Page:United States Statutes at Large Volume 100 Part 3.djvu/965

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2773

SEC. 1702. CERTAIN DIESEL FUEL TAXES MAY BE IMPOSED ON SALES TO RETAILERS.

(a) IN GENERAL.—Section 4041 (relating to imposition of tax on special fuels) is amended by adding at the end thereof the following new subsection: "(n) TAX ON DIESEL FUEL FOR HIGHWAY VEHICLE USE MAY B E IMPOSED ON SALE TO RETAILER.—Under regulations prescribed by the

Secretary— "(1) IN GENERAL.—Upon the written consent of the seller, the tax imposed by subsection (a)(1)— "(A) shall apply to the sale of diesel fuel to a qualified retailer (and such sale shall be treated as described in subsection (a)(1)(A)), and "(B) shall not apply to the sale of diesel fuel by such retailer or the use of diesel fuel described in subsection (a)(1)(B) if tax was imposed on such fuel under subparagraph (A) of this paragraph. "(2)

LIABILITY FOR VIOLATION OF CERTIFICATION.—Notwith-

standing paragraph (1), a qualified retailer shall be liable for the tax on liquid described in paragraph (3)(C)(ii) if such liquid is used as fuel in a diesel-powered highway vehicle. "(3) DEFINITIONS.—For purposes of this subsection— "(A) QUALIFIED RETAILER.—The term 'qualified retailer' means any retailer— "(i) who elects (under such terms and conditions as may be prescribed by the Secretary) to have paragraph (1) apply to all sales of diesel fuel to such retailer by any person, and '- ^ "(ii) who agrees to provide a written notice to such person that paragraph (1) applies to all sales of diesel fuel by such person to such retailer. Such election and notice shall be effective for such period or • periods as may be prescribed by the Secretary. "(B) RETAILER.—The term 'retailer' means any person who sells diesel fuel for use as a fuel in a diesel-powered highway vehicle. Such term does not include any person who sells diesel fuel primarily for resale. "(C) DIESEL FUEL.—

"(i) IN GENERAL.—The term 'diesel fuel' means any liquid on which tax would be imposed by subsection (a)(1) if sold to a person, and for a use, described in subsection (a)(1)(A). "(ii) EXCEPTION.—A liquid shall not be treated as diesel fuel for purposes of this subsection if the retailer certifies in writing to the seller of such liquid that such liquid will not be sold for use as a fuel in a dieselpowered highway vehicle. "(4) FAILURE TO NOTIFY SELLER.—

"(A) IN GENERAL.—If a qualified retailer fails to provide the notice described in paragraph (3)(A)(ii) to any seller of diesel fuel to such retailer— "(i) paragraph (1) shall not apply to sales of diesel fuel by such seller to such retailer during the period for which such failure continues, and "(ii) any diesel fuel sold by such seller to such retailer during such period shall be treated as sold by such

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