production of income) otherwise than as a fuel in a highway vehicle

(i) which (at the time of such use), is registered, or is required to be registered, for highway use under the laws of any State or foreign country, or

(ii) which, in the case of a highway vehicle owned by the United States, is used on the highway.

(B) Exception for use in motorboats.-The term "off-highway business use" does not include any use in a motorboat. The preceding sentence shall not apply to use in a vessel employed in the fisheries or in the whaling business.

(C) Commercial fishing vessels.-For provisions exempting from tax gasoline, and special motor fuels used for commercial fishing vessels, see

(i) subsections (a)(3) and (d)(3) of section 4221 (relating to certain tax-free sales),

(ii) section 6416(b)(2)(B) (relating to refund or credit in case of certain uses), and

(iii) section 4041(g)(1) (relating to exemptions from tax on special fuels).

(e) Exempt sales; other payments or refunds available.—

(1) EXEMPT SALES.-No amount shall be payable under this section with respect to any gasoline which the Secretary or his delegate determines was exempt from the tax imposed by section 4081. The amount which (but for this sentence) would be payable under this section with respect to any gasoline shall be reduced by any other amount which the Secretary or his delegate determines is payable under this section, or is refundable under any provision of this title, to any person with respect to such gasoline.

(2) Gasoline USED ON FARMS.-This section shall not apply in respect of gasoline which was (within the meaning of paragraphs (1), (2), and (3) of section 6420(c)) used on a farm for farming purposes.

(3) Gasoline used in noncommercial aviation.-This section shall not apply in respect of gasoline which is used as a fuel in an aircraft in noncommercial aviation (as defined in section 4041(c)(4)). Applicable laws

(1) IN GENERAL.-All provisions of law, including penalties, applicable in respect of the tax imposed by section 4081 shall, insofar as applicable and not inconsistent with this section, apply in respect of the payments provided for in this section to the same extent as if such payments constituted refunds of overpayments of the tax so imposed.

(2) EXAMINATION OF BOOKS AND WITNESSES.-For the purpose of ascertaining the correctness of any claim made under this section, or the correctness of any payment made in respect of any such claim, the Secretary or his delegate shall have the authority granted by paragraphs (1), (2), and (3) of section 7602 (relating to examination of books and witnesses) as if the claimant were the person liable for tax.

(g) Regulations

The Secretary or his delegate may by regulations prescribe the conditions, not inconsistent with the provisions of this section, under which payments may be made under this section.

(h) Effective date.-This section shall apply only with respect to gasoline purchased before October 1, 1988.

(i) Income tax credit in lieu of payment.—

(1) Persons not subject to income tax.-Payment shall be made under subsections (a) and (b) only to—

(A) the United States or an agency or instrumentality thereof, a State, a political subdivision of a State, or an agency or instrumentality of one or more States or political subdivisions,

or

(B) an organization exempt from tax under section 501(a) (other than an organization required to make a return of the tax imposed under subtitle A for its taxable year).

(2) Exception.-Paragraph (1) shall not apply to a payment of a claim filed under subsection (c)(2).

(3) Allowance of credit against income tax.—

For allowance of credit against the tax imposed by subtitle A see section 39.

(j) Cross references.—

(1) For rate of tax in case of special fuels used in noncommercial aviation or for nonhighway purposes, see section 4041.

(2) For civil penalty for excessive claims under this section, see section 6675.

(3) For fraud penalties, etc., see chapter 75 (section 7201 and following, relating to crimes, other offenses, and forfeitures).

(4) For treatment of an Indian tribal government as a State (and a subdivision of an Indian tribal government as a political subdivision of a State), see section 7871.

(Added June 29, 1956, c. 462, Title II, § 208(c), 79 Stat. 394, and amended July 25, 1956, c. 725, § 2, 70 Stat. 644; Sept. 2, 1958, Pub. L. 85-859, Title I, §§ 163(d)(3), 164(a), 72 Stat. 1312; Sept. 21, 1959, Pub. L. 86-342, Title II, § 201(d)(2), 73 Stat. 615; June 29, 1961, Pub. L. 87-61, Title II, § 201(e), 75 Stat. 124; June 28, 1962, Pub. L. 87-508, § 5(c)(2), 76 Stat. 118; June 21, 1965, Pub. L. 89-44, Title VIII, § 809(b), 79 Stat. 166; May 21, 1970, Pub. L. 91-258, Title II,

§§ 205(b)(1), (c), (8), 207(b), 84 Stat. 241, 242, 248; Dec. 31, 1970, Pub. L. 91-605, Title III, § 303(a)(11), 84 Stat. 1744; May 5, 1976, Pub. L. 94-280, Title III, § 303(a)(11), 90 Stat. 456; Oct. 4, 1976, Pub. L. 94-455, Title XIX, § 1906(a)(27)(A)(i), (B)-(D), (b)(13)(A), 90 Stat. 1827, 1828, 1834; Nov. 6, 1978, Pub. L. 95-599, Title V, § 502(a)(10), 92 Stat. 2756; Nov. 9, 1978, Pub. L. 95-618, Title II, §§ 222(a)(1), 233(a)(1), (3)(A), 92 Stat. 3186, 3190; Apr. 1, 1980, Pub. L. 96-222, Title I, § 108(c)(1), 94 Stat. 226; Pub. L. 97-424, Title V, §§ 511(c)(1), (3), 515(b)(7), 516(a)(6), Jan. 6, 1983, 96 Stat. 2170, 2171, 2182, 2183; Pub. L. 97-473, Title II, § 202(b)(12), Jan. 14, 1983, 96 Stat. 2610.)

Sec. 6424. Lubricating oil used for certain nontaxable purposes. [Repealed. Pub. L. 97-424, Title V. § 515(b)(5), Jan. 6, 1983, 96 Stat. 2181.]

Sec. 6427. Fuels not used for taxable purposes.

(a) Nontaxable uses.-Except as provided in subsection (i), if tax has been imposed under section 4041(a), or (c) on the sale of any fuel and the purchaser uses such fuel other than for the use for which sold, or resells such fuel, the Secretary shall pay (without interest) to him an amount equal to

(1) the amount of tax imposed on the sale of the fuel to him, reduced by

(2) if he uses the fuel, the amount of tax which would have been imposed under section 4041 on such use if no tax under section 4041 had been imposed on the sale of the fuel.

(b) Intercity, local, or school buses.

(1) Allowance.-Except as provided in paragraph (2) and subsection (i), if any fuel on the sale of which tax was imposed by subsection (a) of section 4041 is used in an automobile bus while engaged in

(A) furnishing (for compensation) passenger land transportation available to the general public, or

(B) the transportation of students and employees of schools (as defined in the last sentence of section 4221(d)(7)(C)), the Secretary shall pay (without interest) to the ultimate purchaser of such fuel an amount equal to the product of the number of gallons of such fuel so used multiplied by the rate at which tax was imposed on such fuel by subsection (a) of section 4041. (2) Limitation in case of nonscheduled intercity or local buses.— Paragraph (1)(A) shall not apply in respect of fuel used in any automobile bus while engaged in furnishing transportation which is not scheduled and not along regular routes unless the seating capacity of such bus is at least 20 adults (not including the driver). (c) Use for farming purposes.—Except as provided in subsection (i), if any fuel on the sale of which tax was imposed under section 4041(a) or

(c) is used on a farm for farming purposes (within the meaning of section 6420(c)), the Secretary shall pay (without interest) to the purchaser an amount equal to the amount of the tax imposed on the sale of the fuel. For purposes of this subsection, if fuel is used on a farm by any person other than the owner, tenant, or operator of such farm, the rules of paragraph (4) of section 6420(c) shall be applied (except that "liquid taxable under section 4041" shall be substitued for "gasoline" each place it appears in such paragraph (4)).

(d) Use by certain aircraft museums or in certain helicopters.-Except as provided in subsection (i), if—

(1) any gasoline on which tax was imposed by section 4081, or (2) any fuel on the sale of which tax was imposed under section 4041,

is used by an aircraft museum (as defined in section 4041(h)(2)) in an aircraft or vehicle owned by such museum and used exclusively for purposes set forth in section 4041(h)(2)(C), or is used in a helicopter for a purpose described in section 4041(), the Secretary shall pay (without interest) to the ultimate purchaser of such gasoline or fuel an amount equal to the aggregate amount of the tax imposed on such gasoline or fuel.

(e) Use in certain taxicabs.

(1) In general.-Except as provided in subsection (i), if—

or

(A) any gasoline on which tax is imposed by section 4081,

(B) any fuel on the sale of which tax is imposed by section 4041,

is used in a qualified taxicab while engaged exclusively in furnishing qualified taxicab services, the Secretary shall pay (without interest) to the ultimate purchaser of such gasoline or fuel an amount determined at the rates of 4 cents a gallon.

(2) Definitions.-For purposes of this subsection

(A) Qualified taxicab services.-The term "qualified taxicab services" means the furnishing of nonscheduled passenger land transportation for a fixed fare by a taxicab which is operated by a person who

(i) is licensed to engage in the trade or business of furnishing such transportation by a Federal, State, or local authority having jurisdiction over a substantial portion of such transportation furnished by such person, and

(ii) is not prohibited by company policy from furnishing (with the consent of the passengers) shared transportation. (B) Qualified taxicab.-Except as provided by subparagraph (C), the term "qualified taxicab" means any land vehicle the passenger capacity of which is less than 10 adults, including

the driver.

(C) Certain gas-guzzling taxicabs excluded.-The term "qualified taxicab" does not include any vehicle if—

(i) such vehicle was acquired by the person operating such vehicle after 1978,

(ii) the model year of such vehicle is 1978 or later, and (iii) the fuel economy of the model type of such vehicle is less than or equal to the average fuel economy standard applicable under section 502(a) of the Motor Vehicle Information and Cost Savings Act to the model year of such vehicle.

The preceding sentence shall not apply to any vehicle manufactured by a manufacturer to which an exemption under section 502(c) of the Motor Vehicle Information and Cost Savings Act was granted (or on application could have been granted) for the model year of such vehicle. Terms used in this subparagraph shall have the same meaning, as when used in Title V of the Motor Vehicle Information and Cost Savings Act.

(3) Termination.-This subsection shall not apply after September 30, 1984.

(f) Gasoline used to produce certain alcohol fuels.—

(1) In general.-Except as provided in subsection (i), if any gasoline on which a tax is imposed by section 4081 at the rate of 9 cents a gallon is used by any person in producing a mixture described in section 4081(c) which is sold or used in such person's trade or business, the Secretary shall pay (without interest) to such person an amount equal to the amount determined at the rate of 5 cents a gallon. The preceding sentence shall not apply with respect to any mixture sold or used after December 31, 1992.

(2) Coordination with other repayment provisions.-No amount shall be payable under paragraph (1) with respect to any gasoline with respect to which an amount is payable under subsection (d) or (e) of this section or under section 6420 or 6421.

(g) Time for filing claims; period covered.—

(1) General rule.-Except as provided in paragraph (2), not more than one claim may be filed under subsection (a), (b), (c), (d), (e), or (f) by any person with respect to fuel used during his taxable year; and no claim shall be allowed under this paragraph with respect to fuel used during any taxable year unless filed by the purchaser not later than the time prescribed by law for filing a claim for credit or refund of overpayment of income tax for such taxable year. For purposes of this paragraph, a person's taxable year shall be his taxable year for purposes of subtitle A.

(2) Exceptions.—

(A) In general.—If—

(i) $1,000 or more is payable under subsections (a), (b), (d), and (e),