SECTION 3. LAW

Section 4081(a)(1)(A)(i) and (ii) impose tax on the removal of taxable fuel, which includes kerosene, from any refinery or terminal.

Section 4081(a)(2)(A)(iii) prescribes a tax rate of 24.3 cents per gallon of kerosene for the tax imposed by § 4081(a)(1)(A). Section 4081(a)(2)(B) imposes an additional tax of 0.1 cent per gallon (referred to as the LUST financing rate).

Section 4081(a)(2)(C) reduces the tax rates on kerosene used in aviation under certain conditions. In the case of kerosene that is removed from any refinery or terminal directly into the fuel tank of an aircraft for use in aviation, the rate of tax under § 4081(a)(2)(A)(iii) is reduced from 24.3 cents per gallon to (i) 4.3 cents per gallon in the case of use for commercial aviation by a person registered for such use under § 4101 or (ii) 21.8 cents per gallon for use in the case of any aviation not described by § 4081(a)(2)(C)(i).

Section 4081(a)(3)(A) provides that, for purposes of § 4081(a)(2)(C), a refueler truck, tanker, or tank wagon shall be treated as part of a terminal if (i) such terminal is located within an airport, (ii) any kerosene which is loaded in such truck, tanker, or wagon at such terminal is for delivery only into aircraft at the airport in which such terminal is located, (iii) such truck, tanker, or wagon meets the requirements of § 4081(a)(3)(B) with respect to such terminal, and (iv) except in the case of exigent circumstances identified by the Secretary in regulations, no vehicle registered for highway use is loaded with kerosene at such terminal.

Section 4081(a)(3)(B) provides that refuelers meet the requirements of § 4081(a)(3) with respect to a terminal (and are therefore treated as part of a terminal) if such refueler—(i) has storage tanks, hose, and coupling equipment designed and used for the purposes of fueling aircraft, (ii) is not registered for highway use, and (iii) is operated by—(I) the terminal operator of such terminal, or (II) a person that makes a daily accounting to such terminal operator of each delivery of fuel from such refueler.

Section 4081(a)(3)(C) provides that the Secretary shall require under § 4101(d) reporting by such terminal operator of— (i) any information obtained under § 4081(a)(3)(B)(iii)(II) (that is, the daily accountings to terminal operators of fuel deliveries made by other persons operating refuelers), and (ii) any similar information maintained by such terminal operator with respect to deliveries of fuel made by refuelers operated by such terminal operator.

Section 4081(a)(3)(D) provides that (i) in the case of kerosene treated as removed from a terminal by reason of § 4081(a)(3), the rate of tax specified in § 4081(a)(2)(C)(i) (that is, 4.3 cents per gallon plus 0.1 cent per gallon LUST) applies if such terminal is located within a secured area of an airport, and (ii) in all other cases, the rate of tax specified in § 4081(a)(2)(C)(ii) (that is, 21.8 cents per gallon plus 0.1 cent per gallon LUST) applies.

Section 4082(e) provides that in the case of kerosene (other than kerosene with respect to which tax is imposed under § 4043) which is exempt from the tax imposed by § 4041(c) (other than by reason of a prior imposition of tax, for example, because of the operation of § 4041(f) or (g)) and which is removed from any refinery or terminal directly into the fuel tank of an aircraft (1) the rate of tax under § 4081(a)(2)(A)(iii) shall be zero and (2) if such aircraft is employed in foreign trade or trade between the United States and any of its possessions, the increase in such rate under § 4081(a)(2)(B) shall be zero. For purposes of § 4082(e), any removal described in § 4081(a)(3)(A) shall be treated as a removal from a terminal but only if such terminal is located within a secure area of an airport.

Section 4083(d)(1) provides that the Secretary may in administering compliance with subpart A of part III of subchapter A of chapter 32 (motor and aviation fuels), § 4041, and penalties and other administrative provisions related thereto—(A) enter any place at which taxable fuel is produced or is stored (or may be stored) for purposes of—(i) examining the equipment used to determine the amount or composition of such fuel and the equipment used to store such fuel, (ii) taking

March 28, 2016 486 Bulletin No. 2016–13

mation required in that section. The request must also explain why the applicant thinks the application should not be denied. c. If the Chief of Excise Tax Exami nation concurs with the denial, the IRS will issue the applicant a written letter denying its appeal for SAT designation. If the Chief of Excise Tax Examination determines that the IRS should grant the SAT designation, the IRS will issue the applicant a letter of approval. d. The applicant has no further admin istrative recourse if it disagrees with a denial on appeal and must submit another request for SAT designation under procedures described in § 5.01(2)(b) of this notice.

.02 Requirements after SAT approval

(1) A terminal operator of a SAT must notify the IRS in writing within 10 days when there are changes in business operations, including changes in refueling equipment, security measures, owners/operators, or any other change to any of the SAT designation criteria listed in § 4 of this notice.

(2) Upon receipt or discovery of information that a terminal no longer qualifies for the SAT designation, the IRS may confirm that the terminal no longer complies with the SAT criteria, and issue a written notification to the terminal operator that the terminal’s SAT status will be revoked and the terminal removed from the SAT list no earlier than 10 business days from the date of the written notification.

(3) A terminal operator may appeal the notification of revocation through the following appeal procedures:

a. The terminal operator submits a

written appeal of the notice of revocation to the Chief of Excise Tax Examination for a final determination within 10 business days from the date of the written notification. b. The terminal operator must send the

request to the address provided in § 5.01(1) of this notice and include the information required in that section. The request must also explain why revocation would be inappropriate.

and removing samples of such fuel, and (iii) inspecting any books and records and any shipping papers pertaining to such fuel, and (B) detain, for the purposes referred in § 4083(d)(1)(A), any container which contains or may contain any taxable fuel.

Section 48.4101–1(c)(1)(vi) of the Manufacturers and Retailers Excise Tax regulations requires a terminal operator to register under § 4101.