Rev. Rul. 58-201

Advice has been requested whether the increase in the tax rate on gasoline from two cents a gallon to three cents a gallon, effective July 1, 1956, applies to sales of aviation gasoline, grades 80-87, 91-100, and 100-130 octane.

Section 4081(a) of the Internal Revenue Code of 1954, as amended by the Highway Revenue Act of 1956, P.L. 627, 84th Cong., 70 Stat. 387, C.B. 1956-2, 1150, imposes a manufacturers excise tax at the rate of three cents a gallon on gasoline sold by the producer or importer thereof, or by any producer of gasoline. Prior to the enactment of the Highway Revenue Act of 1956, gasoline was subject to tax at the rate of two cents a gallon.

While under certain conditions diesel fuel and special motor fuels are sold subject to the retailers excise tax imposed by section 4041 of the Code at the rate of two cents a gallon, there are no provisions in the Code which would permit gasoline to be sold subject to the manufacturers excise tax at the rate of two cents a gallon. Accordingly, it is held that sales of aviation gasoline by the producer or importer thereof, or by any producer of gasoline, is subject to tax at the rate of three cents a gallon. However, insofar as applicable to this situation, section 6421(a) of the Code provides, in part, that the ultimate purchaser is entitled to a payment equal to one cent for each gallon of gasoline which is purchased on or after July 1, 1956, and which is used otherwise than as a fuel in a highway vehicle 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.