SERVICE EXTENDS TIME FOR REPORTING FLOOR STOCKS TAX ON GASOLINE/GASOHOL FOR DEALERS HAVING NO OTHER EXCISE TAX LIABILITY.

Notice 88-12

The due date for reporting the one-time floor stocks tax on gasoline and gasohol has been extended for dealers that have no other excise tax liability during the first quarter of 1988. These dealers now have until April 30, 1988, to report the floor stocks tax on Form 720, Quarterly Federal Excise Tax Return. All other dealers have until April 30 or May 31, on whichever date the return is due, to file Form 720.

This notice supersedes the portions of Proposed Regulations section 48.4081-1(g)(5)(iii) and Notice 813 that stated that dealers having only a floor stocks excise tax liability for the first quarter of 1988 must report the tax on Form 720 by February 16, 1988.

Regardless of when the return is due, all dealers must deposit the floor stocks tax by February 16, 1988, using Form 8109, Federal Tax Deposit Coupon.

The tax is a one-time tax imposed on gasoline and gasohol that was held by dealers on January 1, 1988, and on which no tax under section 4081 of the Internal Revenue Code had previously been paid. It is imposed on dealers who are wholesalers, jobbers, distributors, or retailers. The tax rate is 9 cents a gallon on gasoline and 3 cents a gallon on gasohol.

Under the Technical Corrections Bill of 1987, it is proposed that the additional Leaking Underground Storage Tank (LUST) tax be imposed on floor stocks held by dealers on January 1, 1988, at the rate of 0.1 (1/10) cent a gallon. At this time the Technical Corrections Bill has not been enacted. In the event the Bill is not passed and the tax is paid with the February 16, 1988, remittance, a credit or refund of the LUST tax on floor stocks can be obtained. If no payment of this tax is made and the Technical Corrections Bill is enacted, payment of this tax will be required.

In addition, registered gasohol blenders are reminded that they are eligible to purchase gasoline at a reduced rate of tax (3.33 (3 1/3) cents a gallon plus the LUST tax rate of 0.11 (1/9) cent a gallon) under section 4081(c)(1) of the Code during the first quarter of 1988 only if the gasoline purchased is to be blended with alcohol to produce gasohol. See Notice 88-2, 1988-2 I.R.B. 26. Use of registration to purchase gasoline at the reduced rate that is not to be used for blending with alcohol to produce gasohol is misuse of the registration and may lead to revocation of the registration.

The principal author of this notice is John N. Harris of the Tax Forms and Publications Division. For further information regarding this notice contact Mr. Harris on (202) 566-3601 (not a toll-free call).