Kerosene for Use — Publication 510

A credit or payment of the tax on kerosene used in aviation may be allowed if the rate of tax on the use is less than the rate of tax that was charged on the kerosene. The credit or payment is allowable to the ultimate purchaser, registered ultimate vendor, or registered credit card issuer, depending on how the kerosene was acquired and if certain conditions are satisfied.

Ultimate purchasers. Ultimate purchaser means a person who purchases kerosene for use in aviation. Generally, the ultimate purchaser is the aircraft operator.

Registered ultimate vendor. Registered ultimate vendor means a person who sells kerosene for use in aviation to the ultimate purchaser and is registered as an ultimate vendor with an IRS Form 637 activity letter "UA," or "UV" for sales to a state or local government for its exclusive use.

Registered credit card issuer. Registered credit card issuer means a person that issues credit cards for sales of taxable fuel to a state or local government for its exclusive use and is registered as a credit card issuer with the IRS Form 637 activity letter "CC."

Kerosene for use in commercial aviation (other than foreign trade). An ultimate purchaser that purchases kerosene for use in commercial aviation on which tax was imposed at a rate higher than the commercial aviation rate of $0.044 per gallon may make a claim for the difference between the rate that was imposed (either $0.244 per gallon or $0.219 per gallon) and $0.044 per gallon.

The ultimate purchaser may file a claim for kerosene used in commercial aviation in which tax was originally imposed at a higher rate if the ultimate purchaser didn't provide a waiver to the

ultimate vendor with respect to the claim. An ultimate purchaser doesn't need to be registered to support an ultimate purchaser claim for commercial aviation use. See Sales by Registered Ultimate Vendors (Other Than State or Local Government Purchases) next, for information about registered ultimate vendor claims.

Kerosene for use in aviation, nontaxable use (other than use by state or local gov- ernment). An ultimate purchaser, other than a state or local government, that purchases kerosene used in aviation for a nontaxable use, on which tax was imposed at a rate higher than the nontaxable use rate of $0.001 per gallon (or $0 in the case of foreign trade), may make a claim for the difference between the rate that was imposed (either $0.244 per gallon or $0.219 per gallon) and $0.001 per gallon (or $0 in the case of foreign trade). The ultimate purchaser may file a claim for nontaxable use of kerosene used in aviation if the ultimate purchaser didn't provide a waiver to the ultimate vendor with respect to the claim.

The following are the nontaxable uses of kerosene used in aviation for which an ultimate purchaser may make a claim.

On a farm for farming purposes.
In foreign trade.
Certain helicopter and fixed-wing aircraft uses.
For use other than as a fuel in the propulsion engine of an aircraft.
Exclusive use by a qualified blood collector organization.
Exclusive use by a nonprofit educational organization.
In an aircraft owned by an aircraft museum.
In military aircraft.

See Sales by Registered Ultimate Vendors (Other Than State or Local Government Pur- chases) , later, for information about registered ultimate vendor claims.

Kerosene for use in aviation by a state or local government. A state or local government may generally not file an ultimate purchaser claim for nontaxable use of kerosene used in aviation. Generally, only a registered credit card issuer or a registered ultimate vendor may file a claim for kerosene sold for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government).

State or local government credit card pur- chases. If taxed kerosene for use in aviation is purchased with a credit card issued to a state or local government, then the person who extended credit to the state or local government (the credit card issuer) is treated as the person that paid the tax and may make the claim. In order for the credit card issuer to make the claim, the credit card issuer must be registered by the IRS with Form 637 activity letter "CC" and have the required certificate from the ultimate purchaser. A sample certificate is included as Model Certificate R in the Appendix. The credit card issuer must have the certificate at the time the claim is filed.

If the requirements above aren't met by the credit card issuer, then the credit card issuer must collect the tax from the ultimate purchaser

(state or local government) and only the ultimate purchaser may make the claim.

State or local government purchases not made with a credit card. If a state or local government purchases kerosene for use in aviation without the use of a credit card, the ultimate vendor is the only person that may make a claim. In order for the ultimate vendor to make the claim, the ultimate vendor must be registered by the IRS with Form 637 activity letter "UV" and have the required certificate from the ultimate purchaser. A sample certificate is included as Model Certificate P in the Appendix. The registered ultimate vendor must have the certificate at the time the claim is filed.

Sales by Registered Ultimate Vendors (Other Than State or Local Government Purchases)

Kerosene for use in commercial aviation or noncommercial aviation. The registered ultimate vendor of kerosene for use in commercial aviation (other than foreign trade) or noncommercial aviation (other than nonexempt, noncommercial aviation and exclusive use by a state, political subdivision of a state, or the District of Columbia) may make this claim if the ultimate purchaser waives its right to the credit or payment by providing the registered ultimate vendor with a waiver. A sample waiver is included as Model Waiver L in the Appendix. The registered ultimate vendor must have the waiver at the time the credit or payment is claimed.

Noncommercial aviation means any use of an aircraft not described as commercial aviation. For the definition of commercial aviation, see Commercial aviation , earlier.

Kerosene for use in nonexempt, noncom- mercial aviation. Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in nonexempt, noncommercial aviation. The ultimate vendor must be registered by the IRS (activity letter “UA”) and have the required certificate from the ultimate purchaser. A sample certificate is included as Model Certificate Q in the Appendix. The registered ultimate vendor must have the certificate at the time the credit or payment is claimed.

Kerosene for use partly in commercial avia- tion and partly in nonexempt, noncommer- cial aviation. If the fuel is used partly for use in commercial aviation and partly for use in nonexempt, noncommercial aviation, the operator may identify, either at the time of purchase or after the kerosene has been used, the amount that will be (or has been) used in commercial aviation. At the same time, the operator would either make the claim or waive the right to make the claim for credit or refund of the kerosene for use in commercial and nonexempt, noncommercial aviation.

If the operator doesn't identify the amount of kerosene that will be (or has been) used in commercial aviation, the operator may provide a certificate to the ultimate vendor similar to Model Certificate Q in the Appendix. For kerosene purchased with the certificate, used in commercial aviation, and taxed at $0.244 per

16 Chapter 2 Fuel Tax Credits and Refunds Publication 510 (12-2025)

gallon, use of the certificate will be treated as a waiver of the right to claim a credit or refund for the $0.025 per gallon part of the tax. The ultimate vendor may make this claim. The operator may make a claim for the $0.175 tax per gallon of the kerosene, but can't waive the right to make the claim for the $0.175 tax per gallon.

Kerosene for use in aviation by a state or local government. Only the registered ultimate vendor may claim a credit or payment for sales of kerosene for use in aviation to a state or local government for its exclusive use (including essential government use by an Indian tribal government). The kerosene for use in aviation must be purchased by the state without the use of a credit card in order for the ultimate vendor to make the claim. The ultimate vendor must be registered by the IRS (activity letter “UV”) and have the required certificate from the ultimate purchaser. A sample certificate is included as Model Certificate P in the Appendix. The registered ultimate vendor must have the certificate at the time the credit or payment is claimed.

Credit card purchases. If taxed kerosene for use in aviation is purchased with a credit card issued to a state, the person who extended credit to the state (the credit card issuer) is treated as the person that paid the tax and makes the claim if the credit card issuer:

Is registered by the IRS;
Has established that the amount of tax hasn’t been collected from the person who purchased the kerosene, or has obtained written consent from the ultimate purchaser to the allowance of the credit or refund;
Has repaid or agreed to repay the amount of the tax to the ultimate vendor, has obtained the written consent of the ultimate vendor to the allowance of the credit or refund, or has made arrangements that provide the ultimate vendor with reimbursement of the tax.

If the requirements above aren’t met by the credit card issuer, the credit card issuer must

Table 2-1. Type of Use Table

collect the tax from the ultimate purchaser and only the ultimate purchaser may make the claim.