96 STAT. 2170
PUBLIC LAW 97-424—JAN. 6, 1983 "(B) used by any person as a fuel in a diesel-powered highway vehicle unless there was a taxable sale of such liquid under subparagraph (A). "(2) SPECIAL MOTOR FUELS.—There is hereby imposed a tax of 9 cents a gallon on benzol, benzene, naphtha, liquefied petroleum gas, casing head and natural gasoline, or any other liquid (other than kerosene, gsis oil, or fuel oil, or any product taxable under section 4081 or paragraph (1) of this subsection)— "(A) sold by any person to an owner, lessee, or other operator of a motor vehicle or motorboat for use as a fuel in such motor vehicle or motorboat, or "(B) used by any person as a fuel in a motor vehicle or motorboat unless there was a taxable sale of such liquid under subparagraph (A)." (b) EXEMPTION FOR METHANOL AND ETHANOL FUELS.—
26 USC 4041.
(1) IN GENERAL.—Section 4041 is amended by adding at the end of the subsection (b) inserted by subsection (c) of this section the following new paragraph: "(2) QUALIFIED METHANOL AND ETHANOL FUEL.—
(A) IN GENERAL.—No tax shall be imposed by subsection (a) on any qualified methanol or ethanol fuel. "(B) QUALIFIED METHANOL OR ETHANOL FUEL.—The term 'qualified methanol or ethanol fuel' means any liquid at least 85 percent of which consists of methanol, ethanol, or other alcohol produced from a substance other than petroleum or natural gas. "(C) TERMINATION.—On and after October 1, 1988, subparagraph (A) shall not apply." 26 USC 44E.
(2) COORDINATION WITH CREDIT.—Subsection (c) of section 44E
(relating to coordination of credit for alcohol used as a fuel with exemption from excise tax) is amended by striking out "section 4041(k) or 4081(c)" and inserting in lieu thereof "subsection (b)(2) or (k) of section 4041 or section 4081(c)". (c) EXEMPTION FOR OFF-HIGHWAY BUSINESS USE.—
26 USC 6421.
(1) GASOLINE.—Subsection (a) of section 6421 (relating to nonhighway use of gasoline) is amended by striking out the first sentence auid inserting in lieu thereof the following: "Except as provided in subsection (i), if gasoline is used in an off-highway business use, the Secretary shall pay (without interest) to the ultimate purchaser of such gasoline an amount equal to the amount determined by multiplying the number of gallons so used by the rate at which tax was imposed on such gasoline under section 4081."
26 USC 4041.
(2) DIESEL FUEL AND SPECIAL MOTOR FUELS.—Section 4041 is
amended by inserting after subsection (a) the following new subsection: "(b) EXEMPTION FOR OFF-HIGHWAY BUSINESS USE; EXEMPTION FOR QUALIFIED METHANOL AND ETHANOL FUEL.— "(1) EXEMPTION FOR OFF-HIGHWAY BUSINESS USE.—
"(A) IN GENERAL.—No tax shall be imposed by subsection (a) on liquids sold for use or used in an off-highway business use. "(B) TAX WHERE OTHER USE.— If a liquid on which no tax
was imposed by reason of subparagraph (A) is used otherwise than in an off-highway business use, a tax shall be imposed by paragraph (I)(B) or (2)(B) of subsection (a) (whichever is appropriate).
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