[Code of Federal Regulations]

[Title 26, Volume 16]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 26CFR48.4041-7]



[Page 58]

 

                       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 F_Special Fuels

 

Sec.  48.4041-7  Dual use of taxable liquid fuel.



    Tax applies to all taxable liquid fuel sold for use or used as a 

fuel in the motor which is used to propel a diesel-powered vehicle or in 

the motor used to propel a motor vehicle, motorboat, or aircraft, even 

though the motor is also used for a purpose other than the propulsion of 

the vehicle, motorboat, or aircraft. Thus, if the motor of a diesel-

powered highway vehicle or a motorboat operates special equipment by 

means of a power take-off or power transfer, tax applies to all taxable 

liquid fuel sold for this use or so used, whether or not the special 

equipment is mounted on the vehicle or boat. For example, tax applies to 

diesel fuel sold to operate the mixing unit on a concrete mixer truck if 

the mixing unit is operated by means of a power take-off from the motor 

of the vehicle. Similarly, tax applies to all taxable liquid fuel sold 

for use or used in a motor propelling a fuel oil truck even though the 

same motor is used to operate the pump (whether or not mounted on the 

truck) for discharging the fuel into customers' storage tanks. However, 

tax does not apply to liquid fuel sold for use or used in a separate 

motor to operate special equipment (whether or not the equipment is 

mounted on the vehicle). If the taxable liquid fuel used in a separate 

motor is drawn from the same tank as the one which supplies fuel for the 

propulsion of the vehicle, a reasonable determination of the quantity of 

taxable liquid fuel used in such separate motor or during such period is 

acceptable for purposes of application of the tax. This determination 

must be based, however, on the operating experience of the person using 

the taxable liquid fuel, and the taxpayer must maintain records which 

support the allocation used. Devices to measure the number of miles the 

vehicle has traveled, such as hubometers, may be used in making a 

preliminary determination of the number of gallons of fuel used to 

propel the vehicle. In order to make a final determination of the number 

of gallons of fuel used to propel the vehicle, there must be added to 

this preliminary determination the amount of fuel consumed while idling 

or warming up the motor preparatory to propelling the vehicle.



[T.D. 8066, 51 FR 16, Jan. 2, 1986]