Title 26 — Internal Revenue CodeRelease 119-73
§4042 Tax on fuel used in commercial transportation on inland waterways
Title 26 › Subtitle Subtitle D— - Miscellaneous Excise Taxes › Chapter CHAPTER 31— - RETAIL EXCISE TAXES › Subchapter Subchapter B— - Special Fuels › § 4042
Summary
You must pay a tax on any liquid used as fuel in a vessel for commercial waterway transportation during each calendar quarter. The tax is 29 cents per gallon plus 0.1 cent per gallon. The 0.1 cent part does not apply if that fuel was already taxed at that 0.1 cent rate under section 4041(d) or 4081, or during times when the 0.1 cent rate under section 4081 is not in effect. The tax does not apply to vessels built mainly for use on the high seas with a draft over 12 feet, to vessels used mainly to carry people, to certain State or local government uses under one definition, or to tug movement of LASH and SEABEE ocean-going barges released only to pick up or deliver international cargo. “Commercial waterway transportation” means using a vessel on inland or intracoastal U.S. waterways to move property for pay or to move property in the owner’s business (not fish caught on the trip). “Inland or intracoastal waterway” means the waterways listed in section 206 of the Inland Waterways Revenue Act of 1978. “Person” includes the United States, a State, local governments, and their agencies. Tax returns for each quarter are due by the last day of the first month after that quarter.
Full Legal Text
Title 26, §4042
Internal Revenue Code — Source: USLM XML via OLRC
(a)There is hereby imposed a tax on any liquid used during any calendar quarter by any person as a fuel in a vessel in commercial waterway transportation.
(b)(1)The rate of the tax imposed by subsection (a) is the sum of—
(A)the Inland Waterways Trust Fund financing rate, and
(B)the Leaking Underground Storage Tank Trust Fund financing rate.
(2)For purposes of paragraph (1)—
(A)The Inland Waterways Trust Fund financing rate is 29 cents per gallon.
(B)The Leaking Underground Storage Tank Trust Fund financing rate is 0.1 cent per gallon.
(3)The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply to the use of any fuel if tax was imposed with respect to such fuel under section 4041(d) or 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.
(4)The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply during any period during which the Leaking Underground Storage Tank Trust Fund financing rate under section 4081 does not apply.
(c)(1)The tax imposed by subsection (a) shall not apply with respect to any vessel designed primarily for use on the high seas which has a draft of more than 12 feet.
(2)The tax imposed by subsection (a) shall not apply with respect to any vessel used primarily for the transportation of persons.
(3)Subparagraph (B) of subsection (d)(1) shall not apply with respect to use by a State or political subdivision thereof.
(4)The tax imposed by subsection (a) shall not apply with respect to use for movement by tug of exclusively LASH (Lighter-aboard-ship) and SEABEE ocean-going barges released by their ocean-going carriers solely to pick up or deliver international cargoes.
(d)For purposes of this section—
(1)The term “commercial waterway transportation” means any use of a vessel on any inland or intracoastal waterway of the United States—
(A)in the business of transporting property for compensation or hire, or
(B)in transporting property in the business of the owner, lessee, or operator of the vessel (other than fish or other aquatic animal life caught on the voyage).
(2)The term “inland or intracoastal waterway of the United States” means any inland or intracoastal waterway of the United States which is described in section 206 of the Inland Waterways Revenue Act of 1978.
(3)The term “person” includes the United States, a State, a political subdivision of a State, or any agency or instrumentality of any of the foregoing.
(e)The date for filing the return of the tax imposed by this section for any calendar quarter shall be the last day of the first month following such quarter.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
section 206 of the Inland Waterways Revenue Act of 1978, referred to in subsec. (d)(2), is section 206 of Pub. L. 95–502, title II, Oct. 21, 1978, 92 Stat. 1700, which is classified to section 1804 of Title 33, Navigation and Navigable Waters.
Prior Provisions
A prior section 4042, act Aug. 16, 1954, ch. 736, 68A Stat. 478, provided a cross reference to section 4222 of this title for exemption from tax where special motor fuels are sold for use for certain vessels, prior to repeal by Pub. L. 94–455, title XIX, § 1904(a)(1)(D), Oct. 4, 1976, 90 Stat. 1811.
Amendments
2018—Subsec. (b)(1)(C). Pub. L. 115–141, § 401(b)(40), struck out subpar. (C) which read as follows: “the deficit reduction rate.” Subsec. (b)(2)(C). Pub. L. 115–141, § 401(b)(41), struck out subpar. (C) which read as follows: “The deficit reduction rate is— “(i) 3.3 cents per gallon after
December 31, 2004, and before
July 1, 2005, “(ii) 2.3 cents per gallon after
June 30, 2005, and before
January 1, 2007, and “(iii) 0 after
December 31, 2006.” 2014—Subsec. (b)(2)(A). Pub. L. 113–295 amended subpar. (A) generally, substituting “The Inland Waterways Trust Fund financing rate is 29 cents per gallon.” for “The Inland Waterways Trust Fund financing rate is the rate determined in accordance with the following table:” and accompanying table of rates. 2007—Subsec. (b)(3). Pub. L. 110–172 amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply to the use of any fuel if tax under section 4041(d) was imposed on the sale of such fuel or is imposed on such use.” 2004—Subsec. (b)(2)(C). Pub. L. 108–357 amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “The deficit reduction rate is 4.3 cents per gallon.” 1993—Subsec. (b)(1)(C). Pub. L. 103–66, § 13241(d)(1), added subpar. (C). Subsec. (b)(2)(C). Pub. L. 103–66, § 13241(d)(2), added subpar. (C). 1988—Subsec. (b)(2). Pub. L. 100–647 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “For purposes of paragraph (1)— “(A) the Inland Waterways Trust Fund financing rate is 10 cents a gallon, and “(B) the Leaking Underground Storage Tank Trust Fund financing rate is 0.1 cents a gallon.” 1986—Subsec. (b). Pub. L. 99–499 and Pub. L. 99–662 both amended subsec. (b) generally, effective Jan. 1, 1987. Pub. L. 100–647, § 2002(a)(1) (see
Construction
of 1986
Amendments
note below), provided that for purposes of this section, the amendment made by Pub. L. 99–499 be treated as enacted after the amendment made by Pub. L. 99–662. Prior to amendment by Pub. L. 99–499 and Pub. L. 99–662, subsec. (b) read as follows: “If the use occurs—The tax is— After
September 30, 1980 and before
October 1, 19814 cents a gallon After
September 30, 1981 and before
October 1, 19836 cents a gallon After
September 30, 1983 and before
October 1, 19858 cents a gallon After
September 30, 198510 cents a gallon”.
Statutory Notes and Related Subsidiaries
Effective Date
of 2014 Amendment Pub. L. 113–295, div. B, title II, § 205(b), Dec. 19, 2014, 128 Stat. 4065, provided that: “The amendment made by this section [amending this section] shall apply to fuel used after March 31, 2015.”
Effective Date
of 2007 AmendmentAmendment by Pub. L. 110–172 effective as if included in the provisions of the Energy Policy Act of 2005, Pub. L. 109–58, to which such amendment relates, see section 6(e) of Pub. L. 110–172, set out as a note under section 30C of this title.
Effective Date
of 2004 AmendmentAmendment by Pub. L. 108–357 effective Jan. 1, 2005, see section 241(c) of Pub. L. 108–357, set out as a note under section 4041 of this title.
Effective Date
of 1993 AmendmentAmendment by Pub. L. 103–66 effective Oct. 1, 1993, see section 13241(g) of Pub. L. 103–66, set out as a note under section 4041 of this title.
Effective Date
of 1988 Amendment Pub. L. 100–647, title II, § 2002(d), Nov. 10, 1988, 102 Stat. 3597, as amended by Pub. L. 101–239, title VII, § 7812(b), Dec. 19, 1989, 103 Stat. 2412, provided that: “The
Amendments
made by subsections (b) and (c) [amending section 4462 of this title and provisions set out as a note under section 4461 of this title] shall take effect as if included in the provision of the Harbor Maintenance Revenue Act of 1986 [Pub. L. 99–662, title XIV] to which it relates, and the amendment made by subsection (a)(2) [amending this section] shall take effect as if included in the amendment made by section 521(a)(3) of the Superfund Revenue Act of 1986 [Pub. L. 99–499, title V].”
Effective Date
of 1986
Amendments
Pub. L. 99–662, title XIV, § 1404(c), Nov. 17, 1986, 100 Stat. 4271, provided that: “The
Amendments
made by this section [amending this section and section 1804 of Title 33, Navigation and Navigable Waters] shall take effect on January 1, 1987.” Amendment by Pub. L. 99–499 effective Jan. 1, 1987, see section 521(e) of Pub. L. 99–499, set out as a note under section 4041 of this title.
Effective Date
Pub. L. 95–502, title II, § 202(d), Oct. 21, 1978, 92 Stat. 1697, provided that: “The
Amendments
made by this section [enacting this section and amending section 4293 of this title] shall take effect on October 1, 1980.”
Savings Provision
For provisions that nothing in amendment by Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title.
Construction
of 1986
Amendments
Pub. L. 100–647, title II, § 2002(a)(1), Nov. 10, 1988, 102 Stat. 3597, provided that: “For purposes of section 4042 of the 1986 Code, the amendment made by section 521(a)(3) of the Superfund Revenue Act of 1986 [Pub. L. 99–499, amending this section] shall be treated as enacted after the amendment made by section 1404(a) of the Harbor Maintenance Revenue Act of 1986 [Pub. L. 99–662, amending this section].”
Reference
Citations & Metadata
Citation
26 U.S.C. § 4042
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73