United States (Federal) Fuel Taxes
Import Duty for Fuel Ethanol
The U.S. Customs and Border Protection imposes a 2.5% ad valorem tariff on the import of ethanol for use in fuel which is based on the percent volume of the fuel at the time of transaction. The 2009 Normal Trade Relations duty rate (formerly known as the Most Favored Nation duty) of $0.54 per gallon of ethanol also applies to imports from most countries to offset the Volumetric Ethanol Excise Tax Credit (VEETC) available from the U.S. Internal Revenue Service (IRS). Ethanol imports from countries that are part of the North Atlantic Free Trade Agreement, Caribbean Basin Initiative, and Andean Trade Preference Act may not be subject to the secondary duty provided the ethanol is produced with feedstocks from those nations (specific feedstock percentage requirements apply). Importers of ethanol must follow the same regulations as domestic producers, including registering with the IRS. (Reference Harmonized Tariff Schedule Number 99010050, and Public Laws 96-499, 99-514, 109-423, and 110-234)
Point of Contact
U.S. Customs and Border Protection
Phone (703) 526-4200 or (877) 227-5511
http://www.cbp.gov/
Alternative Fuel Tax Exemption
Alternative fuels used in a manner that the Internal Revenue Service (IRS) deems as nontaxable are exempt from federal fuel taxes. Common nontaxable uses in a motor vehicle are: on a farm for farming purposes; in certain intercity and local buses; in a school bus; exclusive use by a nonprofit educational organization; and exclusive use by a state, political subdivision of a state, or the District of Columbia. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuel. For more information, see IRS Publication 510, which is available via the IRS Web site.
Point of Contact
Excise Tax Branch
U.S. Internal Revenue Service Office of Chief Counsel
Phone (202) 622-3130
http://www.irs.gov/
Idle Reduction Equipment Excise Tax Exemption
Qualified on-board idle reduction devices and advanced insulation are exempt from the federal excise tax imposed on the retail sale of heavy-duty highway trucks and trailers. The exemption also applies to the installation of qualified equipment on vehicles after the vehicles have been placed into service. For a list of eligible products and additional information about product exemption eligibility criteria, see the U.S. Environmental Protection Agency's (EPA) SmartWay Transport Idle Reduction Web site. The exemption applies to equipment that was determined by the Administrator of the EPA, in consultation with the Secretary of Energy and the Secretary of Transportation, to reduce the idling of the tractor at a motor vehicle rest stop or other location where such vehicles are temporarily parked or remain stationary. Only equipment sold on or after October 4, 2008, is eligible. For more information, see IRS Publication 510 and the instructions for IRS Form 720, which are available via the IRS Web site. (Reference Public Law 110-343, Section 206, and 26 U.S. Code 4053)
Point of Contact
Excise Tax Branch
U.S. Internal Revenue Service Office of Chief Counsel
Phone (202) 622-3130
http://www.irs.gov/
