[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of April 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR48.4041-7]

[Page 67]
 
                       TITLE 26--INTERNAL REVENUE
 
                  CHAPTER I--INTERNAL REVENUE SERVICE,
                       DEPARTMENT OF THE TREASURY
                               (Continued)
 
PART 48--MANUFACTURERS AND RETAILERS EXCISE TAXES--Table of Contents
 
                        Subpart F--Special Fuels
 
Sec. 48.4041-7  Dual use of taxable liquid fuel.

    Tax applies to all taxable liquid fuel sold for use or used as a 
fuel in the motor which is used to propel a diesel-powered vehicle or in 
the motor used to propel a motor vehicle, motorboat, or aircraft, even 
though the motor is also used for a purpose other than the propulsion of 
the vehicle, motorboat, or aircraft. Thus, if the motor of a diesel-
powered highway vehicle or a motorboat operates special equipment by 
means of a power take-off or power transfer, tax applies to all taxable 
liquid fuel sold for this use or so used, whether or not the special 
equipment is mounted on the vehicle or boat. For example, tax applies to 
diesel fuel sold to operate the mixing unit on a concrete mixer truck if 
the mixing unit is operated by means of a power take-off from the motor 
of the vehicle. Similarly, tax applies to all taxable liquid fuel sold 
for use or used in a motor propelling a fuel oil truck even though the 
same motor is used to operate the pump (whether or not mounted on the 
truck) for discharging the fuel into customers' storage tanks. However, 
tax does not apply to liquid fuel sold for use or used in a separate 
motor to operate special equipment (whether or not the equipment is 
mounted on the vehicle). If the taxable liquid fuel used in a separate 
motor is drawn from the same tank as the one which supplies fuel for the 
propulsion of the vehicle, a reasonable determination of the quantity of 
taxable liquid fuel used in such separate motor or during such period is 
acceptable for purposes of application of the tax. This determination 
must be based, however, on the operating experience of the person using 
the taxable liquid fuel, and the taxpayer must maintain records which 
support the allocation used. Devices to measure the number of miles the 
vehicle has traveled, such as hubometers, may be used in making a 
preliminary determination of the number of gallons of fuel used to 
propel the vehicle. In order to make a final determination of the number 
of gallons of fuel used to propel the vehicle, there must be added to 
this preliminary determination the amount of fuel consumed while idling 
or warming up the motor preparatory to propelling the vehicle.

[T.D. 8066, 51 FR 16, Jan. 2, 1986]