Rev. Rul. 75-397

Advice has been requested whether the product described below is gasoline for purposes of the tax imposed by section 4081(a) of the Internal Revenue Code of 1954.

A company produces a petroleum product known as straight run gasoline. The product is in the distillation range of gasoline, and has an octane rating of 66 as determined by the motor method. The company blends the product with other petroleum products and certain additives, resulting in gasoline sold for use in motor vehicles. The company also sells the straight run gasoline for use in producing synthetic natural gas.

Section 4081(a) of the Code imposes a tax on gasoline sold by the producer or importer thereof, or by any producer of gasoline.

Section 4082(b) of the Code states that the term "gasoline" means all products commonly or commercially known or sold as gasoline which is suitable for use as a motor fuel.

Due to the low octane rating of the straight run gasoline, it is not suitable for use as a motor fuel without further processing and blending. Therefore, before further processing or blending, the straight run gasoline is not gasoline within the meaning of section 4082(b) of the Code, and sales thereof are not subject to the tax imposed by section 4081(a).