[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: 26CFR48.6421-4]

[Page 219-220]
 
                       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 O_Refunds and Other Administrative Provisions of Special 
            Application to Retailers and Manufacturers Taxes
 
Sec. 48.6421-4  Meaning of terms.

    For purposes of the regulations under section 6421, unless otherwise 
expressly indicated--
    (a) Gasoline. The term ``gasoline'' has the same meaning given to 
such term by section 4082(b) and regulations thereunder.
    (b) Qualified business use. (1) The term ``qualified business use'' 
means any use by a person in a trade or business of the person or in an 
activity of the person described in section 212 (relating to production 
of income) otherwise than as a fuel in a highway vehicle--
    (i) That at the time of the use is registered, or is required to be 
registered, for highway use under the laws of any state, the District of 
Columbia, or a foreign country, or
    (ii) That, in the case of a highway vehicles owned by the United 
States, is used on the highway.

The term ``qualified business use'' does not include any use in a 
motorboat, other than a vessel used in the fisheries or whaling 
business. See paragraph (c) of this section for the definition of 
``highway vehicle.'' See paragraph (d) of this section for the 
definition of ``highway.''
    (2) Any highway vehicle operated under a dealer's tag, license, or 
permit will be considered to be registered. A highway vehicle is not 
considered to be ``registered'' solely because there has been issued a 
special permit for operation of the vehicle at particular times and 
under specified conditions. However, a highway vehicle that is required 
to be registered and that is also issued a special permit for operation 
of the vehicle under specified conditions, such as carrying an oversize 
load, is still considered to be ``registered.''
    (3) Nonbusiness, off-highway use of gasoline by such vehicles and 
equipment as minibikes, snowmobiles, power lawn mowers, chain saws, and 
other yard equipment does not qualify as gasoline used a qualified 
business use.
    (4) Examples of gasoline used in a qualified business use include:
    (i) Gasoline used (in a trade or business or for the production of 
income) in stationary engines to operate pumps, generators, compressors, 
and power saws;

[[Page 220]]

    (ii) Gasoline used (in a trade or business or for the production of 
income) for cleaning purposes;
    (iii) Gasoline used (in a trade or business or for the production of 
income) in forklift trucks, bulldozers, and earthmovers; and
    (iv) Gasoline used by a nonhighway vehicle in connection with the 
trade or business of construction, mining or logging.
    (5) Illustration. The application of this paragraph (b) may be 
illustrated by the following example:

    Example. M Corporation, a logging company, files its income tax 
return on the basis of the calendar year. During 1982, the company used 
20,000 gallons of gasoline in its logging business. Of this amount, 
12,000 gallons were used as fuel in registered highway vehicles which 
were operated both on the public highways and on the company's private 
roads. Of the remaining 8,000 gallons, 6,000 were used in nonhighway 
vehicles, such as tractors and bulldozers, and 2,000 gallons were used 
in highway vehicles, such as heavy trucks which, at the time of use, 
were neither registered nor required to be registered under state law 
for highway use by reason of being operated entirely on the company's 
property. As the ultimate purchaser, M may take a credit on its income 
tax return for 1982 under this section in respect of the 6,000 gallons 
used in the nonhighway vehicles and the 2,000 gallons used in the 
unregistered highway vehicles. However, no credit may be allowed with 
respect to the 12,000 gallons used in the registered highway vehicles 
even though a portion of this gasoline was used in operating the 
vehicles on the company's own property.

    (c) Highway vehicle. The term ``highway vehicle'' has the same 
meaning assigned to this term under Sec. 48.4061(a)-1(d).
    (d) Highway. The term ``highway'' includes any road, whether a 
Federal highway, State highway, city street, or otherwise, in the United 
States which is not a private roadway.
    (e) Noncommercial aviation. The term ``non-commercial aviation'' has 
the same meaning given to such term by section 4041(c)(4).
    (f) Calendar quarter. The term ``calendar quarter'' means a period 
of three calendar months ending on March 31, June 30, September 30, or 
December 31.
    (g) Taxable year. The ``taxable year'' of a governmental unit or 
tax-exempt organization described in Sec. 48.6421-1(c) or Sec. 
48.6421-2(c) is the calendar or fiscal year on the basis of which it 
regularly keeps its books. The ``taxable year'' of persons subject to 
income tax shall have the meaning it has under section 7701(a)(23).

[T.D. 8043, 50 FR 32042, Aug. 8, 1985]