80 Subpart G—Fuel Used on Inland Waterways

§ 48.4042–1 26 CFR Ch. I (4–1–12 Edition)

Title of person signing fuel means any liquid fuel including llllllllllllllllllllllll gasoline, diesel fuel, special motor fuel, Employer identification number or Bunker C residual fuel oil. llllllllllllllllllllllll (f) Commercial waterway transpor- Address of Buyer tation—(1) In general. For purposes of section 4042(a) and § 48.4042–2(c)(1), the llllllllllllllllllllllll term ‘‘commercial waterway transpor- Signature and date signed tation’’ means the use of a vessel on (d) Rate of tax. The rate of the tax im- the waterways specified in paragraphs posed under this section is the rate pre- (g) (1) through (27) of this section if: scribed by section 4041(a)(3). (i) Use of the vessel is in the business (e) Effective date. This section is ef- of transporting property for compensa- fective October 1, 1995. tion or hire, or [T.D. 8609, 60 FR 40082, Aug. 7, 1995; 60 FR (ii) Use of the vessel is in trans- 50245, Sept. 28, 1995; T.D. 8659, 61 FR 10453, porting property in the business of the Mar. 14, 1996; T.D. 8879, 65 FR 17155, Mar. 31, owner, lessee, or operator of the vessel 2000; T.D. 9051, 69 FR 15941, Apr. 2, 2003] (whether or not a fee is charged). Except for the operation of certain Subpart G—Fuel Used on Inland fishing vessels, the operation of all ves- Waterways sels satisfying the requirements of paragraph (f)(1)(i) or (1)(ii) of this sec- SOURCE: T.D. 7536, 43 FR 13516, Mar. 31, tion will be deemed ‘‘commercial wa- 1978, unless otherwise noted. terway transportation,’’ regardless of whether the vessel is actually engaged § 48.4042–1 Tax on fuel used in com- in the transportation of property on a mercial waterway transportation. particular voyage. Thus, ‘‘commercial (a) In general. Section 4042(a) imposes waterway transportation’’ includes the an excise tax on the use of liquid fuel operation of vessels while moving in the propulsion system of commer- empty of cargo, while awaiting passage cial transportation vessels while trav- through locks, while dislodging vessels eling on certain inland and intra- grounded on a sandbar, while moving coastal waterways (see § 48.4042–1 (f)). to or from a repair facility, while ma- The tax applies generally to all types neuvering around loading and unload- of vessels, including ships, barges, and ing docks, and while fleeting barges tugboats. It is in addition to all other into a single tow. taxes imposed on the sale or use of (2) Fishing vessels exception. A vessel fuel. does not transport property in the (b) Amount of tax. For the amount of business of the owner, lessee, or oper- tax, see section 4042(b). ator, for purposes of paragraph (f)(1)(ii) (c) Person liable for tax. The person of this section, by merely transporting operating the vessel in which the pro- fish or other aquatic animal life caught pulsion fuel is consumed is the user of on the voyage. The tax imposed by sec- liquid fuel for purposes of section tion 4042(a) does not apply to fuel used 4042(a). Thus, a person who operates (or by a fishing vessel while traveling to a whose employees operate) a vessel is fishing site, while engaged in fishing, responsibile for filing returns and pay- or while returning from the fishing site ing the tax. If a vessel owner (or lessee) with its catch. However, the tax ap- contracts with an independent con- plies to fuel used by a commercial ves- tractor to operate the vessel, the inde- sel along the taxable waterways while pendent contractor is the user of liquid traveling to pick up aquatic animal life fuel for purposes of section 4042(a), re- caught by another vessel and while gardless of who purchases the fuel. transporting the catch of such other (d) Time of use. Fuel is not taxed by vessel. section 4042(a) when put into a vessel’s (g) Specified waterways. Only fuel used tanks. For purposes of section 4042(a), on those waterways specified in section fuel is used when it is actually con- 206 of the Inland Waterways Revenue sumed by a vessel’s engine. Act of 1978 (specified waterways) is tax- (e) Liquid fuel. For purposes of the able. The specified waterways are as tax imposed under this section, liquid follows:

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(1) Alabama-Coosa Rivers. From junc- berry Fork (RM 429.6), Locust Fork tion with the Tombigbee River at river (RM 407.8), and Sipsey Fork (RM 430.4). mile (hereinafter referred to as RM) 0 (8) Columbia River (Columbia-Snake to junction with the Coosa River at RM Rivers Inland Waterways). From The 314. Dalles at RM 191.5 to Pasco, Wash- (2) Allegheny River. From confluence ington (McNary Pool), at RM 330, with the Monongahela River to form Snake River from RM 0 at the mouth the Ohio River at RM 0 to the head of to RM 231.5 at Johnson Bar Landing, the existing project at East Brady, Idaho. Pennsylvania, RM 72. (9) Cumberland River: Junction with (3) Apalachicola-Chattachoochee and Ohio River at RM 0 to head of naviga- Flint Rivers. Apalachicola River from tion, upstream to Carthage, Tennessee, mouth at Apalachicola Bay (intersec- at RM 313.5. tion with the Gulf Intracoastal Water- (10) Green and Barren Rivers. Green way) RM 0 to junction with River from junction with the Ohio Chattachoochee and Flint Rivers at River at RM 0 to head of navigation at RM 107.8. Chattachoochee River from RM 149.1. junction with Apalachicola and Flint (11) Gulf Intracoastal Waterway Rivers at RM 0 to Columbus, Georgia, (G.I.W.W.) From the mouth of St. at RM 155 and Flint River, from junc- Mark’s River, Florida, to Brownsville, tion with Apalachicola and Texas, 1,134.5 miles. For vessels trav- Chattachoochee Rivers at RM 0 to eling along the G.I.W.W. no matter how Bainbridge, Georgia, at RM 28. short the distance, the G.I.W.W. in- (4) Arkansas River (McClellan-Kerr Ar- cludes the main channel, all alternate kansas River Navigation System). From channels, and all adjoining bays and junction with Mississippi River at RM sounds, regardless of depth. However, 0 to port of Catoosa, Oklahoma, at RM vessels merely crossing the G.I.W.W. on 448.2. route either to a coastal port or to a (5) Atchafalaya River. From RM 0 at nonspecified waterway will not be its intersection with the Gulf Intra- treated as traveling on the G.I.W.W. coastal Waterway at Morgan City, Lou- (12) Illinois Waterway. Illinois River isiana, upstream to junction with Red from junction with the Mississippi River at RM 116.8. River at RM 0 to the Des Plaines River (6) Atlantic Intracoastal Waterway and along the Des Plaines River to (A.I.W.W.). Two inland water routes ap- Lockport Lock and Dam at RM 291. proximately paralleling the Atlantic Chicago Sanitary and Ship Canal from coast between Norfolk, Virginia, and Lockport Lock and Dam at RM 291 to Miami, Florida, for 1,192 miles via both the South Branch Chicago River and the Albermarle and Chesapeake Canal along the South Branch Chicago River and Great Dismal Swamp Canal routes. to Lake Street, Chicago at RM 325.5 For vessels traveling along the near Chicago Harbor. Calumet-Sag A.I.W.W. no matter how short the dis- Channel from junction with the Chi- tance, the A.I.W.W. includes the main cago Sanitary and Ship Canal to the channel, all alternate channels, and all Little Calumet River and along the adjoining bays and sounds, regardless Little Calumet and Calumet Rivers to of depth. However, vessels merely turning basin 5, near the entrance to crossing the A.I.W.W. on route either Lake Calumet, an additional 23.8 RMS. to a coastal port or to a nonspecified Total waterway distance approxi- waterway will not be treated as trav- mately 350 RMs. eling on the A.I.W.W. (13) Kanawha River. From junction (7) Black Warrior-Tombigbee-Mobile with Ohio River at RM 0 to RM 90.6 at Rivers. Black Warrior River System Deepwater, West Virginia. from RM 2.9, Mobile River (at Chicka- (14) Kaskaskia River. From junction saw Creek) to confluence with with the Mississippi River at RM 0 to Tombigbee River at RM 45. Tombigbee RM 36.2 at Fayetteville, Illinois. River (to Demopolis at RM 215.4) to (15) Kentucky River. From junction port of Birmingham, RM’s 374—411 and with Ohio River at RM 0 to confluence upstream to head of navigation on Mul- of Middle and North Forks at RM 258.6.

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(16) Lower Mississippi River. From gines which are not used to generate Baton Rouge, Louisiana, RM 233.9 to movement of a vessel. When the pro- Cairo, Illinois, RM 953.8. pulsion engine operates special equip- (17) Upper Mississippi River From ment by means of a power take-off or Cairo, Illinois, RM 953.8 to Min- power transfer, the tax applies to all neapolis, Minnesota, RM 1,811.4. liquid fuel consumed by that engine. (18) Missouri River. From junction For example, the tax applies to all fuel with Mississippi River at RM 0 to used in the engine operating an alter- Sioux City, Iowa, at RM 734.8. nator, a generator, or pumps, if that (19) Monongahela River. From junc- engine is used to generate movement of tion with Allegheny River to form the a vessel. Ohio River at RM 0 to junction of the (2) Common tank. If the liquid fuel Tygart and West Fork Rivers, Fair- consumed by a nonpropulsion engine is montOhio River. From junction with the Mississippi River at RM 0 to junc- drawn from the same tank as fuel con- tion of the Allegheny and Monongahela sumed by a propulsion engine, a rea- Rivers at Pittsburgh, Pennsylvania, at sonable determination of the quantity RM 981. of fuel used in such a separate engine (21) Ouachita-Black Rivers. From the will be acceptable for purposes of ex- mouth of the Black River at its junc- cluding from taxation a portion of the tion with the Red River at RM 0 to RM fuel consumed by the vessel. The deter- 351 at Camden, Arkansas. mination of the amount of fuel con- (22) Pearl River. From junction of sumed by the nonpropulsion engine West Pearl River with the Rigolets at may be based primarily on the oper- RM 0 to Bogalusa, Louisiana, RM 58. ating experience of the person using (23) Red River. From RM 0 to the the fuel; however, in order to exclude mouth of Cypress Bayou at RM 236. fuel from taxation under the rule set (24) Tennessee River. From junction out in this paragraph (a)(2), the tax- with Ohio River at RM 0 to confluence payer must maintain records which with Holstein and French Rivers at RM will support the allocation used. 652. (b) Voyages crossing boundaries of the (25) Tennessee-Tombigbee Waterway. specified waterways. Fuel consumed by From its confluence with the Ten- a vessel traveling along the specified nessee River to the Warrior River at waterways is taxable only to the ex- Demopolis, Alabama. tent of fuel consumed for propulsion (26) White River. From RM 9.8 to RM while on the specified waterways. Gen- 255 at Newport, Arkansas. erally, the operator may calculate the (27) Willamette River. From RM 21 up- amount of fuel consumed while on the stream of Portland, Oregon, to Harris- specified waterways during a particular burg, Oregon, at RM 194. voyage by mulitplying total fuel con- [T.D. 7727, 45 FR 70861, Oct. 27, 1980. Redesig- sumed in the propulsion engine by a nated by T.D. 8066, 51 FR 14, Jan. 2, 1986, as fraction. The numerator of the fraction amended by T.D. 8659, 61 FR 10453, Mar. 14, is the time spent operating on the spec- 1996] ified waterways; the denominator is § 48.4042–2 Special rules. the total time spent operating on the (a) Dual use of liquid fuels—(1) Dual specified and nonspecified waterways use by the propulsion engine. The tax during the voyage. This calculation imposed by section 4042(a) applies to all may not be used when it is unreason- taxable liquid used as a fuel in the pro- able. It may be determined to be unrea- pulsion system of the vessel, regardless sonable by: of whether the engine (or other propul- (1) Better evidence of fuel consumed sion system) is used for a purpose other (e.g., readings from an accurate fuel than propulsion of the vessel. For pur- gauge or records from similar voyages); poses of this section, any engines gen- or erating movement of a vessel (includ- (2) The existence of factors causing a ing bow thrusters used for steering) are substantial discrepancy between the part of the propulsion system. The tax rate of fuel consumption on the speci- does not apply to fuel consumed in en- fied and nonspecified waterways.

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