hand r block free file   Any person owning any interest (including the entire interest) in a fractional program aircraft. Hand r block free file Dry lease aircraft exchange. Hand r block free file   An agreement, documented by the written program agreements, under which the fractional program aircraft are available, on an as-needed basis without crew, to each fractional owner. Hand r block free file Special rule relating to deadhead service. Hand r block free file   A fractional program aircraft will not be considered to be used on account of a qualified fractional owner when it is used in deadhead service and a person other than a qualified fractional owner is separately charged for such service. Hand r block free file More information. Hand r block free file   See section 4043 for more information on the surtax. Hand r block free file Certificate for Commercial Aviation and Exempt Uses A certificate is required from the aircraft operator: To support aircraft operator liability for tax on removal of kerosene for use in aviation directly into the fuel tank of an aircraft in commercial aviation, or For exempt uses. Hand r block free file Certificate. Hand r block free file   The certificate may be included as part of any business records normally used for a sale. Hand r block free file See Model Certificate K in the Appendix. Hand r block free file   A certificate expires on the earliest of the following dates. Hand r block free file The date 1 year after the effective date (not earlier than the date signed) of the certificate. Hand r block free file The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Hand r block free file The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Hand r block free file   The buyer must provide a new certificate if any information on a certificate has changed. Hand r block free file   The IRS may withdraw the buyer's right to provide a certificate if the buyer uses the kerosene for use in aviation to which a certificate relates other than as stated in the certificate. Hand r block free file Exempt use. Hand r block free file   The rate on kerosene for use in aviation is $. Hand r block free file 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Hand r block free file An exempt use includes kerosene for the exclusive use of a state or local government. Hand r block free file There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Hand r block free file Flash title transaction. Hand r block free file   A position holder is not liable for tax if, among other conditions, it obtains a certificate (described above) from the operator of the aircraft into which the kerosene is delivered. Hand r block free file In a “flash title transaction” the position holder sells the kerosene to a wholesale distributor (reseller) that in turn sells the kerosene to the aircraft operator as the kerosene is being removed from a terminal into the fuel tank of an aircraft. Hand r block free file In this case, the position holder will be treated as having a certificate from the operator of the aircraft if: The aircraft operator puts the reseller's name, address, and EIN on the certificate in place of the position holder's information; and The reseller provides the position holder with a statement of the kerosene reseller. Hand r block free file Reseller statement. Hand r block free file   This is a statement that is signed under penalties of perjury by a person with authority to bind the reseller; is provided at the bottom or on the back of the certificate (or in an attached document); and contains: The reseller's name, address, and EIN; The position holder's name, address, and EIN; and A statement that the reseller has no reason to believe that any information in the accompanying aircraft operator's certificate is false. Hand r block free file Credits or Refunds. Hand r block free file   A claim may be made by the ultimate purchaser (the operator) for taxed kerosene for use in aviation used in commercial aviation (other than foreign trade) and noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia). Hand r block free file A claim may be made by a registered ultimate vendor for certain sales. Hand r block free file For more information, see chapter 2. Hand r block free file Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Hand r block free file Other Fuels include alternative fuels. Hand r block free file Alternative fuels are: Liquefied petroleum gas (LPG), “P Series” fuels, Compressed natural gas (CNG) (discussed later), Liquefied hydrogen, Any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, Liquid fuel derived from biomass, Liquefied natural gas (LNG), and Liquefied gas derived from biomass. Hand r block free file Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Hand r block free file Qualified methanol and ethanol fuels. Hand r block free file   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Hand r block free file The tax rates are listed in the Instructions for Form 720. Hand r block free file Partially exempt methanol and ethanol fuels. Hand r block free file   A reduced tax rate applies to these fuels. Hand r block free file Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Hand r block free file The tax rates are listed in the Instructions for Form 720. Hand r block free file Motor vehicles. Hand r block free file   Motor vehicles include all types of vehicles, whether or not registered (or required to be registered) for highway use, that have both the following characteristics. Hand r block free file They are propelled by a motor. Hand r block free file They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t
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