SERVICE LISTS 'GASOLINE BLEND STOCKS' AND GASOLINE ADDITIVES THAT WILL BE SUBJECT TO EXCISE TAX.

Rev. Rul. 88-70

ISSUE

What products are "gasoline blend stocks" and "products commonly used as additives in gasoline" that are treated as gasoline under section 4082(a) of the Internal Revenue Code for purposes of the excise tax imposed by section 4081(a)?

LAW AND ANALYSIS

Effective January 1, 1988, section 1703 of the Tax Reform Act of 1986, 1986-3 (Vol. 1) C.B. 691, amended section 4081(a) of the Code generally to impose a tax on the earlier of

(A) the removal, or

(a) the sale,

of gasoline by the refiner or importer thereof or the terminal operator.

Section 4082(a) of the Code provides that the term "gasoline" includes, to the extent prescribed in regulations

(1) gasoline blend stocks, and

(2) products commonly used as additives in gasoline.

For purposes of paragraph (1), the term "gasoline blend stocks" means any petroleum product component of gasoline.

Sections III C and D of Notice 88-16, 1988-7 I.R.B. 51, at 52, provide rules that must be followed to effectuate tax-free sales and removals of any product that might be considered a blend stock or additive under the definitions included in the proposed regulations that were published in the Federal Register on November 18, 1987 (52 Fed. Reg. 44141), 1987-2 C.B. 1036.

Section III B of Notice 88-16 states that the Service intends to list by revenue ruling specific products that will, and specific products that will not, be considered to be blend stocks or additives.

HOLDINGS

(1) The following petroleum products are determined to be gasoline blend stocks treated as gasoline under section 4082(a) of the Code;

     alkylate

     antioxidant

Sales and removals of products not listed in this holding are nontaxable events and are not subject to the procedures described in sections III C and D of Notice 88-16.

These lists may be modified by future revenue rulings. However, any additions to the lists will be made prospective only.

(2) Taxable sales and removals of products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel will be taxed under section 4081(a) or section 4081(b) of the Code on the basis of the total volume of the blended product, even though such gasoline may contain products not listed in this holding.

DRAFTING INFORMATION

The principal author of this revenue ruling is Frank Boland of the Individual Tax Division. For further information regarding this revenue ruling contact Mr. Boland on (202) 566-3410 (not a toll-free call).