Page:United States Statutes at Large Volume 118.djvu/1641

 118 STAT. 1611 PUBLIC LAW 108–357—OCT. 22, 2004 include a secured area in which a terminal is located (within the meaning of section 4081(a)(3)(A)(i) of the Internal Revenue Code of 1986, as added by this para graph). (4) LIABILITY FOR TAX ON AVIATION GRADE KEROSENE USED IN COMMERCIAL AVIATION.—Subsection (a) of section 4081 is amended by adding at the end the following new paragraph: ‘‘(4) LIABILITY FOR TAX ON AVIATION GRADE KEROSENE USED IN COMMERCIAL AVIATION.—For purposes of paragraph (2)(C), the person who uses the fuel for commercial aviation shall pay the tax imposed under such paragraph. For purposes of the preceding sentence, fuel shall be treated as used when such fuel is removed into the fuel tank.’’. (5) NONTAXABLE USES.— (A) IN GENERAL.—Section 4082 is amended by redesig nating subsections (e) and (f) as subsections (f) and (g), respectively, and by inserting after subsection (d) the fol lowing new subsection: ‘‘(e) AVIATION GRADE KEROSENE.—In the case of aviation grade kerosene which is exempt from the tax imposed by section 4041(c) (other than by reason of a prior imposition of tax) and which is removed from any refinery or terminal directly into the fuel tank of an aircraft, the rate of tax under section 4081(a)(2)(A)(iv) shall be zero.’’. (B) CONFORMING AMENDMENTS.—(i) Subsection (b) of section 4082 is amended by adding at the end the following new flush sentence: ‘‘The term ‘nontaxable use’ does not include the use of aviation grade kerosene in an aircraft.’’. (ii) Section 4082(d) is amended by striking paragraph (1) and by redesignating paragraphs (2) and (3) as para graphs (1) and (2), respectively. (6) NONAIRCRAFT USE OF AVIATION GRADE KEROSENE.— (A) IN GENERAL.—Subparagraph (B) of section 4041(a)(1) is amended by adding at the end the following new sentence: ‘‘This subparagraph shall not apply to avia tion grade kerosene.’’. (B) CONFORMING AMENDMENT.—The heading for para graph (1) of section 4041(a) is amended by inserting ‘‘AND KEROSENE’’ after ‘‘DIESEL FUEL’’. (b) COMMERCIAL AVIATION.—Section 4083 is amended by redesignating subsections (b) and (c) as subsections (c) and (d), respectively, and by inserting after subsection (a) the following new subsection: ‘‘(b) COMMERCIAL AVIATION.—For purposes of this subpart, the term ‘commercial aviation’ means any use of an aircraft in a busi ness of transporting persons or property for compensation or hire by air, unless properly allocable to any transportation exempt from the taxes imposed by sections 4261 and 4271 by reason of section 4281 or 4282 or by reason of section 4261(h).’’. (c) REFUNDS.— (1) IN GENERAL.—Paragraph (4) of section 6427(l) is amended to read as follows: ‘‘(4) REFUNDS FOR AVIATION GRADE KEROSENE.— ‘‘(A) NO REFUND OF CERTAIN TAXES ON FUEL USED IN COMMERCIAL AVIATION.—In the case of aviation grade ker osene used in commercial aviation (as defined in section

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