Publication 510 - Excise Taxes For 2005 - Department Of Treasury (Page 14 of 47) in pdf

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The terminal operator in its records treats

The seller has an unexpired notification

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It is made by bulk transfer and the enterer

certificate (discussed under Gasoline)

the receiving person as the person that

or the operator of the pipeline or vessel is

from the buyer.

removes the product across the terminal

not a registrant.

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rack for purposes of reporting the transac-

The seller has no reason to believe any

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It is not made by bulk transfer.

tion on Form 720-TO.

information on the certificate is false.

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The enterer is liable for the tax.

The transaction is subject to a written con-

The buyer of the diesel fuel or kerosene is liable

tract.

for the tax if the seller meets these conditions.

Removal from a terminal by unregistered po-

The buyer is jointly and severally liable if the

sition holder or unregistered pipeline or ves-

Terminal operator’s liability. The terminal

seller does not meet these conditions.

sel operator. The removal by bulk transfer of

operator is jointly and severally liable for the tax

Exception. The tax does not apply to a sale

diesel fuel or kerosene from a terminal is taxable

if the terminal operator provides any person with

if all of the following apply.

if the position holder for that fuel or the operator

any bill of lading, shipping paper, or similar doc-

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of the pipeline or vessel is not a registrant. The

ument indicating that diesel fuel or kerosene is

The buyer’s principal place of business is

position holder is liable for the tax. The terminal

not in the United States.

dyed (discussed later).

operator is jointly and severally liable for the tax

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The terminal operator is jointly and severally

The sale occurs as the fuel is delivered

if the position holder is a person other than the

liable for the tax if the position holder (including

into a transport vessel with a capacity of at

terminal operator. However, see Terminal

the receiving person in a two-party exchange) is

least 20,000 barrels of fuel.

operator’s liability under Removal from terminal,

a person other than the terminal operator and is

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earlier, for an exception.

The seller is a registrant and the exporter

not a registrant. However, a terminal operator

of record.

will not be liable for the tax in this situation if, at

Bulk transfers not received at approved ter-

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the time of the removal, the following conditions

The fuel was exported.

minal or refinery. The removal by bulk trans-

are met.

fer of diesel fuel or kerosene from a terminal or

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Removal or sale of blended diesel fuel or

refinery or the entry of diesel fuel or kerosene by

The terminal operator is a registrant.

kerosene. The removal or sale of blended die-

bulk transfer into the United States is taxable if

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The terminal operator has an unexpired

sel fuel or blended kerosene by the blender is

the following conditions apply.

notification certificate (discussed under

taxable. Blended taxable fuel produced using

Gasoline) from the position holder.

biodiesel is subject to the tax. See Blended

1. No tax was previously imposed (as dis-

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taxable fuel under Definitions, earlier.

cussed earlier) on any of the following

The terminal operator has no reason to

The blender is liable for the tax. The tax is

events.

believe any information on the certificate is

figured on the number of gallons not previously

false.

a. The removal from the refinery.

subject to the tax.

Persons who blend biodiesel with undyed

b. The entry into the United States.

Removal from refinery. The removal of die-

diesel fuel to produce a biodiesel mixture

sel fuel or kerosene from a refinery is taxable if

c. The removal from a terminal by an un-

outside the bulk transfer terminal system must

the removal meets either of the following condi-

pay must pay the diesel fuel tax on the volume of

registered position holder.

tions.

biodiesel in the mixture. Generally, the biodiesel

2. Upon removal from the pipeline or vessel,

mixture must be diesel fuel (defined earlier). See

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It is made by bulk transfer and the refiner,

Form 720 to report this tax. You also must be

the diesel fuel or kerosene is not received

the owner of the fuel immediately before

registered with the IRS as a blender. See Form

at an approved terminal or refinery (or at

the removal, or the operator of the pipeline

637.

another pipeline or vessel).

or vessel is not a registrant.

However, if an untaxed liquid is sold as taxed

The owner of the diesel fuel or kerosene

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taxable fuel and that untaxed liquid is used to

It is made at the refinery rack.

when it is removed from the pipeline or vessel is

produce blended taxable fuel, the person that

liable for the tax. However, an owner meeting all

The refiner is liable for the tax.

sold the untaxed liquid is jointly and severally

the following conditions at the time of the re-

liable for the tax imposed on the blender’s sale

Exception. The tax does not apply to a re-

moval will not be liable for the tax.

or removal of the blended taxable fuel.

moval of diesel fuel or kerosene at the refinery

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rack if all the following conditions are met.

The owner is a registrant.

Additional persons liable. When the person

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liable for the tax willfully fails to pay the tax, joint

The owner has an unexpired notification

1. The diesel fuel or kerosene is removed

and several liability for the tax is imposed on:

certificate (discussed under Gasoline)

from an approved refinery not served by

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from the operator of the terminal or refin-

Any officer, employee, or agent of the per-

pipeline (other than for receiving crude oil)

son who is under a duty to ensure the

ery where the diesel fuel or kerosene is

or vessel.

payment of the tax and who willfully fails to

received.

2. The diesel fuel or kerosene is received at a

perform that duty, or

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The owner has no reason to believe any

facility operated by a registrant and located

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Anyone who willfully causes the person to

information on the certificate is false.

within the bulk transfer/terminal system.

fail to pay the tax.

The operator of the facility where the diesel fuel

3. The removal from the refinery is by:

or kerosene is received is liable for the tax if the

Exemptions

owner meets these conditions. The operator is

a. Railcar and the same person operates

jointly and severally liable if the owner does not

the refinery and the facility at which the

The excise tax on diesel fuel or kerosene is not

meet these conditions.

diesel fuel or kerosene is received, or

imposed and the dyeing requirements do not

b. For diesel fuel only, a trailer or

have to be met if the rules related to the follow-

Sales to unregistered person. The sale of

ing exemptions are met.

semi-trailer used exclusively to trans-

diesel fuel or kerosene located within the bulk

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port the diesel fuel from a refinery (de-

transfer/terminal system to a person that is not a

Sale or use in certain areas of Alaska.

scribed in (1)) to a facility (described in

registrant is taxable if tax was not previously

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Kerosene used for feedstock purposes.

(2)) less than 20 miles from the refinery.

imposed under any of the events discussed ear-

lier.

Sale or use in certain areas of Alaska. The

The seller is liable for the tax. However, a

Entry into the United States. The entry of

excise tax is not imposed on the removal, entry,

seller meeting all the following conditions at the

diesel fuel or kerosene into the United States is

or sale of diesel fuel or kerosene in Alaska for

time of the sale will not be liable for the tax.

taxable if the entry meets either of the following

ultimate sale or use in an exempt area of Alaska.

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conditions.

The seller is a registrant.

The removal or entry of any diesel fuel or ker-

Page 14

Publication 510 - Excise Taxes For 2005 - Department Of Treasury Page 14

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