(a) Overview. This section prescribes the conditions under which tax does not apply to the removal or entry of kerosene for use for a feedstock purpose.
(b) Definitions. The following definitions apply to this section:
Feedstock purpose means the use of kerosene for nonfuel purposes in the manufacture or production of any substance other than gasoline, diesel fuel, or special fuels referred to in section 4041. Thus, for example, kerosene is used for a feedstock purpose when it is used as an ingredient in the production of paint and is not used for a feedstock purpose when it is used to power machinery at a factory where paint is produced.
Feedstock user means a person that uses kerosene for a feedstock purpose.
Registered feedstock user means a feedstock user that is—
(1) Registered under section 4101 as a feedstock user; or
(2) With respect to removals and entries before October 1, 2000, a taxable fuel registrant.
(c) Exemption for removals and entries. Tax is not imposed on the removal or entry of kerosene if—
(1) The person otherwise liable for tax is a taxable fuel registrant;
(2) In the case of a removal from a terminal, the terminal is an approved terminal; and
(3)
(i) The person otherwise liable for tax uses the kerosene for a feedstock purpose; or
(ii) 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 in paragraph (e) of this section) from the buyer and has no reason to believe any information in the certificate is false.
(d) Later sale—(1) In general. Paragraph (c) of this section does not apply with respect to kerosene that is sold as described in paragraph (c)(3)(ii) of this section if the buyer in that sale (the certifying buyer) sells the kerosene.
(2) Imposition of tax; liability for tax. Notwithstanding §§48.4081-2 and 48.4081-3, in any case in which paragraph (d)(1) of this section applies, tax with respect to that kerosene is imposed at the time of the sale by the certifying buyer and the certifying buyer is liable for the tax.
(3) Rate of tax. For the rate of tax, see section 4081.
(e) Certificate—(1) In general. The certificate described in this paragraph (e) is a statement by a buyer that is signed under penalties of perjury by a person with authority to bind the buyer, is in substantially the same form as the model certificate provided in paragraph (e)(2) of this section, and contains all information necessary to complete the model certificate. A new certificate or notice that the current certificate is invalid must be given if any information in the current certificate changes. The certificate may be included as part of any business records normally used to document a sale. The certificate expires on the earliest of the following dates:
(i) The date one year after the effective date of the certificate (which may be no earlier than the date it is signed).
(ii) The date the buyer provides the seller a new certificate or notice that the current certificate is invalid.
(iii) The date the seller is notified by the Internal Revenue Service or the buyer that the buyer's registration has been revoked or suspended.
(2) Model certificate.
CERTIFICATE OF REGISTERED FEEDSTOCK USER
(To support tax-free removals and entries of kerosene under section 4082 of the Internal Revenue Code.)
___________________(Buyer) certifies the following
Name of Buyer
under penalties of perjury:
Buyer is a registered feedstock user with registration number ____. Buyer's registration has not been revoked or suspended.
The kerosene to which this certificate applies will be used by Buyer for a feedstock purpose.
This certificate applies to ____ percent of Buyer's purchases from ____________ (name, address, and employer identification number of seller as follows (complete as applicable):
1. A single purchase on invoice or delivery ticket number ______.
2. All purchases between ______ (effective date) and ______ (expiration date) (period not to exceed one year after the effective date) under account or order number(s) ______. If this certificate applies only to Buyer's purchases for certain locations, check here ____ and list the locations.
If Buyer sells the kerosene to which this certificate relates, Buyer will be liable for tax on that sale.
Buyer will provide a new certificate to the seller if any information in this certificate changes.
If Buyer violates the terms of this certificate, the Internal Revenue Service may revoke Buyer's registration.
Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making any fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution.
Printed or typed name of person signing
Title of person signing
Employer identification number
Address of Buyer
Signature and date signed
(f) Effective date. This section is applicable after March 30, 2000, except that paragraph (d) of this section is applicable after June 30, 2000.
[T.D. 8879, 65 FR 17158, Mar. 31, 2000]
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