SERVICE SIMPLIFIES CERTIFICATION PROCEDURES FOR TAX-EXEMPT SALES OF GASOLINE BLEND STOCKS AND ADDITIVES.

Notice 88-109

The purpose of this Notice is to inform persons using the certification procedure provided in section III. D. of Notice 88-16, 1988-7 IRB 51 (February 16, 1988), relating to tax-free sales of gasoline blend stocks and additives that are not to be used by the purchaser for blending with or adding to gasoline, that a single certification may cover sales of a particular type of product to a particular person during a twelve-month period. Thus, it will no longer be necessary to obtain a separate certification for each sale to a particular person.

Section III. D. of Notice 88-16 generally provides that a registered person may sell a gasoline blend stock or additive tax- free to any person, whether or not such person is registered for purposes of the gasoline excise tax, if certain certification and other requirements are satisfied. One of the requirements under the section III. D. certification procedures is that the certification (obtained from the purchaser regarding the use of the product) must be attached to or appear on the invoice for the sale. The Service will no longer require that the certification appear on or be attached to the invoice for a particular sale if a certification, in the form provided below, has appeared on or been attached to any invoice for a sale of the same type of product to the same person during the preceding twelve months. As used in the preceding sentence, "any invoice" includes a sales invoice, purchase order, or other record relating to the sale that is maintained by the seller in the normal course of its business.

Therefore, under section III. D. of Notice 88-16, as amended by this Notice, a registered person may generally sell a gasoline blend stock or additive tax-free to any person that is not registered (for purposes of the gasoline excise tax), provided (1) the registered person in the normal course of its business maintains on file, for at least three years from the date of the transaction, copies of invoices of sales of blend stocks and additives showing the name of the purchaser, the date of purchase, and the type and volume of product purchased; (2) the registered person either (a) obtains from the purchaser a certification in the form provided under section III. D. of Notice 88-16, or (b) has, within the preceding twelve months, obtained on or attached to an invoice for the same type of product, a certification in the form provided below that the product will not be used by the purchaser for blending with or adding to gasoline; (3) the registered person provides, or has, within the preceding twelve months provided, a disclosure statement to the purchaser in the form provided under section III. D. of Notice 88-16, including the additional language provided in this Notice; (4) the district director has not determined that the registered person may not make tax-free sales of blend stocks or additives under this rule; and (5) such blend stock or additive is not listed in a revenue ruling (or other administrative pronouncement) as ineligible for tax-free sale under this rule.

A certification covering all sales of a particular type of product for a twelve-month period shall take the following form:

"The undersigned purchaser ("I" or "me") hereby certifies that the product shown on this invoice will not be used by me for blending with or adding to gasoline (other than to produce a fuel taxable under section 4041(b)(2) or (m)).

"I also hereby certify that no product of the same type shown on this invoice will be used by me for this purpose during the period ending one year from the date that I sign this certification.

"I have received a disclosure statement from the seller describing my legal obligations under this certification. I have read the disclosure statement and agree to the terms described in it.

"I understand that any fraudulent use of this certification to purchase any product free of tax will subject me to penalties of perjury, which may include fine and imprisonment.

               "Signature of purchaser _________________________

"You are not required to obtain a certification statement (or statement of registration) on or attached to the invoice for a resale if the purchaser has, within the one-year period preceding the date of the resale, certified to you, on or attached to a sales invoice for the same type of product, that it would not within the following one-year period, use any of that type of product for blending with, or adding to gasoline (other than to produce a fuel taxable under section 4041(b)(2) or (m))."

Unregistered persons that purchase a gasoline blend stock or additive free from tax by use of the certification procedures provided under section III. D. of Notice 88-16 are reminded that they may resell the gasoline blend stock or additive tax-free to another unregistered person if the certification procedures under section III. D. of Notice 88-16, as amended by this Notice, are followed for the resale.

The other requirements and procedures provided under section III. D. of Notice 88-16 also continue to apply.

This Notice is effective for sales of gasoline blend stocks and additives on or after [THE DATE OF PUBLICATION OF THIS NOTICE IN THE INTERNAL REVENUE BULLETIN]. Therefore, the new procedures provided by this Notice can be used on or after that date. Any reference in this Notice to a sale of a gasoline blend stock or additive also applies to a removal of a gasoline blend stock or additive.

This document serves as an "administrative pronouncement" as that term is described in section 1.6661-3(b)(2) of the Income Tax Regulations and may be relied upon to the same extent as a revenue ruling or revenue procedure.

The principal author of this Notice is Timothy J. McKenna of the Legislation and Regulations Division. For further information regarding this Notice, contact Ruth Hoffman on (202) 566-3287 (not a toll-free call).