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Tax Planning Us 2006 Taxes

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Tax Planning Us 2006 Taxes

Tax planning us 2006 taxes 35. Tax planning us 2006 taxes   Education Credits Table of Contents Introduction Useful Items - You may want to see: Who Can Claim an Education Credit Qualified Education ExpensesNo Double Benefit Allowed Adjustments to Qualified Education Expenses Introduction For 2013, there are two tax credits available to persons who pay expenses for higher (postsecondary) education. Tax planning us 2006 taxes They are: The American opportunity credit, and The lifetime learning credit. Tax planning us 2006 taxes The chapter will present an overview of these education credits. Tax planning us 2006 taxes To get the detailed information you will need to claim either of the credits, and for examples illustrating that information, see chapters 2 and 3 of Publication 970. Tax planning us 2006 taxes Can you claim more than one education credit this year?   For each student, you can choose for any year only one of the credits. Tax planning us 2006 taxes For example, if you choose to take the American opportunity credit for a child on your 2013 tax return, you cannot, for that same child, also claim the lifetime learning credit for 2013. Tax planning us 2006 taxes   If you are eligible to claim the American opportunity credit and you are also eligible to claim the lifetime learning credit for the same student in the same year, you can choose to claim either credit, but not both. Tax planning us 2006 taxes   If you pay qualified education expenses for more than one student in the same year, you can choose to take the American opportunity and the lifetime learning credits on a per-student, per-year basis. Tax planning us 2006 taxes This means that, for example, you can claim the American opportunity credit for one student and the lifetime learning credit for another student in the same year. Tax planning us 2006 taxes Table 35-1. Tax planning us 2006 taxes Comparison of Education Credits Caution. Tax planning us 2006 taxes You can claim both the American opportunity credit and the lifetime learning credit on the same return—but not for the same student. Tax planning us 2006 taxes   American Opportunity Credit Lifetime Learning Credit Maximum credit Up to $2,500 credit per eligible student Up to $2,000 credit per return Limit on modified adjusted gross income (MAGI) $180,000 if married filing jointly;  $90,000 if single, head of household, or qualifying widow(er) $127,000 if married filing jointly;  $63,000 if single, head of household, or qualifying widow(er) Refundable or nonrefundable 40% of credit may be refundable Credit limited to the amount of tax you must pay on your taxable income Number of years of postsecondary education Available ONLY if the student had not completed the first 4 years of postsecondary education before 2013 Available for all years of postsecondary education and for courses to acquire or improve job skills Number of tax years credit available Available ONLY for 4 tax years per eligible student (including any year(s) the Hope credit was claimed) Available for an unlimited number of years Type of program required Student must be pursuing a program leading to a degree or other recognized education credential Student does not need to be pursuing a program leading to a degree or other recognized education credential Number of courses Student must be enrolled at least half time for at least one academic period beginning during the tax year Available for one or more courses Felony drug conviction At the end of 2013, the student had not been convicted of a felony for possessing or distributing a controlled substance Felony drug convictions do not make the student ineligible Qualified expenses Tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance Tuition and fees required for enrollment or attendance (including amounts required to be paid to the institution for course-related books, supplies, and equipment) Payments for academic periods Payments made in 2013 for academic periods beginning in 2013 or beginning in the first 3 months of 2014 Differences between the American opportunity and lifetime learning credits. Tax planning us 2006 taxes   There are several differences between these two credits. Tax planning us 2006 taxes These differences are summarized in Table 35-1, later. Tax planning us 2006 taxes Useful Items - You may want to see: Publication 970 Tax Benefits for Education Form (and Instructions) 8863 Education Credits (American Opportunity and Lifetime Learning Credits) Who Can Claim an Education Credit You may be able to claim an education credit if you, your spouse, or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution. Tax planning us 2006 taxes The credits are based on the amount of qualified education expenses paid for the student in 2013 for academic periods beginning in 2013 and in the first 3 months of 2014. Tax planning us 2006 taxes For example, if you paid $1,500 in December 2013 for qualified tuition for the spring 2014 semester beginning in January 2014, you may be able to use that $1,500 in figuring your 2013 education credit(s). Tax planning us 2006 taxes Academic period. Tax planning us 2006 taxes   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. Tax planning us 2006 taxes In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. Tax planning us 2006 taxes Eligible educational institution. Tax planning us 2006 taxes   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. Tax planning us 2006 taxes S. Tax planning us 2006 taxes Department of Education. Tax planning us 2006 taxes It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. Tax planning us 2006 taxes The educational institution should be able to tell you if it is an eligible educational institution. Tax planning us 2006 taxes   Certain educational institutions located outside the United States also participate in the U. Tax planning us 2006 taxes S. Tax planning us 2006 taxes Department of Education's Federal Student Aid (FSA) programs. Tax planning us 2006 taxes Who can claim a dependent's expenses. Tax planning us 2006 taxes   If an exemption is allowed as a deduction for any person who claims the student as a dependent, all qualified education expenses of the student are treated as having been paid by that person. Tax planning us 2006 taxes Therefore, only that person can claim an education credit for the student. Tax planning us 2006 taxes If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit. Tax planning us 2006 taxes Expenses paid by a third party. Tax planning us 2006 taxes   Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Tax planning us 2006 taxes However, qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Tax planning us 2006 taxes Therefore, you are treated as having paid expenses that were paid by the third party. Tax planning us 2006 taxes For more information and an example see Who Can Claim a Dependent's Expenses in Pub. Tax planning us 2006 taxes 970, chapter 2 or 3. Tax planning us 2006 taxes Who cannot claim a credit. Tax planning us 2006 taxes   You cannot take an education credit if any of the following apply. Tax planning us 2006 taxes You are claimed as a dependent on another person's tax return, such as your parent's return. Tax planning us 2006 taxes Your filing status is married filing separately. Tax planning us 2006 taxes You (or your spouse) were a nonresident alien for any part of 2013 and did not elect to be treated as a resident alien for tax purposes. Tax planning us 2006 taxes Your MAGI is one of the following. Tax planning us 2006 taxes American opportunity credit: $180,000 or more if married filing jointly, or $90,000 or more if single, head of household, or qualifying widow(er). Tax planning us 2006 taxes Lifetime learning credit: $127,000 or more if married filing jointly, or $63,000 or more if single, head of household, or qualifying widow(er) . Tax planning us 2006 taxes   Generally, your MAGI is the amount on your Form 1040, line 38, or Form 1040A, line 22. Tax planning us 2006 taxes However, if you are filing Form 2555, Form 2555–EZ, or Form 4563, or are excluding income from Puerto RIco, add to the amount on your Form 1040, line 38, or Form 1040A, line 22, the amount of income you excluded. Tax planning us 2006 taxes For details, see Pub. Tax planning us 2006 taxes 970. Tax planning us 2006 taxes    Figure 35-A may be helpful in determining if you can claim an education credit on your tax return. Tax planning us 2006 taxes The American opportunity credit will always be greater than or equal to the lifetime learning credit for any student who is eligible for both credits. Tax planning us 2006 taxes However, if any of the conditions for the American opportunity credit, listed in Table 35-1 earlier, are not met for any student, you cannot take the American opportunity credit for that student. Tax planning us 2006 taxes You may be able to take the lifetime learning credit for part or all of that student's qualified education expenses instead. Tax planning us 2006 taxes See Pub. Tax planning us 2006 taxes 970 for information on other education benefits. Tax planning us 2006 taxes Qualified Education Expenses Generally, qualified education expenses are amounts paid in 2013 for tuition and fees required for the student's enrollment or attendance at an eligible educational institution. Tax planning us 2006 taxes It does not matter whether the expenses were paid in cash, by check, by credit or debit card, or with borrowed funds. Tax planning us 2006 taxes For course-related books, supplies, and equipment, only certain expenses qualify. Tax planning us 2006 taxes American opportunity credit: Qualified education expenses include amounts spent on books, supplies, and equipment needed for a course of study, whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. Tax planning us 2006 taxes Lifetime learning credit: Qualified education expenses include amounts for books, supplies, and equipment only if required to be paid to the institution as a condition of enrollment or attendance. Tax planning us 2006 taxes Qualified education expenses include nonacademic fees, such as student activity fees, athletic fees, or other expenses unrelated to the academic course of instruction, only if the fee must be paid to the institution as a condition of enrollment or attendance. Tax planning us 2006 taxes However, fees for personal expenses (described below) are never qualified education expenses. Tax planning us 2006 taxes Qualified education expenses for either credit do not include amounts paid for: Personal expenses. Tax planning us 2006 taxes This means room and board, insurance, medical expenses (including student health fees), transportation, and other similar personal, living, or family expenses. Tax planning us 2006 taxes Any course or other education involving sports, games, or hobbies, or any noncredit course, unless such course or other education is part of the student's degree program or (for the lifetime learning credit only) helps the student acquire or improve job skills. Tax planning us 2006 taxes You should receive Form 1098–T, Tuition Statement, from the institution reporting either payments received in 2013 (box 1) or amounts billed in 2013 (box 2). Tax planning us 2006 taxes However, the amount in box 1 or 2 of Form 1098–T may be different from the amount you paid (or are treated as having paid). Tax planning us 2006 taxes In completing Form 8863, use only the amounts you actually paid (plus any amounts you are treated as having paid) in 2013, reduced as necessary, as described in Adjustments to Qualified Education Expenses , later. Tax planning us 2006 taxes Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative) are treated as paid by the student. Tax planning us 2006 taxes Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return are treated as paid by you. Tax planning us 2006 taxes If you or the student takes a deduction for higher education expenses, such as on Schedule A or C (Form 1040), you cannot use those expenses in your qualified education expenses when figuring your education credits. Tax planning us 2006 taxes Qualified education expenses for any academic period must be reduced by any tax-free educational assistance allocable to that academic period. Tax planning us 2006 taxes See Adjustments to Qualified Education Expenses, later. Tax planning us 2006 taxes Prepaid Expenses. Tax planning us 2006 taxes   Qualified education expenses paid in 2013 for an academic period that begins in the first 3 months of 2014 can be used in figuring an education credit for 2013 only. Tax planning us 2006 taxes See Academic period , earlier. Tax planning us 2006 taxes For example, if you pay $2,000 in December 2013 for qualified tuition for the 2014 winter quarter that begins in January 2014, you can use that $2,000 in figuring an education credit for 2013 only (if you meet all the other requirements). Tax planning us 2006 taxes    You cannot use any amount you paid in 2012 or 2014 to figure the qualified education expenses you use to figure your 2013 education credit(s). Tax planning us 2006 taxes Paid with borrowed funds. Tax planning us 2006 taxes   You can claim an education credit for qualified education expenses paid with the proceeds of a loan. Tax planning us 2006 taxes Use the expenses to figure the credit for the year in which the expenses are paid, not the year in which the loan is repaid. Tax planning us 2006 taxes Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account. Tax planning us 2006 taxes Student withdraws from class(es). Tax planning us 2006 taxes   You can claim an education credit for qualified education expenses not refunded when a student withdraws. Tax planning us 2006 taxes No Double Benefit Allowed You cannot do any of the following. Tax planning us 2006 taxes Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim an education credit based on those same expenses. Tax planning us 2006 taxes Claim more than one education credit based on the same qualified education expenses. Tax planning us 2006 taxes Claim an education credit based on the same expenses used to figure the tax-free portion of a distribution from a Coverdell education savings account (ESA) or qualified tuition program (QTP). Tax planning us 2006 taxes Claim an education credit based on qualified education expenses paid with educational assistance, such as a tax-free scholarship, grant, or employer-provided educational assistance. Tax planning us 2006 taxes See Adjustments to Qualified Education Expenses, next. Tax planning us 2006 taxes Adjustments to Qualified Education Expenses For each student, reduce the qualified education expenses paid in 2013 by or on behalf of that student under the following rules. Tax planning us 2006 taxes The result is the amount of adjusted qualified education expenses for each student. Tax planning us 2006 taxes Tax-free educational assistance. Tax planning us 2006 taxes   For tax-free educational assistance received in 2013, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. Tax planning us 2006 taxes See Academic period , earlier. Tax planning us 2006 taxes      Tax-free educational assistance includes:    Tax-free parts of scholarships and fellowships (see chapter 12 of this publication and chapter 1 of Pub. Tax planning us 2006 taxes 970), The tax-free part of Pell grants (see chapter 1 of Pub. Tax planning us 2006 taxes 970), The tax-free part of employer-provided educational assistance (see Pub. Tax planning us 2006 taxes 970), Veterans' educational assistance (see chapter 1 of Pub. Tax planning us 2006 taxes 970), and Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. Tax planning us 2006 taxes Generally, any scholarship or fellowship is treated as tax-free educational assistance. Tax planning us 2006 taxes However, a scholarship or fellowship is not treated as tax-free educational assistance to the extent the student includes it in gross income (if the student is required to file a tax return) for the year the scholarship or fellowship is received and either: The scholarship or fellowship (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Tax planning us 2006 taxes 970, chapter 1; or The scholarship or fellowship (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses as defined in Qualified education expenses in Pub. Tax planning us 2006 taxes 970, chapter 1. Tax planning us 2006 taxes You may be able to increase the combined value of an education credit and certain educational assistance if the student includes some or all of the educational assistance in income in the year received. Tax planning us 2006 taxes For details, see Adjustments of Qualified Education Expenses, in chapters 2 and 3 of Pub. Tax planning us 2006 taxes 970. Tax planning us 2006 taxes Some tax-free educational assistance received after 2013 may be treated as a refund of qualified education expenses paid in 2013. Tax planning us 2006 taxes This tax-free educational assistance is any tax-free educational assistance received by you or anyone else after 2013 for qualified education expenses paid on behalf of a student in 2013 (or attributable to enrollment at an eligible educational institution during 2013). Tax planning us 2006 taxes If this tax-free educational assistance is received after 2013 but before you file your 2013 income tax return, see Refunds received after 2013 but before your income tax return is filed, later. Tax planning us 2006 taxes If this tax-free educational assistance is received after 2013 and after you file your 2013 income tax return, see Refunds received after 2013 and after your income tax return is filed, later. Tax planning us 2006 taxes Refunds. Tax planning us 2006 taxes   A refund of qualified education expenses may reduce qualified education expenses for the tax year or may require you to repay (recapture) the credit that you claimed in an earlier year. Tax planning us 2006 taxes Some tax-free educational assistance received after 2013 may be treated as a refund. Tax planning us 2006 taxes See Tax-free educational assistance, earlier. Tax planning us 2006 taxes Refunds received in 2013. Tax planning us 2006 taxes   For each student, figure the adjusted qualified education expenses for 2013 by adding all the qualified education expenses paid in 2013 and subtracting any refunds of those expenses received from the eligible educational institution during 2013. Tax planning us 2006 taxes Refunds received after 2013 but before your income tax return is filed. Tax planning us 2006 taxes   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received before you file your 2013 income tax return, reduce the amount of qualified education expenses for 2013 by the amount of the refund. Tax planning us 2006 taxes Refunds received after 2013 and after your income tax return is filed. Tax planning us 2006 taxes   If anyone receives a refund after 2013 of qualified education expenses paid on behalf of a student in 2013 and the refund is received after you file your 2013 income tax return, you may need to repay some or all of the credit that you claimed. Tax planning us 2006 taxes See Credit recapture, next. Tax planning us 2006 taxes Credit recapture. Tax planning us 2006 taxes    If any tax-free educational assistance for the qualified education expenses paid in 2013, or any refund of your qualified education expenses paid in 2013, is received after you file your 2013 income tax return, you must recapture (repay) any excess credit. Tax planning us 2006 taxes You do this by refiguring the amount of your adjusted qualified education expenses for 2013 by reducing the expenses by the amount of the refund or tax-free educational assistance. Tax planning us 2006 taxes You then refigure your education credit(s) for 2013 and figure the amount by which your 2013 tax liability would have increased if you had claimed the refigured credit(s). Tax planning us 2006 taxes Include that amount as an additional tax for the year the refund or tax-free assistance was received. Tax planning us 2006 taxes Example. Tax planning us 2006 taxes    You paid $8,000 tuition and fees in December 2013 for your child's Spring semester beginning in January 2014. Tax planning us 2006 taxes You filed your 2013 tax return on February 3, 2014, and claimed a lifetime learning credit of $1,600 ($8,000 qualified education expense paid x . Tax planning us 2006 taxes 20). Tax planning us 2006 taxes You claimed no other tax credits. Tax planning us 2006 taxes After you filed your return, your child withdrew from two courses and you received a refund of $1,400. Tax planning us 2006 taxes You must refigure your 2013 lifetime learning credit using $6,600 ($8,000 qualified education expenses − $1,400 refund). Tax planning us 2006 taxes The refigured credit is $1,320 and your tax liability increased by $280. Tax planning us 2006 taxes You must include the difference of $280 ($1,600 credit originally claimed − $1,320 refigured credit) as additional tax on your 2014 income tax return. Tax planning us 2006 taxes See the instructions for your 2014 income tax return to determine where to include this tax. Tax planning us 2006 taxes If you also pay qualified education expenses in 2014 for an academic period that begins in the first 3 months of 2014 and you receive tax-free educational assistance, or a refund, as described above, you may choose to reduce your qualified education expenses for 2014 instead of reducing your expenses for 2013. Tax planning us 2006 taxes Amounts that do not reduce qualified education expenses. Tax planning us 2006 taxes   Do not reduce qualified education expenses by amounts paid with funds the student receives as: Payment for services, such as wages, A loan, A gift, An inheritance, or A withdrawal from the student's personal savings. Tax planning us 2006 taxes   Do not reduce the qualified education expenses by any scholarship or fellowship reported as income on the student's tax return in the following situations. Tax planning us 2006 taxes The use of the money is restricted, by the terms of the scholarship or fellowship, to costs of attendance (such as room and board) other than qualified education expenses, as defined in Chapter 1 of Pub. Tax planning us 2006 taxes 970. Tax planning us 2006 taxes The use of the money is not restricted. Tax planning us 2006 taxes   For examples, see chapter 2 in Pub. Tax planning us 2006 taxes 970. Tax planning us 2006 taxes Figure 35-A. Tax planning us 2006 taxes Can You Claim an Education Credit for 2013? This image is too large to be displayed in the current screen. Tax planning us 2006 taxes Please click the link to view the image. Tax planning us 2006 taxes Figure 35-A. Tax planning us 2006 taxes Can You Claim an Education Credit for 2013? Prev  Up  Next   Home   More Online Publications
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The Tax Planning Us 2006 Taxes

Tax planning us 2006 taxes 1. Tax planning us 2006 taxes   Fuel Taxes Table of Contents Definitions Information Returns Registration RequirementsAdditional information. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Reseller statement. Tax planning us 2006 taxes Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Tax planning us 2006 taxes Deep-draft ocean-going vessels. Tax planning us 2006 taxes Passenger vessels. Tax planning us 2006 taxes Ocean-going barges. Tax planning us 2006 taxes State or local governments. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Gasoline, including aviation gasoline and gasoline blendstocks. Tax planning us 2006 taxes Diesel fuel, including dyed diesel fuel. Tax planning us 2006 taxes Diesel-water fuel emulsion. Tax planning us 2006 taxes Kerosene, including dyed kerosene and kerosene used in aviation. Tax planning us 2006 taxes Other Fuels (including alternative fuels). Tax planning us 2006 taxes Compressed natural gas (CNG). Tax planning us 2006 taxes Fuels used in commercial transportation on inland waterways. Tax planning us 2006 taxes Any liquid used in a fractional ownership program aircraft as fuel. Tax planning us 2006 taxes The following terms are used throughout the discussion of fuel taxes. Tax planning us 2006 taxes Other terms are defined in the discussion of the specific fuels to which they pertain. Tax planning us 2006 taxes Agri-biodiesel. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Approved terminal or refinery. Tax planning us 2006 taxes   This is a terminal operated by a registrant that is a terminal operator or a refinery operated by a registrant that is a refiner. Tax planning us 2006 taxes Biodiesel. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Blended taxable fuel. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Blender. Tax planning us 2006 taxes   This is the person that produces blended taxable fuel. Tax planning us 2006 taxes Bulk transfer. Tax planning us 2006 taxes   This is the transfer of taxable fuel by pipeline or vessel. Tax planning us 2006 taxes Bulk transfer/terminal system. Tax planning us 2006 taxes   This is the taxable fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Cellulosic biofuel. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Cellulosic biofuel does not include any alcohol with a proof of less than 150 (without regard to denaturants). Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Also see Second generation biofuel below. Tax planning us 2006 taxes Diesel-water fuel emulsion. Tax planning us 2006 taxes   A diesel-water fuel emulsion means an emulsion at least 14% of which is water. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Dry lease aircraft exchange. Tax planning us 2006 taxes   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Tax planning us 2006 taxes Enterer. Tax planning us 2006 taxes   This is the importer of record (under customs law) for the taxable fuel. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes If there is no importer of record, the owner at the time of entry into the United States is the enterer. Tax planning us 2006 taxes Entry. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes This does not apply to fuel brought into Puerto Rico (which is part of the U. Tax planning us 2006 taxes S. Tax planning us 2006 taxes customs territory), but does apply to fuel brought into the United States from Puerto Rico. Tax planning us 2006 taxes Fractional ownership aircraft program and fractional program aircraft. Tax planning us 2006 taxes   See later, under Surtax on any liquid used in a fractional ownership program aircraft as fuel. Tax planning us 2006 taxes Measurement of taxable fuel. Tax planning us 2006 taxes   Volumes of taxable fuel can be measured on the basis of actual volumetric gallons or gallons adjusted to 60 degrees Fahrenheit. Tax planning us 2006 taxes Other fuels. Tax planning us 2006 taxes   See Other Fuels (Including Alternative Fuels), later, and Alternative Fuel Credit and Alternative Fuel Mixture Credit in chapter 2. Tax planning us 2006 taxes Pipeline operator. Tax planning us 2006 taxes   This is the person that operates a pipeline within the bulk transfer/terminal system. Tax planning us 2006 taxes Position holder. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes A terminal operator that owns taxable fuel in its terminal is a position holder. Tax planning us 2006 taxes Rack. Tax planning us 2006 taxes   This is a mechanism capable of delivering fuel into a means of transport other than a pipeline or vessel. Tax planning us 2006 taxes Refiner. Tax planning us 2006 taxes   This is any person that owns, operates, or otherwise controls a refinery. Tax planning us 2006 taxes Refinery. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes However, this term does not include a facility where only blended fuel, and no other type of fuel, is produced. Tax planning us 2006 taxes For this purpose, blended fuel is any mixture that would be blended taxable fuel if produced outside the bulk transfer/terminal system. Tax planning us 2006 taxes Registrant. Tax planning us 2006 taxes   This is a taxable fuel registrant (see Registration Requirements, later). Tax planning us 2006 taxes Removal. Tax planning us 2006 taxes   This is any physical transfer of taxable fuel. Tax planning us 2006 taxes It also means any use of taxable fuel other than as a material in the production of taxable fuel or Other Fuels. Tax planning us 2006 taxes However, taxable fuel is not removed when it evaporates or is otherwise lost or destroyed. Tax planning us 2006 taxes Renewable diesel. Tax planning us 2006 taxes   See Renewable Diesel Credits in chapter 2. Tax planning us 2006 taxes Sale. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Second generation biofuel. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes S. Tax planning us 2006 taxes C. Tax planning us 2006 taxes 7545). Tax planning us 2006 taxes It also includes certain liquid fuel which is derived by, or from, any cultivated algae, cyanobacteria, or lemna. Tax planning us 2006 taxes It is not alcohol of less than 150 proof (disregard any added denaturants). Tax planning us 2006 taxes See Form 6478 for more information. Tax planning us 2006 taxes State. Tax planning us 2006 taxes   This includes any state, any of its political subdivisions, the District of Columbia, and the American Red Cross. Tax planning us 2006 taxes An Indian tribal government is treated as a state only if transactions involve the exercise of an essential tribal government function. Tax planning us 2006 taxes Taxable fuel. Tax planning us 2006 taxes   This means gasoline, diesel fuel, and kerosene. Tax planning us 2006 taxes Terminal. Tax planning us 2006 taxes   This is a storage and distribution facility supplied by pipeline or vessel, and from which taxable fuel may be removed at a rack. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Terminal operator. Tax planning us 2006 taxes   This is any person that owns, operates, or otherwise controls a terminal. Tax planning us 2006 taxes Throughputter. Tax planning us 2006 taxes   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). Tax planning us 2006 taxes Vessel operator. Tax planning us 2006 taxes   This is the person that operates a vessel within the bulk transfer/terminal system. Tax planning us 2006 taxes However, vessel does not include a deep draft ocean-going vessel. Tax planning us 2006 taxes Information Returns Form 720-TO and Form 720-CS are information returns used to report monthly receipts and disbursements of liquid products. Tax planning us 2006 taxes A liquid product is any liquid transported into storage at a terminal or delivered out of a terminal. Tax planning us 2006 taxes For a list of products, see the product code table in the Instructions for Forms 720-TO and 720-CS. Tax planning us 2006 taxes The returns are due the last day of the month following the month in which the transaction occurs. Tax planning us 2006 taxes Generally, these returns can be filed on paper or electronically. Tax planning us 2006 taxes For information on filing electronically, see Publication 3536, Motor Fuel Excise Tax EDI Guide. Tax planning us 2006 taxes Publication 3536 is only available on the IRS website. Tax planning us 2006 taxes Form 720-TO. Tax planning us 2006 taxes   This information return is used by terminal operators to report receipts and disbursements of all liquid products to and from all approved terminals. Tax planning us 2006 taxes Each terminal operator must file a separate form for each approved terminal. Tax planning us 2006 taxes Form 720-CS. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Registration Requirements The following discussion applies to excise tax registration requirements for activities relating to fuels only. Tax planning us 2006 taxes See Form 637 for other persons who must register and for more information about registration. Tax planning us 2006 taxes Persons that are required to be registered. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Persons that may register. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Ultimate vendors, credit card issuers, and alternative fuel claimants do not need to be registered to buy or sell fuel. Tax planning us 2006 taxes However, they must be registered to file claims for certain sales and uses of fuel. Tax planning us 2006 taxes See Form 637 for more information. Tax planning us 2006 taxes Taxable fuel registrant. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The term registrant as used in the discussions of these fuels means a taxable fuel registrant. Tax planning us 2006 taxes Additional information. Tax planning us 2006 taxes   See the Form 637 instructions for the information you must submit when you apply for registration. Tax planning us 2006 taxes Failure to register. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Gasoline and Aviation Gasoline Gasoline. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Gasoline also includes gasoline blendstocks, discussed later. Tax planning us 2006 taxes Aviation gasoline. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Taxable Events The tax on gasoline is $. Tax planning us 2006 taxes 184 per gallon. Tax planning us 2006 taxes The tax on aviation gasoline is $. Tax planning us 2006 taxes 194 per gallon. Tax planning us 2006 taxes When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $. Tax planning us 2006 taxes 141 per gallon. Tax planning us 2006 taxes See Surtax on any liquid used in a fractional ownership program aircraft as fuel, later. Tax planning us 2006 taxes Tax is imposed on the removal, entry, or sale of gasoline. Tax planning us 2006 taxes Each of these events is discussed later. Tax planning us 2006 taxes Also, see the special rules that apply to gasoline blendstocks, later. Tax planning us 2006 taxes If the tax is paid on the gasoline in more than one event, a refund may be allowed for the “second” tax paid. Tax planning us 2006 taxes See Refunds of Second Tax in chapter 2. Tax planning us 2006 taxes Removal from terminal. Tax planning us 2006 taxes   All removals of gasoline at a terminal rack are taxable. Tax planning us 2006 taxes The position holder for that gasoline is liable for the tax. Tax planning us 2006 taxes Two-party exchanges. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The exchange transaction occurs before or at the same time as removal across the rack by the receiving person. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The transaction is subject to a written contract. Tax planning us 2006 taxes Terminal operator's liability. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   However, a terminal operator meeting all the following conditions at the time of the removal will not be liable for the tax. Tax planning us 2006 taxes The terminal operator is a registrant. Tax planning us 2006 taxes The terminal operator has an unexpired notification certificate (discussed later) from the position holder. Tax planning us 2006 taxes The terminal operator has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes Removal from refinery. Tax planning us 2006 taxes   The removal of gasoline from a refinery is taxable if the removal meets either of the following conditions. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes It is made at the refinery rack. Tax planning us 2006 taxes The refiner is liable for the tax. Tax planning us 2006 taxes Exception. Tax planning us 2006 taxes   The tax does not apply to a removal of gasoline at the refinery rack if all the following requirements are met. Tax planning us 2006 taxes The gasoline is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Tax planning us 2006 taxes The gasoline is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Tax planning us 2006 taxes The removal from the refinery is by railcar. Tax planning us 2006 taxes The same person operates the refinery and the facility at which the gasoline is received. Tax planning us 2006 taxes Entry into the United States. Tax planning us 2006 taxes   The entry of gasoline into the United States is taxable if the entry meets either of the following conditions. Tax planning us 2006 taxes It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Tax planning us 2006 taxes It is not made by bulk transfer. Tax planning us 2006 taxes The enterer is liable for the tax. Tax planning us 2006 taxes Importer of record's liability. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Tax planning us 2006 taxes The importer of record has an unexpired notification certificate (discussed later) from the enterer. Tax planning us 2006 taxes The importer of record has no reason to believe any information in the certificate is false. Tax planning us 2006 taxes Customs bond. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The position holder is liable for the tax. Tax planning us 2006 taxes The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Tax planning us 2006 taxes However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Tax planning us 2006 taxes Bulk transfers not received at approved terminal or refinery. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes No tax was previously imposed (as discussed earlier) on any of the following events. Tax planning us 2006 taxes The removal from the refinery. Tax planning us 2006 taxes The entry into the United States. Tax planning us 2006 taxes The removal from a terminal by an unregistered position holder. Tax planning us 2006 taxes Upon removal from the pipeline or vessel, the gasoline is not received at an approved terminal or refinery (or at another pipeline or vessel). Tax planning us 2006 taxes   The owner of the gasoline when it is removed from the pipeline or vessel is liable for the tax. Tax planning us 2006 taxes However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Tax planning us 2006 taxes The owner is a registrant. Tax planning us 2006 taxes The owner has an unexpired notification certificate (discussed later) from the operator of the terminal or refinery where the gasoline is received. Tax planning us 2006 taxes The owner has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes The operator of the facility where the gasoline is received is liable for the tax if the owner meets these conditions. Tax planning us 2006 taxes The operator is jointly and severally liable if the owner does not meet these conditions. Tax planning us 2006 taxes Sales to unregistered person. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   The seller is liable for the tax. Tax planning us 2006 taxes However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Tax planning us 2006 taxes   The seller is a registrant. Tax planning us 2006 taxes The seller has an unexpired notification certificate (discussed later) from the buyer. Tax planning us 2006 taxes The seller has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes The buyer of the gasoline is liable for the tax if the seller meets these conditions. Tax planning us 2006 taxes The buyer is jointly and severally liable if the seller does not meet these conditions. Tax planning us 2006 taxes Exception. Tax planning us 2006 taxes   The tax does not apply to a sale if all of the following apply. Tax planning us 2006 taxes The buyer's principal place of business is not in the United States. Tax planning us 2006 taxes The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Tax planning us 2006 taxes The seller is a registrant and the exporter of record. Tax planning us 2006 taxes The fuel was exported. Tax planning us 2006 taxes Removal or sale of blended gasoline. Tax planning us 2006 taxes   The removal or sale of blended gasoline by the blender is taxable. Tax planning us 2006 taxes See Blended taxable fuel under Definitions, earlier. Tax planning us 2006 taxes   The blender is liable for the tax. Tax planning us 2006 taxes The tax is figured on the number of gallons not previously subject to the tax on gasoline. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes See Form 720 to report this tax. Tax planning us 2006 taxes You also must be registered with the IRS as a blender. Tax planning us 2006 taxes See Form 637. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Notification certificate. Tax planning us 2006 taxes   The notification certificate is used to notify a person of the registration status of the registrant. Tax planning us 2006 taxes A copy of the registrant's letter of registration cannot be used as a notification certificate. Tax planning us 2006 taxes A model notification certificate is shown in the Appendix as Model Certificate C. Tax planning us 2006 taxes A notification certificate must contain all information necessary to complete the model. Tax planning us 2006 taxes   The certificate may be included as part of any business records normally used for a sale. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The registrant must provide a new certificate if any information on a certificate has changed. Tax planning us 2006 taxes Additional persons liable. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Gasoline Blendstocks Gasoline blendstocks may be subject to $. Tax planning us 2006 taxes 001 per gallon LUST tax as discussed below. Tax planning us 2006 taxes Gasoline includes gasoline blendstocks. Tax planning us 2006 taxes The previous discussions apply to these blendstocks. Tax planning us 2006 taxes However, if certain conditions are met, the removal, entry, or sale of gasoline blendstocks are taxed at $. Tax planning us 2006 taxes 001 per gallon or are not subject to the excise tax. Tax planning us 2006 taxes Blendstocks. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   However, gasoline blendstocks do not include any product that cannot be used without further processing in the production of finished gasoline. Tax planning us 2006 taxes Not used to produce finished gasoline. Tax planning us 2006 taxes   Gasoline blendstocks not used to produce finished gasoline are not taxable (other than LUST) if the following conditions are met. Tax planning us 2006 taxes Removals and entries not connected to sale. Tax planning us 2006 taxes   Nonbulk removals and entries are not taxable if the person otherwise liable for the tax (position holder, refiner, or enterer) is a registrant. Tax planning us 2006 taxes Removals and entries connected to sale. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The person has an unexpired certificate (discussed later) from the buyer. Tax planning us 2006 taxes The person has no reason to believe any information in the certificate is false. Tax planning us 2006 taxes Sales after removal or entry. Tax planning us 2006 taxes   The sale of a gasoline blendstock that was not subject to tax on its nonbulk removal or entry, as discussed earlier, is taxable. Tax planning us 2006 taxes The seller is liable for the tax. Tax planning us 2006 taxes However, the sale is not taxable if, at the time of the sale, the seller meets the following requirements. Tax planning us 2006 taxes The seller has an unexpired certificate (discussed next) from the buyer. Tax planning us 2006 taxes The seller has no reason to believe any information in the certificate is false. Tax planning us 2006 taxes Certificate of buyer. Tax planning us 2006 taxes   The certificate from the buyer certifies the gasoline blendstocks will not be used to produce finished gasoline. Tax planning us 2006 taxes The certificate may be included as part of any business records normally used for a sale. Tax planning us 2006 taxes A model certificate is shown in the Appendix as Model Certificate D. Tax planning us 2006 taxes The certificate must contain all information necessary to complete the model. Tax planning us 2006 taxes   A certificate expires on the earliest of the following dates. Tax planning us 2006 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. Tax planning us 2006 taxes The date a new certificate is provided to the seller. Tax planning us 2006 taxes The date the seller is notified that the buyer's right to provide a certificate has been withdrawn. Tax planning us 2006 taxes The buyer must provide a new certificate if any information on a certificate has changed. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Received at approved terminal or refinery. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The person is a registrant. Tax planning us 2006 taxes The person has an unexpired notification certificate (discussed earlier) from the operator of the terminal or refinery where the gasoline blendstocks are received. Tax planning us 2006 taxes The person has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes Bulk transfers to registered industrial user. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Credits or Refunds. Tax planning us 2006 taxes   A credit or refund of the gasoline tax may be allowable if gasoline is used for a nontaxable purpose or exempt use. Tax planning us 2006 taxes For more information, see chapter 2. Tax planning us 2006 taxes Diesel Fuel and Kerosene Generally, diesel fuel and kerosene are taxed in the same manner as gasoline (discussed earlier). Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes A liquid may possess this practical and commercial fitness even though the specified use is not the predominant use of the liquid. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Diesel fuel does not include gasoline, kerosene, excluded liquid, No. Tax planning us 2006 taxes 5 and No. Tax planning us 2006 taxes 6 fuel oils covered by ASTM specification D396, or F-76 (Fuel Naval Distillate) covered by military specification MIL-F-16884. Tax planning us 2006 taxes An excluded liquid is either of the following. Tax planning us 2006 taxes A liquid that contains less than 4% normal paraffins. Tax planning us 2006 taxes A liquid with all the following properties. Tax planning us 2006 taxes Distillation range of 125 degrees Fahrenheit or less. Tax planning us 2006 taxes Sulfur content of 10 ppm or less. Tax planning us 2006 taxes Minimum color of +27 Saybolt. Tax planning us 2006 taxes Transmix means a by-product of refined products created by the mixing of different specification products during pipeline transportation. Tax planning us 2006 taxes Kerosene. Tax planning us 2006 taxes   This means any of the following liquids. Tax planning us 2006 taxes One of the two grades of kerosene (No. Tax planning us 2006 taxes 1-K and No. Tax planning us 2006 taxes 2-K) covered by ASTM specification D3699. Tax planning us 2006 taxes 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). Tax planning us 2006 taxes See Kerosene for Use in Aviation, later. Tax planning us 2006 taxes   However, kerosene does not include excluded liquid, discussed earlier. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Diesel-powered highway vehicle. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Specially designed mobile machinery for nontransportation functions and vehicles specially designed for off-highway transportation are generally not considered diesel-powered highway vehicles. Tax planning us 2006 taxes For more information about these vehicles and for information about vehicles not considered highway vehicles, see Off-Highway Business Use (No. Tax planning us 2006 taxes 2) in chapter 2. Tax planning us 2006 taxes Diesel-powered train. Tax planning us 2006 taxes   This is any diesel-powered equipment or machinery that rides on rails. Tax planning us 2006 taxes The term includes a locomotive, work train, switching engine, and track maintenance machine. Tax planning us 2006 taxes Taxable Events The tax on diesel fuel and kerosene is $. Tax planning us 2006 taxes 244 per gallon. Tax planning us 2006 taxes It is imposed on the removal, entry, or sale of diesel fuel and kerosene. Tax planning us 2006 taxes Each of these events is discussed later. Tax planning us 2006 taxes Only the $. Tax planning us 2006 taxes 001 LUST tax applies to dyed diesel fuel and dyed kerosene, discussed later. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes See Refunds of Second Tax in chapter 2. Tax planning us 2006 taxes Use in certain intercity and local buses. Tax planning us 2006 taxes   Dyed diesel fuel and dyed kerosene cannot be used in certain intercity and local buses. Tax planning us 2006 taxes A claim for $. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes An intercity or local bus is a bus engaged in furnishing (for compensation) passenger land transportation available to the general public. Tax planning us 2006 taxes The bus must be engaged in one of the following activities. Tax planning us 2006 taxes Scheduled transportation along regular routes regardless of the size of the bus. Tax planning us 2006 taxes Nonscheduled transportation if the seating capacity of the bus is at least 20 adults (not including the driver). Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Removal from terminal. Tax planning us 2006 taxes   All removals of diesel fuel and kerosene at a terminal rack are taxable. Tax planning us 2006 taxes The position holder for that fuel is liable for the tax. Tax planning us 2006 taxes Two-party exchanges. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The transaction is subject to a written contract. Tax planning us 2006 taxes Terminal operator's liability. Tax planning us 2006 taxes   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). Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The terminal operator is a registrant. Tax planning us 2006 taxes The terminal operator has an unexpired notification certificate (discussed under Gasoline) from the position holder. Tax planning us 2006 taxes The terminal operator has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes Removal from refinery. Tax planning us 2006 taxes   The removal of diesel fuel or kerosene from a refinery is taxable if the removal meets either of the following conditions. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes It is made at the refinery rack. Tax planning us 2006 taxes The refiner is liable for the tax. Tax planning us 2006 taxes Exception. Tax planning us 2006 taxes   The tax does not apply to a removal of diesel fuel or kerosene at the refinery rack if all the following conditions are met. Tax planning us 2006 taxes The diesel fuel or kerosene is removed from an approved refinery not served by pipeline (other than for receiving crude oil) or vessel. Tax planning us 2006 taxes The diesel fuel or kerosene is received at a facility operated by a registrant and located within the bulk transfer/terminal system. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Entry into the United States. Tax planning us 2006 taxes   The entry of diesel fuel or kerosene into the United States is taxable if the entry meets either of the following conditions. Tax planning us 2006 taxes It is made by bulk transfer and the enterer or the operator of the pipeline or vessel is not a registrant. Tax planning us 2006 taxes It is not made by bulk transfer. Tax planning us 2006 taxes The enterer is liable for the tax. Tax planning us 2006 taxes Importer of record's liability. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   However, an importer of record meeting both of the following conditions at the time of the entry will not be liable for the tax. Tax planning us 2006 taxes The importer of record has an unexpired notification certificate (discussed under Gasoline) from the enterer. Tax planning us 2006 taxes The importer of record has no reason to believe any information in the certificate is false. Tax planning us 2006 taxes Customs bond. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Removal from a terminal by unregistered position holder or unregistered pipeline or vessel operator. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The position holder is liable for the tax. Tax planning us 2006 taxes The terminal operator is jointly and severally liable for the tax if the position holder is a person other than the terminal operator. Tax planning us 2006 taxes However, see Terminal operator's liability under Removal from terminal, earlier, for an exception. Tax planning us 2006 taxes Bulk transfers not received at approved terminal or refinery. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes No tax was previously imposed (as discussed earlier) on any of the following events. Tax planning us 2006 taxes The removal from the refinery. Tax planning us 2006 taxes The entry into the United States. Tax planning us 2006 taxes The removal from a terminal by an unregistered position holder. Tax planning us 2006 taxes 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). Tax planning us 2006 taxes   The owner of the diesel fuel or kerosene when it is removed from the pipeline or vessel is liable for the tax. Tax planning us 2006 taxes However, an owner meeting all the following conditions at the time of the removal will not be liable for the tax. Tax planning us 2006 taxes The owner is a registrant. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The owner has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes The operator of the facility where the diesel fuel or kerosene is received is liable for the tax if the owner meets these conditions. Tax planning us 2006 taxes The operator is jointly and severally liable if the owner does not meet these conditions. Tax planning us 2006 taxes Sales to unregistered person. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   The seller is liable for the tax. Tax planning us 2006 taxes However, a seller meeting all the following conditions at the time of the sale will not be liable for the tax. Tax planning us 2006 taxes The seller is a registrant. Tax planning us 2006 taxes The seller has an unexpired notification certificate (discussed under Gasoline) from the buyer. Tax planning us 2006 taxes The seller has no reason to believe any information on the certificate is false. Tax planning us 2006 taxes The buyer of the diesel fuel or kerosene is liable for the tax if the seller meets these conditions. Tax planning us 2006 taxes The buyer is jointly and severally liable if the seller does not meet these conditions. Tax planning us 2006 taxes Exception. Tax planning us 2006 taxes   The tax does not apply to a sale if all of the following apply. Tax planning us 2006 taxes The buyer's principal place of business is not in the United States. Tax planning us 2006 taxes The sale occurs as the fuel is delivered into a transport vessel with a capacity of at least 20,000 barrels of fuel. Tax planning us 2006 taxes The seller is a registrant and the exporter of record. Tax planning us 2006 taxes The fuel was exported. Tax planning us 2006 taxes Removal or sale of blended diesel fuel or kerosene. Tax planning us 2006 taxes   The removal or sale of blended diesel fuel or blended kerosene by the blender is taxable. Tax planning us 2006 taxes Blended taxable fuel produced using biodiesel is subject to the tax. Tax planning us 2006 taxes See Blended taxable fuel under Definitions, earlier. Tax planning us 2006 taxes   The blender is liable for the tax. Tax planning us 2006 taxes The tax is figured on the number of gallons not previously subject to the tax. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Generally, the biodiesel mixture must be diesel fuel (defined earlier). Tax planning us 2006 taxes See Form 720 to report this tax. Tax planning us 2006 taxes You also must be registered by the IRS as a blender. Tax planning us 2006 taxes See Form 637 for more information. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Additional persons liable. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Credits or Refunds. Tax planning us 2006 taxes   A credit or refund is allowable for the tax on undyed diesel fuel or undyed kerosene used for a nontaxable use. Tax planning us 2006 taxes For more information, see chapter 2. Tax planning us 2006 taxes Dyed Diesel Fuel and Dyed Kerosene Dyed diesel fuel and dyed kerosene are subject to $. Tax planning us 2006 taxes 001 per gallon LUST tax as discussed below, unless the fuel is for export. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The person otherwise liable for tax (for example, the position holder) is a registrant. Tax planning us 2006 taxes In the case of a removal from a terminal, the terminal is an approved terminal. Tax planning us 2006 taxes The diesel fuel or kerosene satisfies the dyeing requirements (described next). Tax planning us 2006 taxes Dyeing requirements. Tax planning us 2006 taxes   Diesel fuel or kerosene satisfies the dyeing requirements only if it satisfies the following requirements. Tax planning us 2006 taxes It contains the dye Solvent Red 164 (and no other dye) at a concentration spectrally equivalent to at least 3. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Is indelibly dyed by mechanical injection. Tax planning us 2006 taxes See section 6 of Notice 2005-80 for transition rules that apply until final regulations are issued by the IRS. Tax planning us 2006 taxes Notice required. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   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). Tax planning us 2006 taxes That seller is subject to the penalty described next. Tax planning us 2006 taxes Penalty. Tax planning us 2006 taxes   A penalty is imposed on a person if any of the following situations apply. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye in dyed fuel. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes   The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. Tax planning us 2006 taxes After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. Tax planning us 2006 taxes   This penalty is in addition to any tax imposed on the fuel. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   If you are liable for the penalty, you may also be liable for the back-up tax, discussed later. Tax planning us 2006 taxes However, the penalty applies only to dyed diesel fuel and dyed kerosene, while the back-up tax may apply to other fuels. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Exception to penalty. Tax planning us 2006 taxes   The penalty under item (3) will not apply in any of the following situations. Tax planning us 2006 taxes Diesel fuel or kerosene meeting the dyeing requirements (described earlier) is blended with any undyed liquid and the resulting product meets the dyeing requirements. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The alteration or attempted alteration occurs in an exempt area of Alaska. Tax planning us 2006 taxes See Removal for sale or use in Alaska, later. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Alaska and Feedstocks Tax of $. Tax planning us 2006 taxes 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). Tax planning us 2006 taxes Undyed kerosene used for feedstock purposes. Tax planning us 2006 taxes Removal for sale or use in Alaska. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The removal or entry of any diesel fuel or kerosene is not taxed if all the following requirements are satisfied. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes In the case of a removal from a terminal, the terminal is an approved terminal. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes   If all three of the requirements above are not met, then tax is imposed at $. Tax planning us 2006 taxes 244 per gallon. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Satisfactory evidence may include copies of qualified dealer licenses or exemption certificates obtained for state tax purposes. Tax planning us 2006 taxes Later sales. Tax planning us 2006 taxes   The excise tax applies to diesel fuel or kerosene sold by a qualified dealer after the removal or entry. Tax planning us 2006 taxes The tax is imposed at the time of the sale and the qualified dealer is liable for the tax. Tax planning us 2006 taxes However, the sale is not taxable (other than the LUST tax at $. Tax planning us 2006 taxes 001 per gallon) if all the following requirements are met. Tax planning us 2006 taxes The fuel is sold in Alaska for certain nontaxable uses. Tax planning us 2006 taxes The buyer buys the fuel for its own use in a nontaxable use or is a qualified dealer. Tax planning us 2006 taxes The seller can show satisfactory evidence of the nontaxable nature of the transaction and has no reason to believe the evidence is false. Tax planning us 2006 taxes Feedstock purposes. Tax planning us 2006 taxes   The $. Tax planning us 2006 taxes 001 per gallon LUST tax is imposed on the removal or entry of undyed kerosene if all the following conditions are met. Tax planning us 2006 taxes The person otherwise liable for tax (position holder, refiner, or enterer) is a registrant. Tax planning us 2006 taxes In the case of a removal from a terminal, the terminal is an approved terminal. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes   If all of the requirements above are not met, then tax is imposed at $. Tax planning us 2006 taxes 244 per gallon. Tax planning us 2006 taxes   Kerosene is used for a feedstock purpose when it is used for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or Other Fuels. Tax planning us 2006 taxes For example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint, but is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced. Tax planning us 2006 taxes A feedstock user is a person that uses kerosene for a feedstock purpose. Tax planning us 2006 taxes A registered feedstock user is a person that has been registered by the IRS as a feedstock user. Tax planning us 2006 taxes See Registration Requirements, earlier. Tax planning us 2006 taxes Later sales. Tax planning us 2006 taxes   The excise tax ($. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The tax is imposed at the time of the later sale and that seller is liable for the tax. Tax planning us 2006 taxes Certificate. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes The certificate may be included as part of any business records normally used for a sale. Tax planning us 2006 taxes A model certificate is shown in the Appendix as Model Certificate G. Tax planning us 2006 taxes Your certificate must contain all information necessary to complete the model. Tax planning us 2006 taxes   A certificate expires on the earliest of the following dates. Tax planning us 2006 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. Tax planning us 2006 taxes The date the seller is provided a new certificate or notice that the current certificate is invalid. Tax planning us 2006 taxes The date the seller is notified the buyer's registration has been revoked or suspended. Tax planning us 2006 taxes   The buyer must provide a new certificate if any information on a certificate has changed. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Any dyed diesel fuel or dyed kerosene for other than a nontaxable use. Tax planning us 2006 taxes Any undyed diesel fuel or undyed kerosene on which a credit or refund (for fuel used for a nontaxable purpose) has been allowed. Tax planning us 2006 taxes Any liquid other than gasoline, diesel fuel, or kerosene. Tax planning us 2006 taxes Generally, this back-up tax is imposed at a rate of $. Tax planning us 2006 taxes 244 per gallon. Tax planning us 2006 taxes Liability for tax. Tax planning us 2006 taxes   Generally, the operator of the vehicle into which the fuel is delivered is liable for the tax. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Exemptions from the back-up tax. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes A reduced tax rate of $. Tax planning us 2006 taxes 198 per gallon is imposed on a diesel-water fuel emulsion. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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 $. Tax planning us 2006 taxes 244 per gallon. Tax planning us 2006 taxes Credits or refunds. Tax planning us 2006 taxes   The allowance for a credit or refund on a diesel-water fuel emulsion is discussed in chapter 2. Tax planning us 2006 taxes Kerosene for Use in Aviation Taxable Events Generally, kerosene is taxed at $. Tax planning us 2006 taxes 244 per gallon unless a reduced rate applies (see Diesel Fuel and Kerosene, earlier). Tax planning us 2006 taxes For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in noncommercial aviation, the tax rate is $. Tax planning us 2006 taxes 219. Tax planning us 2006 taxes The rate of $. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes The airport terminal does not need to be a secured airport terminal for this rate to apply. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes For kerosene removed directly into the fuel tank of an aircraft for use in commercial aviation, the rate of tax is $. Tax planning us 2006 taxes 044 per gallon. Tax planning us 2006 taxes For kerosene removed into an aircraft from a qualified refueler truck, tanker, or tank wagon, the $. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes See Terminal located within a secured area of an airport, later. Tax planning us 2006 taxes In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Tax planning us 2006 taxes 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 $. Tax planning us 2006 taxes 001. Tax planning us 2006 taxes There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes See Terminal located within a secured area of an airport, later. Tax planning us 2006 taxes In addition, the operator must provide the position holder with a certificate similar to Model Certificate K in the Appendix. Tax planning us 2006 taxes The position holder is liable for the $. Tax planning us 2006 taxes 001 per gallon tax. Tax planning us 2006 taxes For kerosene removed directly from a terminal into the fuel tank of an fractional ownership program aircraft after March 31, 2012, a surtax of $. Tax planning us 2006 taxes 141 per gallon applies. Tax planning us 2006 taxes Certain refueler trucks, tankers, and tank wagons treated as terminals. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Such terminal is located within an area of an airport. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Information reporting will be required by terminal operators regarding this provision. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Terminal located within a secured area of an airport. Tax planning us 2006 taxes   See Notice 2005-4 and Notice 2005-80 for the list of terminals located within a secured area of an airport. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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 $. Tax planning us 2006 taxes 044 per gallon. Tax planning us 2006 taxes 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). Tax planning us 2006 taxes For example, for kerosene removed directly into the aircraft for use in military aircraft, the position holder is liable for the tax. Tax planning us 2006 taxes For the aircraft operator to be liable for the tax $. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Commercial aviation. Tax planning us 2006 taxes   Commercial aviation is any use of an aircraft in the business of transporting persons or property by air for pay. Tax planning us 2006 taxes However, commercial aviation does not include any of the following uses. Tax planning us 2006 taxes Any use exclusively for the purpose of skydiving. Tax planning us 2006 taxes Certain air transportation by seaplane. Tax planning us 2006 taxes See Seaplanes under Transportation of Persons by Air in chapter 4. Tax planning us 2006 taxes Any use of an aircraft owned or leased by a member of an affiliated group and unavailable for hire by nonmembers. Tax planning us 2006 taxes For more information, see Aircraft used by affiliated corporations under Special Rules on Transportation Taxes in chapter 4. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes For more information, see Small aircraft under Special Rules on Transportation Taxes in chapter 4. Tax planning us 2006 taxes Any use where the surtax on fuel used in a fractional ownership program aircraft is imposed. Tax planning us 2006 taxes See Surtax on any liquid used in a fractional ownership program aircraft as fuel below. Tax planning us 2006 taxes 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 $. Tax planning us 2006 taxes 141 per gallon. Tax planning us 2006 taxes The fractional ownership program manager is liable for the tax. Tax planning us 2006 taxes The surtax applies in addition to any other taxes imposed on the removal, entry, use, or sale of the fuel. Tax planning us 2006 taxes If the surtax is imposed, the following air transportation taxes do not apply. Tax planning us 2006 taxes Transportation of persons by air. Tax planning us 2006 taxes Transportation of property by air. Tax planning us 2006 taxes Use of international air travel facilities. Tax planning us 2006 taxes These taxes are described under Air Transportation Taxes, later. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Fractional program aircraft. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes S. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes In such situations, the flight is not commercial aviation. Tax planning us 2006 taxes Instead, the tax on the fuel used in the flight is imposed at the non-commercial aviation rate. Tax planning us 2006 taxes Fractional owner. Tax planning us 2006 taxes   Any person owning any interest (including the entire interest) in a fractional program aircraft. Tax planning us 2006 taxes Dry lease aircraft exchange. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Special rule relating to deadhead service. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes More information. Tax planning us 2006 taxes   See section 4043 for more information on the surtax. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Certificate. Tax planning us 2006 taxes   The certificate may be included as part of any business records normally used for a sale. Tax planning us 2006 taxes See Model Certificate K in the Appendix. Tax planning us 2006 taxes   A certificate expires on the earliest of the following dates. Tax planning us 2006 taxes The date 1 year after the effective date (not earlier than the date signed) of the certificate. Tax planning us 2006 taxes The date the buyer provides the seller a new certificate or notice that the current certificate is invalid. Tax planning us 2006 taxes The date the IRS or the buyer notifies the seller that the buyer's right to provide a certificate has been withdrawn. Tax planning us 2006 taxes   The buyer must provide a new certificate if any information on a certificate has changed. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Exempt use. Tax planning us 2006 taxes   The rate on kerosene for use in aviation is $. Tax planning us 2006 taxes 001 (LUST tax) if it is removed from any refinery or terminal directly into the fuel tank of an aircraft for an exempt use. Tax planning us 2006 taxes An exempt use includes kerosene for the exclusive use of a state or local government. Tax planning us 2006 taxes There is no tax on kerosene removed directly into the fuel tank of an aircraft for use in foreign trade. Tax planning us 2006 taxes Flash title transaction. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Reseller statement. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes Credits or Refunds. Tax planning us 2006 taxes   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). Tax planning us 2006 taxes A claim may be made by a registered ultimate vendor for certain sales. Tax planning us 2006 taxes For more information, see chapter 2. Tax planning us 2006 taxes Other Fuels (Including Alternative Fuels) Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under section 4081. Tax planning us 2006 taxes Other Fuels include alternative fuels. Tax planning us 2006 taxes 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. Tax planning us 2006 taxes Liquefied petroleum gas includes propane, butane, pentane, or mixtures of those products. Tax planning us 2006 taxes Qualified methanol and ethanol fuels. Tax planning us 2006 taxes   Qualified ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from coal, including peat. Tax planning us 2006 taxes The tax rates are listed in the Instructions for Form 720. Tax planning us 2006 taxes Partially exempt methanol and ethanol fuels. Tax planning us 2006 taxes   A reduced tax rate applies to these fuels. Tax planning us 2006 taxes Partially exempt ethanol and methanol means any liquid at least 85 percent of which consists of alcohol produced from natural gas. Tax planning us 2006 taxes The tax rates are listed in the Instructions for Form 720. Tax planning us 2006 taxes Motor vehicles. Tax planning us 2006 taxes   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. Tax planning us 2006 taxes They are propelled by a motor. Tax planning us 2006 taxes They are designed for carrying or towing loads from one place to another, regardless of the type of material or load carried or t