[Code of Federal Regulations]
[Title 26, Volume 16]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR48.4081-2]

[Page 110-111]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 48_MANUFACTURERS AND RETAILERS EXCISE TAXES--Table of Contents
 
 Subpart H_Motor Vehicles, Tires, Tubes, Tread Rubber, and Taxable Fuel
 
Sec. 48.4081-2  Taxable fuel; tax on removal at a terminal rack.

    (a) Overview. This section provides the general rule that all 
removals of taxable fuel at a terminal rack are subject to tax and the 
position holder with respect to the fuel is liable for the tax.
    (b) Imposition of tax. Tax is imposed on the removal of taxable fuel 
from a terminal if the taxable fuel is removed at the rack.
    (c) Liability for tax--(1) In general. The position holder with 
respect to the taxable fuel is liable for the tax imposed under 
paragraph (b) of this section.
    (2) Joint and several liability of terminal operator; unregistered 
position holder--(i) In general. The terminal operator is jointly and 
severally liable for the tax imposed under paragraph (b) of this section 
if--
    (A) The position holder with respect to the taxable fuel is a person 
other than the terminal operator and is not a taxable fuel registrant; 
and
    (B) The terminal operator has not met the conditions of paragraph 
(c)(2)(ii) of this section.
    (ii) Conditions for avoidance of liability. A terminal operator is 
not liable for tax under this paragraph (c)(2) if, at the time of the 
removal, the terminal operator--

[[Page 111]]

    (A) Is a taxable fuel registrant;
    (B) Has an unexpired notification certificate (as described in Sec. 
48.4081-5) from the position holder; and
    (C) Has no reason to believe that any information in the 
notification certificate is false.
    (3) Joint and several liability of terminal operator; incorrect 
information provided. The terminal operator is jointly and severally 
liable for the tax imposed under paragraph (b) of this section if, in 
connection with the removal of diesel fuel or kerosene that is not dyed 
and marked in accordance with Sec. 48.4082-1, the terminal operator 
provides any person (including the position holder with respect to the 
fuel) with any bill of lading, shipping paper, record, or similar 
document indicating that the diesel fuel or kerosene is dyed and marked 
in accordance with Sec. 48.4082-1.
    (4) Example. The following example illustrates this paragraph (c) 
and Sec. 48.4082-1:

    Example. (i) TO is a terminal operator and PH is the position holder 
with respect to, and owner of, 8,000 gallons of diesel fuel stored in 
TO's terminal. TO and PH are taxable fuel registrants. When the fuel is 
removed from the terminal at the rack, the fuel is not dyed and marked 
in accordance with Sec. 48.4082-1, and TO does not provide any person 
with any paperwork indicating that the fuel is dyed and marked. After 
the removal from the terminal, PH sells the fuel to individuals for use 
as heating oil, a nontaxable use.
    (ii) Because PH is the position holder of the fuel at the time of 
the removal from the terminal, PH is liable for the tax imposed by 
section 4081. The removal is subject to tax because the fuel is not dyed 
and marked in accordance with Sec. 48.4082-1, and later use of the fuel 
in a nontaxable use does not make the removal from the terminal exempt 
from tax.
    (iii) Because PH is a taxable fuel registrant and TO did not provide 
any person with any paperwork indicating that the fuel is dyed and 
marked, TO is not jointly and severally liable for tax under paragraph 
(c) (2) or (3) of this section.

    (d) Rate of tax. For the rate of tax generally, see section 4081(a). 
For the rate of tax on gasohol and on gasoline removed for gasohol 
production, see Sec. 48.4081-6.
    (e) Exemptions. For exemptions from the tax imposed under this 
section, see Sec. Sec. 48.4081-4 (relating to gasoline blendstocks), 
48.4082-1 (relating to dyed diesel fuel and dyed kerosene), 48.4082-5 
(relating to diesel fuel and kerosene used in Alaska), 48.4082-6 
(relating to aviation-grade kerosene), and 48.4082-7 (relating to 
kerosene used for a feedstock purpose).
    (f) Effective date. This section is applicable after December 31, 
1993.

[T.D. 8659, 61 FR 10455, Mar. 14, 1996, as amended by T.D. 8879, 65 FR 
17156, Mar. 31, 2000]