Rev. Proc. 79-49

Section 1. Purpose

The purpose of this revenue procedure is to extend the period that may be covered by a written notification, for purchases of diesel or special motor fuel for a taxable purpose, from four calendar quarters to twelve calendar quarters.

Sec. 2. Background

.01 Under the provisions of section 48.4041-4(a) of the Manufacturers and Retailers Excise Tax Regulations, the sale of diesel fuel or special motor fuels (taxable under section 4041 of the Internal Revenue Code) delivered to a storage facility will be considered taxable where the purchaser indicates to the seller in writing either prior to or at the time of sale that the entire quantity of the liquid covered by the sale is for use by the purchaser as fuel for a taxable purpose. If such written statement is not furnished by the purchaser, the purchaser becomes liable for the tax at the applicable rate on that quantity of the liquid which is used by it as fuel for a taxable purpose, or which is sold by it in a taxable transaction.

.02 Rev. Proc. 73-20, 1973-2 C.B. 470, provides a simplified procedure by which a bulk purchaser of diesel fuel or special motor fuels may notify a particular vendor once every four calendar quarters that all of the fuel to be delivered to a designated storage facility over a period of time is for use as a fuel exclusively for taxable purposes, thereby causing all sales of such fuel delivered to the purchaser's storage facility to be taxable sales.

.03 In order to further simplify the procedure for bulk purchasers, and to reduce the cost and inconvenience of issuing written statements every four calendar quarters, especially in the case of long term fuel supply agreements, the Internal Revenue Service has determined that the period that may be covered by written notification should be extended.

Sec. 3. Procedure

.01 A purchaser of diesel fuel or special motor fuels who maintains a storage facility from which the fuel is drawn exclusively for use as fuel for a taxable purpose may indicate to a seller in writing once every twelve calendar quarters that the entire quantity of the liquid to be purchased by it during that period and delivered to that particular facility is for use as fuel for a taxable purpose.

.02 This procedure is not applicable to aviation fuels taxable under section 4041(c) of the Code. See section 154.1-1(a)(2) of the Temporary Regulations in Connection with the Airport and Airway Revenue Act of 1970, which sets forth rules with respect to sales of aviation fuel not delivered into a fuel supply tank of an aircraft.

Sec. 4. Effect on Other Documents

Rev. Proc. 73-20 is superseded.