b'Fall 2022 MARKETER MEMBER AVOIDING IRS LIABILITYNews For Sale of Dyed Fuel to Private School Bus OperatorsWWashington D.C. - Ever since Congress passed the Jobs Creation Act of 2004 (H.R. 4520) a cloud of uncertainty has hung over the tax consequences of selling dyed fuel (diesel fuel or kerosene) to private school bus operators under contract with a state or local Mark S. Morgan, Esqgovernment. The Jobs Act prohibited the use of dyed fuel in in-PMAA Regulatorytercity buses. An intercity bus is defined as being available to the Counsel general public and either runs scheduled or non-scheduled routes in buses that seat more than 20 passengers. Instead, a qualifying intercity bus using clear, tax included diesel fuel is now provided with a 17 cpg credit with a taxable rate of 7.3 cpg, plus the nonrefundable $.001 for the Leaking Underground Storage Tank Trust Fund (LUST).This change creates a problem for marketers who sell dyed fuel for use in a privately owned school bus under contract with a state or local government that also qualifies as an intercity bus when used for private, for hire charter service. Due to this mix of pri-vate and public use, many believed that energy marketers could no longer sell dyed fuel to school bus operators who also engage in for-hire charter services. However, this is not the case. Energy marketers may sell dyed diesel fuel or kerosene to private school bus operators who also engage in private, for-hire charter services. However, the operator should have a supply of clear, tax included diesel fuel or kerosene on hand as well when a school bus is privately chartered. Typically, private for-hire charter service is associated with gambling trips to casinos, concerts or other non-school leisure activi-ties. A reduced federal tax rate of 17 cpg on clear diesel fuel or clear kerosene applies for such use if the bus has more than 20 seats and is available for hire to the general public (Note: the 1/10th of a cent Leaking Underground Storage Tank (LUST) tax is not refund-able.) A claim for 17-cents per gallon refund may be made by the registered ultimate vendor or the ultimate pur-chaser on IRS Form 8849 if clear fuel is used for a private, for-hire charter use. While IRS regulations hold all parties along the distribu-tion chain liable for using 34www.wpma.com / Fall 2022'