Schedule T. Two-Party Exchange Information Reporting

In a two-party exchange, the receiving person, not the delivering person, is liable for the tax imposed on the removal of taxable fuel from the terminal at the terminal rack. A “two-party exchange” means a transaction (other than a sale) where the delivering person and receiving person are both taxable fuel registrants and all of the following occur.

• The transaction includes a transfer from the delivering person, who holds the inventory position for the taxable fuel in the terminal as reflected in the records of the terminal operator.

• The exchange transaction occurs before or at the same time as completion of removal across the rack by the receiving person.

• The terminal operator in its records treats the receiving person as the person that removes the product across the terminal rack for purposes of reporting the transaction on Form 720-TO, Terminal Operator Report.

• The transaction is the subject of a written contract.

Information reporting. Schedule T is used to report gallons of taxable fuel:

• Received in a two-party exchange within a terminal—these gallons must also be included on the appropriate line on Form 720, page 1; or

• Delivered in a two-party exchange with a removal across the rack.

Enter all gallons of fuel received or delivered in a two-party exchange within a terminal for the applicable fuel.