Section 4. TAXABLE — Internal Revenue Bulletin 2005-46

BY CREDIT CARD ISSUERS

(a) Overview . This section describes the changes made by § 11163 of SAFETEA under which a person extending credit on a credit card (credit card issuer) may claim a credit, refund, or payment with respect to taxable fuel sold to a state or local government for its exclusive use or to a nonprofit educational organization for its exclusive use (exempt users). Section 7 of Notice 2005–4 is modified in accordance with these changes, as explained in this section.

(b) Identity of the claimant —(1) Gaso- line —(i) Section 6416(b)(2) generally provides that the tax paid on gasoline is deemed to be an overpayment if the gasoline was sold to an exempt user. Section 6402(a) generally allows credits or refunds of overpayments to the person that made the overpayment (that is, the person that paid the tax to the government).

(ii) If gasoline is purchased with a credit card issued to an exempt user, § 6416(a)(4)(B) provides that the credit card issuer is treated as the person that paid the tax if prescribed conditions are met.

Among other conditions, the credit card issuer must be registered by the Service.

(iii) If gasoline is purchased by an exempt user without the use of a credit card, § 6416(a)(4)(A) provides that the ultimate vendor of the gasoline is treated as the person (and the only person) that paid the tax, but only if the vendor is registered by the Service.

(iv) Guidance for claims made by ultimate vendors under § 6416(a)(4) and (b)(2) is set forth in § 7 of Notice 2005–4. The guidance set forth in § 7(a)(1)(ii) of Notice 2005–4 and § 2 of Notice 2005–24 (relating to oil company credit cards) does not apply to sales after December 31, 2005. (v) If the conditions of § 6416(a)(4) are not met, a claim under § 6416 may not be made by the person that actually paid the tax to the government. Instead, the exempt user may make a claim under § 6421(c). For any particular transaction, a claim may not be made under § 6421(c) if the tax is credited or refunded under § 6416 to the credit card issuer or the ultimate vendor.

(2) Diesel fuel and kerosene —(i) If taxed diesel fuel or kerosene is purchased with a credit card issued to a state, § 6427(l)(6)(D) provides that the credit card issuer may, under prescribed conditions, claim a credit or payment related to the tax. Among other conditions, the credit card issuer must be registered by the Service.

(ii) If diesel fuel or kerosene is purchased by a state without the use of a credit card, § 6427(l)(6)(C) provides that the ultimate vendor of the diesel fuel or kerosene may claim a credit or payment related to the tax, but only if the vendor is registered by the Service and other prescribed con

2005–46 I.R.B. 956 November 14, 2005

gasoline, diesel fuel or kerosene covered by the claim:

(1) The total number of gallons. (2) The claimant’s registration number. (3) A statement that the claimant— (i) Has not collected the amount of the tax from the person who purchased the taxable fuel; or

(ii) Has obtained written consent from the ultimate purchaser to the allowance of the credit or refund.

(4) A statement that the claimant— (i) Has repaid or agreed to repay the amount of the tax to the ultimate vendor;

(ii) Has obtained the written consent of the ultimate vendor to the allowance of the credit or refund; or

(iii) Has otherwise made arrangements which directly or indirectly provide the ultimate vendor with reimbursement of such tax.

(5) A statement that the claimant has in its possession an unexpired certificate described in paragraph (h) of this section and has no reason to believe any information in the certificate is false.

(h) Certificate —(1) In general . The certificate to be provided to the credit card issuer consists of a statement that is signed under penalties of perjury by a person with authority to bind the state or nonprofit educational organization that purchased the fuel with the issuer’s credit card, is in substantially the same form as the model certificate in paragraph (h)(2) of this section, and contains all of the information necessary to complete such model certificate. A new certificate 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 earlier of the following dates:

(i) The date two years after the effective date of the certificate.

(ii) The date a new certificate is provided.

(2) Model certificate .

ditions are met. Under § 6427(l)(6)(A), the state may not claim a credit or payment related to the tax paid on diesel fuel or kerosene purchased without the use of a credit card. Claims made by ultimate vendors under § 6427(l)(6)(A) are described in § 48.6427–9.

(iii) If diesel fuel or kerosene is purchased with a credit card issued to a state, but the credit card issuer is not registered by the Service (or does not meet certain other conditions), the credit card issuer must collect the amount of the tax and the state is the proper claimant under § 6427(l)(6)(D).

Nonprofit educational organization has the meaning given to the term in § 4221(d)(5).

(d) Registration —(1) In general . Application for registration is made on Form 637, Application for Registration (For Cer- tain Excise Tax Activities), in accordance with the instructions for that form. Form 637 will be revised to include an activity letter for credit card issuers.

(2) Requirements . The Service will register an applicant as a credit card issuer only if the Service—

(i) Determines that the applicant is engaged in business as a credit card issuer and in that business extends credit to state and local governments or nonprofit educational organizations by means of a credit card used for the purchase of taxable fuel; and

(ii) Is satisfied with the filing, deposit, payment, reporting, and claim history for all federal taxes of the applicant and any related person (as defined in § 48.4101–1(b)(5)).

(3) Separate entity not required . Section 48.4101–1(a)(4) provides that each business unit that has, or is required to have, a separate employer identification number is treated as a separate person. The Service will not require a credit card issuer

to form a separate business entity for the issuance of credit cards to qualify for registration under § 4101 or to claim a refund, credit, or payment under § 6416(a)(4)(B) or 6427(l)(6)(D).

(4) Current UV and UP registrants . A person that is registered under § 4101 under Activity Letter “UV” or “UP” is treated as registered for purposes of claims under this section related to the tax on fuels that are purchased without the use of a credit card and will not have to be reregistered unless notified to do so by the Service.

(e) Conditions to allowance of a credit, refund or payment . A claim for credit, refund, or payment is allowable under § 6416(a)(4)(B) or § 6427(l)(6)(D) if—

(1) The claimant is a registered credit card issuer;

(2) The claim relates to the tax on taxable fuel sold to a state for its exclusive use or gasoline sold to a nonprofit educational organization for its exclusive use;

(3) The fuel was purchased with a credit card issued by the claimant;

(4) Tax was imposed on the fuel under § 4041 or 4081; and

(5) The claimant has filed a timely claim for credit, refund, or payment and the claim contains all of the information required in paragraph (g) of this section.

(f) Form of claim —(1) Gasoline claims . For taxes paid on gasoline, claims for credit or refund under § 6416(a)(4) are made on Form 8849, Claim for Refund of Excise Taxes .

(2) Diesel fuel or kerosene claims . For taxes imposed on diesel fuel or kerosene, claims for payment under § 6427(l)(6) are made on Form 8849, Claim for Refund of Excise Taxes, and claims for income tax credit under §§ 34 and 6427(l)(6) are made on Form 4136, Credit for Federal Tax Paid on Fuels .

(g) Content of claim . Each claim under § 6416(a)(4)(B) or § 6427(l)(6)(D) for a credit, refund, or payment must contain the following information with respect to the

November 14, 2005 957 2005–46 I.R.B.

CERTIFICATE OF BUYER OF TAXABLE FUEL FOR USE BY A STATE OR

NONPROFIT EDUCATIONAL ORGANIZATION

(To support credit card issuer’s claim for a credit, refund, or payment under § 6416(a)(4)(B) or § 6427(l)(6)(D) of the Internal Revenue Code.)

Name, address, and employer identification number of credit card issuer.

The undersigned ultimate purchaser (“Buyer”) hereby certifies the following under the penalties of perjury (check one):

Buyer will use the taxable fuel to which this certificate relates for the exclusive use of a state; or

Buyer will use the gasoline to which this certificate relates for the exclusive use of a nonprofit educational organization.

This certificate applies to all purchases made with the credit card identified below during the period specified:

Buyer’s account number .
Effective date of certificate .
Expiration date of certificate (period not to exceed 2 years after the effective date).

Buyer will provide a new certificate to the credit card issuer if any information in this certificate changes.

Buyer understands that by signing this certificate, Buyer gives up its right to claim a credit or payment for the taxable fuel purchased with the credit card to which this certificate relates.

Buyer acknowledges that it has not and will not claim any credit or payment for the taxable fuel purchased with the credit card to which this certificate relates.

Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such 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

Name of Buyer

Employer identification number

Address of Buyer

Signature and date signed

January 1, 2006, the rate of tax imposed by § 4081 is reduced for diesel-water fuel emulsion that meets the requirements described in § 4081(a)(2)(D). These requirements include the registration under § 4101 of the person liable for tax on the removal or sale of the diesel-water fuel emulsion. Section 6427(m) provides that a credit or payment is allowable if a person uses diesel fuel taxed at the full rate to produce diesel-water fuel emulsion

(3) Current certificates held by credit card issuers . A certificate also meets the conditions of this paragraph (h) if it is similar to the certificate described in paragraph (h)(2) of this section and was obtained by the credit card issuer for purposes of processing a claim under § 6416 or 6427 as in effect before January 1, 2006. These certificates expire on the earlier of January 1, 2007, or the expiration date on the certificate.

(i) Effective date . This section is effective January 1, 2006, and applies to claims relating to fuel sold to its ultimate purchaser on or after that date.