§4612 Definitions and Special Rules

Summary

Sets rules and meanings for a tax on petroleum products and how some tax credits work. "Crude oil" includes condensates and natural gasoline. "Domestic crude oil" is oil from a U.S. well. "Petroleum product" includes crude oil. "United States" means the 50 States, the District of Columbia, Puerto Rico, U.S. possessions, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and U.S. foreign trade zones (and continental shelf rules apply). A "United States refinery" is any U.S. facility that refines crude. Natural gasoline made from natural gas at a refinery is treated as received there when made. "Premises" is used as in the tax rule about property income. A "barrel" is 42 U.S. gallons, and a partial barrel is taxed in the same fraction as a full barrel. Only one tax can apply to the same petroleum product if an earlier tax was already paid. A refinery operator who takes crude from a pipeline and later puts some back can get a tax credit equal to the tax rate times the barrels returned; oil put back is treated as untaxed. Taxpayers can get credits for prior payments made before January 1, 1987, into certain oil liability funds (and for some Trans‑Alaska Pipeline payments if transferred into the Oil Spill Liability Trust Fund), with affiliated companies treated as one taxpayer. There is also an income tax credit for unused Trans‑Alaska Pipeline payments, subject to limits based on what would have been allowed earlier. The Treasury will pay the cost of those credits from the Oil Spill Liability Trust Fund, but transfers cannot reduce that fund below $1,000,000,000. Unused credit amounts cannot be carried back to tax years on or before the enactment date. Rules in another law about Puerto Rico and the Virgin Islands do not apply to this tax.