Diesel-Water Fuel Emulsion Reduced Rate

§ 4081. Imposition of tax(a) Tax imposed(1) Tax on removal, entry, or sale(A) In generalThere is hereby imposed a tax at the rate specified in paragraph (2) on—(i) the removal of a taxable fuel from any refinery, (ii) the removal of a taxable fuel from any terminal, (iii) the entry into the United States of any taxable fuel for consumption, use, or warehousing, and (iv) the sale of a taxable fuel to any person who is not registered under section 4101 unless there was a prior taxable removal or entry of such fuel under clause (i), (ii), or (iii). (B) Exemption for bulk transfers to registered terminals or refineries(i) In generalThe tax imposed by this paragraph shall not apply to any removal or entry of a taxable fuel transferred in bulk by pipeline or vessel to a terminal or refinery if the person removing or entering the taxable fuel, the operator of such pipeline or vessel (except as provided in clause (ii)), and the operator of such terminal or refinery are registered under section 4101. (ii) Nonapplication of registration to vessel operators entering by deep-draft vesselFor purposes of clause (i), a vessel operator is not required to be registered with respect to the entry of a taxable fuel transferred in bulk by a vessel described in section 4042(c)(1). (2) Rates of tax(A) In generalThe rate of the tax imposed by this section is—(i) in the case of gasoline other than aviation gasoline, 18.3 cents per gallon, (ii) in the case of aviation gasoline, 19.3 cents per gallon, and (iii) in the case of diesel fuel or kerosene, 24.3 cents per gallon. (B) Leaking Underground Storage Tank Trust Fund taxThe rates of tax specified in subparagraph (A) shall each be increased by 0.1 cent per gallon. The increase in tax under this subparagraph shall in this title be referred to as the Leaking Underground Storage Tank Trust Fund financing rate. (C) Taxes imposed on fuel used in aviationIn the case of kerosene which is removed from any refinery or terminal directly into the fuel tank of an aircraft for use in aviation, the rate of tax under subparagraph (A)(iii) shall be—(i) in the case of use for commercial aviation by a person registered for such use under section 4101, 4.3 cents per gallon, and (ii) in the case of use for aviation not described in clause (i), 21.8 cents per gallon. (D) Diesel-water fuel emulsionIn the case of diesel-water fuel emulsion at least 14 percent of which is water and with respect to which the emulsion additive is registered by a United States manufacturer with the Environmental Protection Agency pursuant to section 211 of the Clean Air Act (as in effect on March 31, 2003), subparagraph (A)(iii) shall be applied by substituting “19.7 cents” for “24.3 cents”. The preceding sentence shall not apply to the removal, sale, or use of diesel-water fuel emulsion unless the person so removing, selling, or using such fuel is registered under section 4101.