26 U.S.C. § 6426 — Credit for alcohol fuel, biodiesel, and al-

Page 3649 TITLE 26—INTERNAL REVENUE CODE § 6426 on a consolidated basis or expects to make a consolidated return for the taxable year, this section shall apply only to such extent and sub- ject to such conditions, limitations, and excep- tions as the Secretary may by regulations pre- scribe. (Added Pub. L. 90–364, title I, § 103(d)(1), June 28, 1968, 82 Stat. 262; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 99–499, title V, § 516(b)(4)(C), Oct. 17, 1986, 100 Stat. 1771; Pub. L. 99–514, title VII, § 701(d)(2), Oct. 22, 1986, 100 Stat. 2342; Pub. L. 100–203, title X, § 10301(b)(4), Dec. 22, 1987, 101 Stat. 1330–429; Pub. L. 113–295, div. A, title II, § 221(a)(12)(J), Dec. 19, 2014, 128 Stat. 4039; Pub. L. 114–41, title II, § 2006(a)(2)(E), July 31, 2015, 129 Stat. 457; Pub. L. 115–97, title I, §§ 12001(b)(17), 13001(b)(2)(P), 14401(d)(3), Dec. 22, 2017, 131 Stat. 2094, 2097, 2233; Pub. L. 115–141, div. U, title IV, § 401(a)(293), Mar. 23, 2018, 132 Stat. 1198; Pub. L. 117–169, title I, § 10101(a)(4)(F), Aug. 16, 2022, 136 Stat. 1822.) Editorial Notes AMENDMENTS 2022—Subsec. (c)(1)(A). Pub. L. 117–169 amended sub- par. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘‘(A) the sum of— ‘‘(i) the tax imposed by section 11, or subchapter L of chapter 1, whichever is applicable, plus ‘‘(ii) the tax imposed by section 59A, over’’. 2018—Subsec. (c)(1)(A). Pub. L. 115–141, which directed amendment of subpar. (A) by substituting ‘‘the sum’’ for ‘‘The sum’’, could not be executed because ‘‘The sum’’ no longer appeared after the amendments made by Pub. L. 115–97. See 2017 Amendment notes below. 2017—Subsec. (c)(1)(A). Pub. L. 115–97, § 14401(d)(3), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘‘the tax imposed by section 11 or subchapter L of chapter 1, whichever is applicable, over’’. Pub. L. 115–97, § 13001(b)(2)(P), struck out ‘‘or 1201(a),’’ after ‘‘by section 11’’. Pub. L. 115–97, § 12001(b)(17), amended subpar. (A) gen- erally. Prior to amendment, subpar. (A) read as follows: ‘‘The sum of— ‘‘(i) the tax imposed by section 11 or 1201(a), or sub- chapter L of chapter 1, whichever is applicable, plus ‘‘(ii) the tax imposed by section 55, over’’. 2015—Subsec. (a)(1). Pub. L. 114–41 substituted ‘‘fourth month’’ for ‘‘third month’’. 2014—Subsec. (c)(1)(A). Pub. L. 113–295 inserted ‘‘plus’’ at end of cl. (i), substituted ‘‘over’’ for ‘‘plus’’ at end of cl. (ii), and struck out cl. (iii) which read as follows: ‘‘the tax imposed by section 59A, over’’. 1987—Subsec. (c). Pub. L. 100–203 substituted ‘‘section 6655(h)’’ for ‘‘section 6655(g)’’. 1986—Subsec. (c)(1)(A). Pub. L. 99–514 amended subpar. (A) generally, restating existing provisions as cl. (i) and adding cl. (ii). Pub. L. 99–499 amended subsec. (c)(1)(A), as amended by the Tax Reform Act of 1986 (Pub. L. 99–514), by strik- ing out ‘‘plus’’ at end of cl. (i), substituting ‘‘plus’’ for ‘‘over’’ at end of cl. (ii), and adding cl. (iii). 1976—Subsecs. (a), (b), (d). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appear- ing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2022 AMENDMENT Amendment by Pub. L. 117–169 applicable to taxable years beginning after Dec. 31, 2022, see section 10101(f) of Pub. L. 117–169, set out as a note under section 11 of this title. EFFECTIVE DATE OF 2017 AMENDMENT Amendment by section 12001(b)(17) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 12001(c) of Pub. L. 115–97, set out as a note under section 11 of this title. Amendment by section 13001(b)(2)(P) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of Pub. L. 115–97, set out as a note under section 11 of this title. Amendment by section 14401(d)(3) of Pub. L. 115–97 ap- plicable to base erosion payments (as defined in section 59A(d) of this title) paid or accrued in taxable years be- ginning after Dec. 31, 2017, see section 14401(e) of Pub. L. 115–97, set out as a note under section 26 of this title. EFFECTIVE DATE OF 2015 AMENDMENT Amendment by Pub. L. 114–41 applicable to returns for taxable years beginning after Dec. 31, 2015, with spe- cial rule for certain C corporations, see section 2006(a)(3) of Pub. L. 114–41, set out as a note under sec- tion 170 of this title. EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–203 applicable to taxable years beginning after Dec. 31, 1987, see section 10301(c) of Pub. L. 100–203, set out as a note under section 585 of this title. EFFECTIVE DATE OF 1986 AMENDMENTS Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain excep- tions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an Effective Date note under section 55 of this title. Amendment by Pub. L. 99–499 applicable to taxable years beginning after Dec. 31, 1986, see section 516(c) of Pub. L. 99–499, set out as a note under section 26 of this title. EFFECTIVE DATE Section applicable with respect to taxable years be- ginning after Dec. 31, 1967, except as provided by sec- tion 104 of Pub. L. 90–364, set out as notes under sec- tions 6154 and 51 of this title, see section 103(f) of Pub. L. 90–364, set out as an Effective Date of 1968 Amend- ment note under section 6154 of this title. APPLICABILITY OF CERTAIN AMENDMENTS BY PUB. L. 99–514 IN RELATION TO TREATY OBLIGATIONS OF UNITED STATES For applicability of amendment by Pub. L. 99–514 not- withstanding any treaty obligation of the United States in effect on Oct. 22, 1986, see section 1012(aa)(2) of Pub. L. 100–647, set out as a note under section 861 of this title. § 6426. Credit for alcohol fuel, biodiesel, and al- ternative fuel mixtures (a) Allowance of credits There shall be allowed as a credit— (1) against the tax imposed by section 4081 an amount equal to the sum of the credits de- scribed in subsections (b), (c), (e), and (k), and (2) against the tax imposed by section 4041 an amount equal to the sum of the credits de- scribed in subsection (d). No credit shall be allowed in the case of the credits described in subsections (d) and (e) un- less the taxpayer is registered under section 4101. Page 3650 TITLE 26—INTERNAL REVENUE CODE § 6426 (b) Alcohol fuel mixture credit (1) In general For purposes of this section, the alcohol fuel mixture credit is the product of the applicable amount and the number of gallons of alcohol used by the taxpayer in producing any alcohol fuel mixture for sale or use in a trade or busi- ness of the taxpayer. (2) Applicable amount For purposes of this subsection— (A) In general Except as provided in subparagraphs (B) and (C), the applicable amount is— (i) in the case of calendar years begin- ning before 2009, 51 cents, and (ii) in the case of calendar years begin- ning after 2008, 45 cents. (B) Mixtures not containing ethanol In the case of an alcohol fuel mixture in which none of the alcohol consists of eth- anol, the applicable amount is 60 cents. (C) Reduction delayed until annual produc- tion or importation of 7,500,000,000 gal- lons In the case of any calendar year beginning after 2008, if the Secretary makes a deter- mination described in section 40(h)(3)(B) with respect to all preceding calendar years beginning after 2007, subparagraph (A)(ii) shall be applied by substituting ‘‘51 cents’’ for ‘‘45 cents’’. (3) Alcohol fuel mixture For purposes of this subsection, the term ‘‘alcohol fuel mixture’’ means a mixture of al- cohol and a taxable fuel which— (A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or (B) is used as a fuel by the taxpayer pro- ducing such mixture. For purposes of subparagraph (A), a mixture produced by any person at a refinery prior to a taxable event which includes ethyl tertiary butyl ether or other ethers produced from al- cohol shall be treated as sold at the time of its removal from the refinery (and only at such time) to another person for use as a fuel. (4) Other definitions For purposes of this subsection— (A) Alcohol The term ‘‘alcohol’’ includes methanol and ethanol but does not include— (i) alcohol produced from petroleum, natural gas, or coal (including peat), or (ii) alcohol with a proof of less than 190 (determined without regard to any added denaturants). Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol. (B) Taxable fuel The term ‘‘taxable fuel’’ has the meaning given such term by section 4083(a)(1). (5) Volume of alcohol For purposes of determining under sub- section (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall include the volume of any denaturant (including gasoline) which is added under any formulas approved by the Secretary to the ex- tent that such denaturants do not exceed 2 percent of the volume of such alcohol (includ- ing denaturants). (6) Termination This subsection shall not apply to any sale, use, or removal for any period after December 31, 2011. (c) Biodiesel mixture credit (1) In general For purposes of this section, the biodiesel mixture credit is the product of the applicable amount and the number of gallons of biodiesel used by the taxpayer in producing any bio- diesel mixture for sale or use in a trade or business of the taxpayer. (2) Applicable amount For purposes of this subsection, the applica- ble amount is $1.00. (3) Biodiesel mixture For purposes of this section, the term ‘‘bio- diesel mixture’’ means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of ker- osene, which— (A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or (B) is used as a fuel by the taxpayer pro- ducing such mixture. (4) Certification for biodiesel No credit shall be allowed under this sub- section unless the taxpayer obtains a certifi- cation (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product pro- duced and the percentage of biodiesel and agri- biodiesel in the product. (5) Other definitions Any term used in this subsection which is also used in section 40A shall have the mean- ing given such term by section 40A. (6) Termination This subsection shall not apply to any sale, use, or removal for any period after December 31, 2024. (d) Alternative fuel credit (1) In general For purposes of this section, the alternative fuel credit is the product of 50 cents and the number of gallons of an alternative fuel or gasoline gallon equivalents of a nonliquid al- ternative fuel sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, sold by the taxpayer for use as a fuel in aviation, or so used by the taxpayer. (2) Alternative fuel For purposes of this section, the term ‘‘al- ternative fuel’’ means— (A) liquefied petroleum gas, (B) P Series Fuels (as defined by the Sec- retary of Energy under section 13211(2) of title 42, United States Code), Page 3651 TITLE 26—INTERNAL REVENUE CODE § 6426 (C) compressed or liquefied natural gas, (D) any liquid fuel which meets the re- quirements of paragraph (4) and which is de- rived from coal (including peat) through the Fischer-Tropsch process, (E) compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)), and (F) liquid fuel derived from biomass (as de- fined in section 45K(c)(3)). Such term does not include ethanol, methanol, biodiesel, or any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp. (3) Gasoline gallon equivalent For purposes of this subsection, the term ‘‘gasoline gallon equivalent’’ means, with re- spect to any nonliquid alternative fuel, the amount of such fuel having a Btu content of 124,800 (higher heating value). (4) Carbon capture requirement (A) In general The requirements of this paragraph are met if the fuel is certified, under such proce- dures as required by the Secretary, as hav- ing been derived from coal produced at a gasification facility which separates and se- questers not less than the applicable per- centage of such facility’s total carbon diox- ide emissions. (B) Applicable percentage For purposes of subparagraph (A), the ap- plicable percentage is— (i) 50 percent in the case of fuel produced after September 30, 2009, and on or before December 30, 2009, and (ii) 75 percent in the case of fuel pro- duced after December 30, 2009. (5) Termination This subsection shall not apply to any sale or use for any period after December 31, 2024. (e) Alternative fuel mixture credit (1) In general For purposes of this section, the alternative fuel mixture credit is the product of 50 cents and the number of gallons of alternative fuel used by the taxpayer in producing any alter- native fuel mixture for sale or use in a trade or business of the taxpayer. (2) Alternative fuel mixture For purposes of this section, the term ‘‘al- ternative fuel mixture’’ means a mixture of al- ternative fuel (other than a fuel described in subparagraph (A), (C), or (E) of subsection (d)(2)) and taxable fuel (as defined in subpara- graph (A), (B), or (C) of section 4083(a)(1)) which— (A) is sold by the taxpayer producing such mixture to any person for use as fuel, or (B) is used as a fuel by the taxpayer pro- ducing such mixture. (3) Termination This subsection shall not apply to any sale or use for any period after December 31, 2024. (f) Mixture not used as a fuel, etc. (1) Imposition of tax If— (A) any credit was determined under this section with respect to alcohol or biodiesel used in the production of any alcohol fuel mixture or biodiesel mixture, respectively, and (B) any person— (i) separates the alcohol or biodiesel from the mixture, or (ii) without separation, uses the mixture other than as a fuel, then there is hereby imposed on such person a tax equal to the product of the applicable amount and the number of gallons of such alcohol or biodiesel. (2) Applicable laws All provisions of law, including penalties, shall, insofar as applicable and not incon- sistent with this section, apply in respect of any tax imposed under paragraph (1) as if such tax were imposed by section 4081 and not by this section. (g) Coordination with exemption from excise tax Rules similar to the rules under section 40(c) shall apply for purposes of this section. (h) Denial of double benefit No credit shall be determined under sub- section (d) or (e) with respect to any fuel with respect to which credit may be determined under subsection (b) or (c) or under section 40, 40A, or 40B. (i) Limitation to fuels with connection to the United States (1) Alcohol No credit shall be determined under this sec- tion with respect to any alcohol which is pro- duced outside the United States for use as a fuel outside the United States. (2) Biodiesel and alternative fuels No credit shall be determined under this sec- tion with respect to any biodiesel or alter- native fuel which is produced outside the United States for use as a fuel outside the United States. For purposes of this subsection, the term ‘‘United States’’ includes any possession of the United States. (j) Energy equivalency determinations for lique- fied petroleum gas and liquefied natural gas For purposes of determining any credit under this section, any reference to the number of gal- lons of an alternative fuel or the gasoline gallon equivalent of such a fuel shall be treated as a reference to— (1) in the case of liquefied petroleum gas, the energy equivalent of a gallon of gasoline, as defined in section 4041(a)(2)(C), and (2) in the case of liquefied natural gas, the energy equivalent of a gallon of diesel, as de- fined in section 4041(a)(2)(D). (k) Sustainable aviation fuel credit (1) In general For purposes of this section, the sustainable aviation fuel credit for the taxable year is, with respect to any sale or use of a qualified mixture, an amount equal to the product of— Page 3652 TITLE 26—INTERNAL REVENUE CODE § 6426 (A) the number of gallons of sustainable aviation fuel in such mixture, multiplied by (B) the sum of— (i) $1.25, plus (ii) the applicable supplementary amount with respect to such sustainable aviation fuel. (2) Definitions Any term used in this subsection which is also used in section 40B shall have the mean- ing given such term by section 40B. (3) Registration requirement For purposes of this subsection, rules simi- lar to the rules of section 40B(f) shall apply. (Added Pub. L. 108–357, title III, § 301(a), Oct. 22, 2004, 118 Stat. 1459; amended Pub. L. 109–58, title XIII, § 1344(a), Aug. 8, 2005, 119 Stat. 1052; Pub. L. 109–59, title XI, §§ 11113(b)(1)–(3)(A), 11151(e)(2), Aug. 10, 2005, 119 Stat. 1947, 1948, 1969; Pub. L. 110–172, § 5(a)(2), (3), Dec. 29, 2007, 121 Stat. 2479; Pub. L. 110–234, title XV, §§ 15331(b), 15332(b), May 22, 2008, 122 Stat. 1516; Pub. L. 110–246, § 4(a), title XV, §§ 15331(b), 15332(b), June 18, 2008, 122 Stat. 1664, 2278; Pub. L. 110–343, div. B, title II, §§ 202(a), (b)(2), 203(c)(1), 204(a)(1), (2), (b), (c), Oct. 3, 2008, 122 Stat. 3832, 3834; Pub. L. 111–312, title VII, §§ 701(b)(1), 704(a), (b), 708(b)(1), Dec. 17, 2010, 124 Stat. 3310–3312; Pub. L. 112–240, title IV, §§ 405(b)(1), 412(a), Jan. 2, 2013, 126 Stat. 2340, 2343; Pub. L. 113–295, div. A, title I, § 160(a)(1), (b)(1), (c)(1), Dec. 19, 2014, 128 Stat. 4022; Pub. L. 114–113, div. Q, title I, §§ 185(b)(1), 192(a)(1), title III, § 342(a), Dec. 18, 2015, 129 Stat. 3073, 3075, 3114; Pub. L. 115–123, div. D, title I, §§ 40407(b)(1), 40415(a)(1), Feb. 9, 2018, 132 Stat. 149, 152; Pub. L. 115–141, div. U, title IV, § 401(a)(294), Mar. 23, 2018, 132 Stat. 1198; Pub. L. 116–94, div. Q, title I, §§ 121(b)(1)(A), 133(a)(1), (b)(1), Dec. 20, 2019, 133 Stat. 3230, 3233; Pub. L. 116–260, div. EE, title I, § 147(a), Dec. 27, 2020, 134 Stat. 3055; Pub. L. 117–169, title I, §§ 13201(b)(1), (c), (d), 13203(d)(1), (2)(A), 13204(d)(1), (2), Aug. 16, 2022, 136 Stat. 1931, 1932, 1934, 1935, 1941.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. PRIOR PROVISIONS A prior section 6426, added Pub. L. 91–258, title II, § 206(c), May 21, 1970, 84 Stat. 245; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834, provided for a refund of aircraft use tax where plane transports for hire in foreign air commerce, prior to repeal by Pub. L. 97–248, title II, § 280(c)(2)(G), (d), Sept. 3, 1982, 96 Stat. 564, 565, applicable with respect to transportation beginning after Aug. 31, 1982. AMENDMENTS 2022—Subsec. (a)(1). Pub. L. 117–169, § 13203(d)(2)(A)(i), substituted ‘‘(e), and (k)’’ for ‘‘and (e)’’. Subsec. (c)(6). Pub. L. 117–169, § 13201(b)(1), substituted ‘‘December 31, 2024’’ for ‘‘December 31, 2022’’. Subsec. (d)(2)(D) to (G). Pub. L. 117–169, § 13204(d)(1), redesignated subpars. (E) to (G) as (D) to (F), respec- tively, and struck out former subpar. (D) which read as follows: ‘‘liquefied hydrogen,’’. Subsec. (d)(5). Pub. L. 117–169, § 13201(c), substituted ‘‘December 31, 2024’’ for ‘‘December 31, 2021’’. Subsec. (e)(2). Pub. L. 117–169, § 13204(d)(2), substituted ‘‘(E)’’ for ‘‘(F)’’ in introductory provisions. Subsec. (e)(3). Pub. L. 117–169, § 13201(d), substituted ‘‘December 31, 2024’’ for ‘‘December 31, 2021’’. Subsec. (h). Pub. L. 117–169, § 13203(d)(2)(A)(ii), sub- stituted ‘‘under section 40, 40A, or 40B’’ for ‘‘under sec- tion 40 or 40A’’. Subsec. (k). Pub. L. 117–169, § 13203(d)(1), added subsec. (k). 2020—Subsecs. (d)(5), (e)(3). Pub. L. 116–260 substituted ‘‘December 31, 2021’’ for ‘‘December 31, 2020’’. 2019—Subsec. (c)(6). Pub. L. 116–94, § 121(b)(1)(A), sub- stituted ‘‘December 31, 2022’’ for ‘‘December 31, 2017’’. Subsec. (d)(5). Pub. L. 116–94, § 133(a)(1), substituted ‘‘December 31, 2020’’ for ‘‘December 31, 2017’’. Subsec. (e)(2). Pub. L. 116–94, § 133(b)(1), in introduc- tory provisions, substituted ‘‘mixture of alternative fuel (other than a fuel described in subparagraph (A), (C), or (F) of subsection (d)(2))’’ for ‘‘mixture of alter- native fuel’’. Subsec. (e)(3). Pub. L. 116–94, § 133(a)(1), substituted ‘‘December 31, 2020’’ for ‘‘December 31, 2017’’. 2018—Subsec. (b)(2)(A)(ii). Pub. L. 115–141 substituted ‘‘cents.’’ for ‘‘cents..’’ Subsec. (c)(6). Pub. L. 115–123, § 40407(b)(1), substituted ‘‘December 31, 2017’’ for ‘‘December 31, 2016’’. Subsecs. (d)(5), (e)(3). Pub. L. 115–123, § 40415(a)(1), sub- stituted ‘‘December 31, 2017’’ for ‘‘December 31, 2016’’. 2015—Subsec. (c)(6). Pub. L. 114–113, § 185(b)(1), sub- stituted ‘‘December 31, 2016’’ for ‘‘December 31, 2014’’. Subsecs. (d)(5), (e)(3). Pub. L. 114–113, § 192(a)(1), sub- stituted ‘‘December 31, 2016’’ for ‘‘December 31, 2014’’. Subsec. (j). Pub. L. 114–113, § 342(a), added subsec. (j). 2014—Subsec. (c)(6). Pub. L. 113–295, § 160(a)(1), sub- stituted ‘‘December 31, 2014’’ for ‘‘December 31, 2013’’. Subsecs. (d)(5), (e)(3). Pub. L. 113–295, § 160(c)(1), which directed striking out ‘‘(September 30, 2014 in the case of any sale or use involving liquefied hydrogen)’’, was exe- cuted by striking out ‘‘(September 30, 2014, in the case of any sale or use involving liquefied hydrogen)’’ before period at end, to reflect the probable intent of Con- gress. Pub. L. 113–295, § 160(b)(1), substituted ‘‘December 31, 2014’’ for ‘‘December 31, 2013’’. 2013—Subsec. (c)(6). Pub. L. 112–240, § 405(b)(1), sub- stituted ‘‘December 31, 2013’’ for ‘‘December 31, 2011’’. Subsecs. (d)(5), (e)(3). Pub. L. 112–240, § 412(a), sub- stituted ‘‘December 31, 2013’’ for ‘‘December 31, 2011’’. 2010—Subsec. (b)(6). Pub. L. 111–312, § 708(b)(1), sub- stituted ‘‘December 31, 2011’’ for ‘‘December 31, 2010’’. Subsec. (c)(6). Pub. L. 111–312, § 701(b)(1), substituted ‘‘December 31, 2011’’ for ‘‘December 31, 2009’’. Subsec. (d)(2). Pub. L. 111–312, § 704(b), substituted ‘‘biodiesel, or any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp’’ for ‘‘or biodiesel’’ in concluding provi- sions. Subsecs. (d)(5), (e)(3). Pub. L. 111–312, § 704(a), sub- stituted ‘‘December 31, 2011’’ for ‘‘December 31, 2009’’. 2008—Subsec. (b)(2)(A). Pub. L. 110–246, § 15331(b)(3), substituted ‘‘subparagraphs (B) and (C)’’ for ‘‘subpara- graph (B)’’ in introductory provisions. Pub. L. 110–246, § 15331(b)(1), substituted ‘‘the applica- ble amount is—’’ for ‘‘the applicable amount is 51 cents’’ and added cls. (i) and (ii). Subsec. (b)(2)(C). Pub. L. 110–246, § 15331(b)(2), added subpar. (C). Subsec. (b)(5), (6). Pub. L. 110–246, § 15332(b), added par. (5) and redesignated former par. (5) as (6). Subsec. (c)(2). Pub. L. 110–343, § 202(b)(2), amended par. (2) generally. Prior to amendment, text read as follows: ‘‘For purposes of this subsection— ‘‘(A) IN GENERAL.—Except as provided in subpara- graph (B), the applicable amount is 50 cents. ‘‘(B) AMOUNT FOR AGRI-BIODIESEL.—In the case of any biodiesel which is agri-biodiesel, the applicable amount is $1.00.’’ Subsec. (c)(6). Pub. L. 110–343, § 202(a), substituted ‘‘December 31, 2009’’ for ‘‘December 31, 2008’’. Page 3653 TITLE 26—INTERNAL REVENUE CODE § 6426 Subsec. (d)(1). Pub. L. 110–343, § 204(b)(2), inserted ‘‘sold by the taxpayer for use as a fuel in aviation,’’ after ‘‘motorboat,’’. Subsec. (d)(2)(E). Pub. L. 110–343, § 204(c)(2), inserted ‘‘which meets the requirements of paragraph (4) and which is’’ after ‘‘any liquid fuel’’. Subsec. (d)(2)(F), (G). Pub. L. 110–343, § 204(b)(1), added subpar. (F) and redesignated former subpar. (F) as (G). Subsec. (d)(4). Pub. L. 110–343, § 204(c)(1), added par. (4). Former par. (4) redesignated (5). Pub. L. 110–343, § 204(a)(1), substituted ‘‘December 31, 2009’’ for ‘‘September 30, 2009’’. Subsec. (d)(5). Pub. L. 110–343, § 204(c)(1), redesignated par. (4) as (5). Subsec. (e)(3). Pub. L. 110–343, § 204(a)(2), substituted ‘‘December 31, 2009’’ for ‘‘September 30, 2009’’. Subsec. (i). Pub. L. 110–343, § 203(c)(1), added subsec. (i). 2007—Subsec. (d)(2)(F). Pub. L. 110–172, § 5(a)(2), sub- stituted ‘‘fuel’’ for ‘‘hydrocarbons’’. Subsec. (h). Pub. L. 110–172, § 5(a)(3), added subsec. (h). 2005—Pub. L. 109–59, § 11113(b)(3)(A), substituted ‘‘alco- hol fuel, biodiesel, and alternative fuel’’ for ‘‘alcohol fuel and biodiesel’’ in section catchline. Subsec. (a). Pub. L. 109–59, § 11113(b)(1), reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, text read as follows: ‘‘There shall be allowed as a credit against the tax im- posed by section 4081 an amount equal to the sum of— ‘‘(1) the alcohol fuel mixture credit, plus ‘‘(2) the biodiesel mixture credit.’’ Subsec. (c)(6). Pub. L. 109–58 substituted ‘‘2008’’ for ‘‘2006’’. Subsec. (d). Pub. L. 109–59, § 11113(b)(2), added subsec. (d). Former subsec. (d) redesignated (f). Subsec. (d)(2)(F). Pub. L. 109–59, § 11151(e)(2), sub- stituted ‘‘section 45K(c)(3)’’ for ‘‘section 29(c)(3)’’. Subsecs. (e) to (g). Pub. L. 109–59, § 11113(b)(2), added subsec. (e) and redesignated former subsecs. (d) and (e) as (f) and (g), respectively. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2022 AMENDMENT Amendment by section 13201(b)(1), (c), (d) of Pub. L. 117–169 applicable to fuel sold or used after Dec. 31, 2021, see section 13201(f) of Pub. L. 117–169, set out as a note under section 40A of this title. Amendment by section 13203(d)(1), (2)(A) of Pub. L. 117–169 applicable to fuel sold or used after Dec. 31, 2022, see section 13203(f) of Pub. L. 117–169, set out as an Ef- fective Date note under section 40B of this title. Pub. L. 117–169, title I, § 13204(d)(3), Aug. 16, 2022, 136 Stat. 1941, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to fuel sold or used after December 31, 2022.’’ EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116–260, div. EE, title I, § 147(c), Dec. 27, 2020, 134 Stat. 3055, provided that: ‘‘The amendments made by this subsection [probably means ‘‘this section’’, amending this section and section 6427 of this title] shall apply to fuel sold or used after December 31, 2020.’’ EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116–94, div. Q, title I, § 121(b)(2), Dec. 20, 2019, 133 Stat. 3230, provided that: ‘‘The amendments made by this subsection [amending this section and section 6427 of this title] shall apply to fuel sold or used after December 31, 2017.’’ Pub. L. 116–94, div. Q, title I, § 133(a)(4), Dec. 20, 2019, 133 Stat. 3233, provided that: ‘‘The amendments made by this subsection [amending this section and section 6427 of this title] shall apply to fuel sold or used after December 31, 2017.’’ Pub. L. 116–94, div. Q, title I, § 133(b)(2), Dec. 20, 2019, 133 Stat. 3233, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to— ‘‘(A) fuel sold or used on or after the date of the en- actment of this Act [Dec. 20, 2019], and ‘‘(B) fuel sold or used before such date of enact- ment, but only to the extent that claims for the cred- it under section 6426(e) of the Internal Revenue Code of 1986 with respect to such sale or use— ‘‘(i) have not been paid or allowed as of such date, and ‘‘(ii) were made on or after January 8, 2018.’’ EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115–123, div. D, title I, § 40407(b)(3), Feb. 9, 2018, 132 Stat. 149, provided that: ‘‘The amendments made by this subsection [amending this section and section 6427 of this title] shall apply to fuel sold or used after De- cember 31, 2016.’’ Pub. L. 115–123, div. D, title I, § 40415(a)(3), Feb. 9, 2018, 132 Stat. 152, provided that: ‘‘The amendments made by this subsection [amending this section and section 6427 of this title] shall apply to fuel sold or used after De- cember 31, 2016.’’ EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–113, div. Q, title I, § 185(b)(3), Dec. 18, 2015, 129 Stat. 3073, provided that: ‘‘The amendments made by this subsection [amending this section and section 6427 of this title] shall apply to fuel sold or used after December 31, 2014.’’ Pub. L. 114–113, div. Q, title I, § 192(b), Dec. 18, 2015, 129 Stat. 3075, provided that: ‘‘The amendments made by this section [amending this section and section 6427 of this title] shall apply to fuel sold or used after Decem- ber 31, 2014.’’ Pub. L. 114–113, div. Q, title III, § 342(b), Dec. 18, 2015, 129 Stat. 3114, provided that: ‘‘The amendments made by this section [amending this section] shall apply to fuel sold or used after December 31, 2015.’’ EFFECTIVE DATE OF 2014 AMENDMENT Pub. L. 113–295, div. A, title I, § 160(d), Dec. 19, 2014, 128 Stat. 4022, provided that: ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section [amending this section and section 6427 of this title] shall apply to fuel sold or used after December 31, 2013. ‘‘(2) LIQUEFIED HYDROGEN.—The amendments made by subsection (c) [amending this section and section 6427 of this title] shall apply to fuel sold or used after Sep- tember 30, 2014.’’ EFFECTIVE DATE OF 2013 AMENDMENT Amendment by section 405(b)(1) of Pub. L. 112–240 ap- plicable to fuel sold or used after Dec. 31, 2011, see sec- tion 405(c) of Pub. L. 112–240, set out as a note under section 40A of this title. Pub. L. 112–240, title IV, § 412(c), Jan. 2, 2013, 126 Stat. 2343, provided that: ‘‘The amendments made by this section [amending this section and section 6427 of this title] shall apply to fuel sold or used after December 31, 2011.’’ EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 701(b)(1) of Pub. L. 111–312 ap- plicable to fuel sold or used after Dec. 31, 2009, see sec- tion 701(d) of Pub. L. 111–312, set out as a note under section 40A of this title. Pub. L. 111–312, title VII, § 704(d), Dec. 17, 2010, 124 Stat. 3311, provided that: ‘‘The amendments made by this section [amending this section and section 6427 of this title] shall apply to fuel sold or used after Decem- ber 31, 2009.’’ Pub. L. 111–312, title VII, § 708(b)(2), Dec. 17, 2010, 124 Stat. 3312, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to periods after December 31, 2010.’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment by section 202(a), (b)(2) of Pub. L. 110–343 applicable to fuel produced, and sold or used, after Dec. Page 3654 TITLE 26—INTERNAL REVENUE CODE § 6426 31, 2008, see section 202(g)(1) of Pub. L. 110–343, set out as a note under section 40A of this title. Amendment by section 203(c)(1) of Pub. L. 110–343 ap- plicable to claims for credit or payment made on or after May 15, 2008, see section 203(d) of Pub. L. 110–343, set out as a note under section 40 of this title. Pub. L. 110–343, div. B, title II, § 204(d), Oct. 3, 2008, 122 Stat. 3835, provided that: ‘‘The amendments made by this section [amending this section and section 6427 of this title] shall apply to fuel sold or used after the date of the enactment of this Act [Oct. 3, 2008].’’ Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of Title 7, Agriculture. Amendment by section 15331(b) of Pub. L. 110–246 ef- fective June 18, 2008, see section 15331(c) of Pub. L. 110–246, set out as a note under section 40 of this title. Amendment by section 15332(b) of Pub. L. 110–246 ap- plicable to fuel sold or used after Dec. 31, 2008, see sec- tion 15332(c) of Pub. L. 110–246, set out as a note under section 40 of this title. EFFECTIVE DATE OF 2007 AMENDMENT Pub. L. 110–172, § 5(b), Dec. 29, 2007, 121 Stat. 2479, pro- vided that: ‘‘The amendments made by this section [amending this section and section 6427 of this title] shall take effect as if included in the provisions of the SAFETEA–LU [Pub. L. 109–59] to which they relate.’’ EFFECTIVE DATE OF 2005 AMENDMENT Amendment by section 11113(b)(1)–(3)(A) of Pub. L. 109–59 applicable to any sale or use for any period after Sept. 30, 2006, see section 11113(d) of Pub. L. 109–59, set out as a note under section 4041 of this title. Amendment by section 11151(e)(2) of Pub. L. 109–59 ef- fective as if included in the provision of the Energy Tax Incentives Act of 2005, Pub. L. 109–58, title XIII, to which such amendment relates, see section 11151(f)(3) of Pub. L. 109–59, set out as a note under section 38 of this title. EFFECTIVE DATE Section applicable to fuel sold or used after Dec. 31, 2004, see section 301(d)(1) of Pub. L. 108–357, set out as an Effective Date of 2004 Amendment note under sec- tion 40 of this title. SPECIAL RULE FOR 2022 Pub. L. 117–169, title I, § 13201(g), Aug. 16, 2022, 136 Stat. 1932, provided that: ‘‘In the case of any alter- native fuel credit properly determined under section 6426(d) of the Internal Revenue Code of 1986 for the pe- riod beginning on January 1, 2022, and ending with the close of the last calendar quarter beginning before the date of the enactment of this Act [Aug. 16, 2022], such credit shall be allowed, and any refund or payment at- tributable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Sec- retary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the en- actment of this Act providing for a one-time submis- sion of claims covering periods described in the pre- ceding sentence. Such guidance shall provide for a 180- day period for the submission of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with interest from such date deter- mined by using the overpayment rate and method under section 6621 of such Code.’’ SPECIAL RULES FOR 2018 AND 2019 Pub. L. 116–94, div. Q, title I, § 121(b)(3), Dec. 20, 2019, 133 Stat. 3230, provided that: ‘‘Notwithstanding any other provision of law, in the case of any biodiesel mix- ture credit properly determined under section 6426(c) of the Internal Revenue Code of 1986 for the period begin- ning on January 1, 2018, and ending with the close of the last calendar quarter beginning before the date of the enactment of this Act [Dec. 20, 2019], such credit shall be allowed, and any refund or payment attrib- utable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Sec- retary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the en- actment of this Act providing for a one-time submis- sion of claims covering periods described in the pre- ceding sentence. Such guidance shall provide for a 180- day period for the submission of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with interest from such date deter- mined by using the overpayment rate and method under section 6621 of such Code.’’ Pub. L. 116–94, div. Q, title I, § 133(a)(3), Dec. 20, 2019, 133 Stat. 3233, provided that: ‘‘Notwithstanding any other provision of law, in the case of any alternative fuel credit properly determined under section 6426(d) of the Internal Revenue Code of 1986 for the period begin- ning on January 1, 2018, and ending with the close of the last calendar quarter beginning before the date of the enactment of this Act [Dec. 20, 2019], such credit shall be allowed, and any refund or payment attrib- utable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Sec- retary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the en- actment of this Act providing for a one-time submis- sion of claims covering periods described in the pre- ceding sentence. Such guidance shall provide for a 180- day period for the submission of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with interest from such date deter- mined by using the overpayment rate and method under section 6621 of such Code.’’ NO INFERENCE Pub. L. 116–94, div. Q, title I, § 133(b)(3), Dec. 20, 2019, 133 Stat. 3234, provided that: ‘‘Nothing contained in this subsection [amending this section and enacting provi- sions set out as a note under this section] or the amendments made by this subsection shall be con- strued to create any inference as to a change in law or guidance in effect prior to enactment of this sub- section.’’ SPECIAL RULES FOR 2017 Pub. L. 115–123, div. D, title I, § 40407(b)(4), Feb. 9, 2018, 132 Stat. 149, provided that: ‘‘Notwithstanding any other provision of law, in the case of any biodiesel mix- ture credit properly determined under section 6426(c) of the Internal Revenue Code of 1986 for the period begin- ning on January 1, 2017, and ending on December 31, 2017, such credit shall be allowed, and any refund or payment attributable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the enactment of this Act [Feb. 9, 2018] providing for a one-time submission of claims covering periods described in the preceding sentence. Such guid- Page 3655 TITLE 26—INTERNAL REVENUE CODE § 6426 ance shall provide for a 180-day period for the submis- sion of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with in- terest from such date determined by using the overpay- ment rate and method under section 6621 of such Code.’’ Pub. L. 115–123, div. D, title I, § 40415(b), Feb. 9, 2018, 132 Stat. 152, provided that: ‘‘Notwithstanding any other provision of law, in the case of any alternative fuel credit properly determined under section 6426(d) of the Internal Revenue Code of 1986 for the period begin- ning on January 1, 2017, and ending on December 31, 2017, such credit shall be allowed, and any refund or payment attributable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the enactment of this Act [Feb. 9, 2018] providing for a one-time submission of claims covering periods described in the preceding sentence. Such guid- ance shall provide for a 180-day period for the submis- sion of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with in- terest from such date determined by using the overpay- ment rate and method under section 6621 of such Code.’’ SPECIAL RULES FOR 2015 Pub. L. 114–113, div. Q, title I, § 185(b)(4), Dec. 18, 2015, 129 Stat. 3073, provided that: ‘‘Notwithstanding any other provision of law, in the case of any biodiesel mix- ture credit properly determined under section 6426(c) of the Internal Revenue Code of 1986 for the period begin- ning on January 1, 2015, and ending on December 31, 2015, such credit shall be allowed, and any refund or payment attributable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the enactment of this Act [Dec. 18, 2015] providing for a one-time submission of claims cov- ering periods described in the preceding sentence. Such guidance shall provide for a 180-day period for the sub- mission of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with in- terest from such date determined by using the overpay- ment rate and method under section 6621 of such Code.’’ Pub. L. 114–113, div. Q, title I, § 192(c), Dec. 18, 2015, 129 Stat. 3075, provided that: ‘‘Notwithstanding any other provision of law, in the case of any alternative fuel credit properly determined under section 6426(d) of the Internal Revenue Code of 1986 for the period beginning on January 1, 2015, and ending on December 31, 2015, such credit shall be allowed, and any refund or pay- ment attributable to such credit (including any pay- ment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Sec- retary shall issue guidance within 30 days after the date of the enactment of this Act [Dec. 18, 2015] pro- viding for a one-time submission of claims covering pe- riods described in the preceding sentence. Such guid- ance shall provide for a 180-day period for the submis- sion of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with in- terest from such date determined by using the overpay- ment rate and method under section 6621 of such Code.’’ SPECIAL RULE FOR CERTAIN PERIODS DURING 2014 Pub. L. 113–295, div. A, title I, § 160(e), Dec. 19, 2014, 128 Stat. 4023, provided that: ‘‘Notwithstanding any other provision of law, in the case of— ‘‘(1) any biodiesel mixture credit properly deter- mined under section 6426(c) of the Internal Revenue Code of 1986 for periods after December 31, 2013, and before the date of the enactment of this Act [Dec. 19, 2014], and ‘‘(2) any alternative fuel credit properly determined under section 6426(d) of such Code for such periods, such credit shall be allowed, and any refund or pay- ment attributable to such credit (including any pay- ment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Sec- retary shall issue guidance within 30 days after the date of the enactment of this Act [Dec. 19, 2014] pro- viding for a one-time submission of claims covering pe- riods described in the preceding sentence. Such guid- ance shall provide for a 180-day period for the submis- sion of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with in- terest from such date determined by using the overpay- ment rate and method under section 6621 of such Code.’’ SPECIAL RULES FOR 2010 Pub. L. 111–312, title VII, § 701(c), Dec. 17, 2010, 124 Stat. 3310, provided that: ‘‘Notwithstanding any other provision of law, in the case of any biodiesel mixture credit properly determined under section 6426(c) of the Internal Revenue Code of 1986 for periods during 2010, such credit shall be allowed, and any refund or pay- ment attributable to such credit (including any pay- ment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Sec- retary shall issue guidance within 30 days after the date of the enactment of this Act [Dec. 17, 2010] pro- viding for a one-time submission of claims covering pe- riods during 2010. Such guidance shall provide for a 180- day period for the submission of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with interest from such date deter- mined by using the overpayment rate and method under section 6621 of such Code.’’ Pub. L. 111–312, title VII, § 704(c), Dec. 17, 2010, 124 Stat. 3311, provided that: ‘‘Notwithstanding any other provision of law, in the case of any alternative fuel credit or any alternative fuel mixture credit properly determined under subsection (d) or (e) of section 6426 of the Internal Revenue Code of 1986 for periods during 2010, such credit shall be allowed, and any refund or payment attributable to such credit (including any payment under section 6427(e) of such Code) shall be made, only in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall provide. Such Secretary shall issue guidance within 30 days after the date of the enactment of this Act [Dec. 17, 2010] providing for a one-time submission of claims cov- ering periods during 2010. Such guidance shall provide Page 3656 TITLE 26—INTERNAL REVENUE CODE § 6427 for a 180-day period for the submission of such claims (in such manner as prescribed by such Secretary) to begin not later than 30 days after such guidance is issued. Such claims shall be paid by such Secretary not later than 60 days after receipt. If such Secretary has not paid pursuant to a claim filed under this subsection within 60 days after the date of the filing of such claim, the claim shall be paid with interest from such date de- termined by using the overpayment rate and method under section 6621 of such Code.’’ § 6427. Fuels not used for taxable purposes (a) Nontaxable uses Except as provided in subsection (k), if tax has been imposed under paragraph (2) or (3) of sec- tion 4041(a) or section 4041(c) on the sale of any fuel and the purchaser uses such fuel other than for the use for which sold, or resells such fuel, the Secretary shall pay (without interest) to him an amount equal to— (1) the amount of tax imposed on the sale of the fuel to him, reduced by (2) if he uses the fuel, the amount of tax which would have been imposed under section 4041 on such use if no tax under section 4041 had been imposed on the sale of the fuel. (b) Intercity, local, or school buses (1) Allowance Except as otherwise provided in this sub- section and subsection (k), if any fuel other than gasoline (as defined in section 4083(a)) on the sale of which tax was imposed by section 4041(a) or 4081 is used in an automobile bus while engaged in— (A) furnishing (for compensation) pas- senger land transportation available to the general public, or (B) the transportation of students and em- ployees of schools (as defined in the last sen- tence of section 4221(d)(7)(C)), the Secretary shall pay (without interest) to the ultimate purchaser of such fuel an amount equal to the product of the number of gallons of such fuel so used multiplied by the rate at which tax was imposed on such fuel by section 4041(a) or 4081, as the case may be. (2) Reduction in refund in certain cases (A) In general Except as provided in subparagraphs (B) and (C), the rate of tax taken into account under paragraph (1) shall be 7.4 cents per gal- lon less than the aggregate rate at which tax was imposed on such fuel by section 4041(a) or 4081, as the case may be. (B) Exception for school bus transportation Subparagraph (A) shall not apply to fuel used in an automobile bus while engaged in the transportation described in paragraph (1)(B). (C) Exception for certain intracity transpor- tation Subparagraph (A) shall not apply to fuel used in any automobile bus while engaged in furnishing (for compensation) intracity pas- senger land transportation— (i) which is available to the general pub- lic, and (ii) which is scheduled and along regular routes, but only if such bus is a qualified local bus. (D) Qualified local bus For purposes of this paragraph, the term ‘‘qualified local bus’’ means any local bus— (i) which has a seating capacity of at least 20 adults (not including the driver), and (ii) which is under contract (or is receiv- ing more than a nominal subsidy) from any State or local government (as defined in section 4221(d)) to furnish such transpor- tation. (3) Limitation in case of nonscheduled inter- city or local buses Paragraph (1)(A) shall not apply in respect of fuel used in any automobile bus while en- gaged in furnishing transportation which is not scheduled and not along regular routes un- less the seating capacity of such bus is at least 20 adults (not including the driver). (4) Refunds for use of diesel fuel in certain intercity buses With respect to any fuel to which paragraph (2)(A) applies, if the ultimate purchaser of such fuel waives (at such time and in such form and manner as the Secretary shall pre- scribe) the right to payment under paragraph (1) and assigns such right to the ultimate ven- dor, then the Secretary shall pay the amount which would be paid under paragraph (1) to such ultimate vendor, but only if such ulti- mate vendor— (A) is registered under section 4101, and (B) meets the requirements of subpara- graph (A), (B), or (D) of section 6416(a)(1). (c) Use for farming purposes Except as provided in subsection (k), if any fuel on the sale of which tax was imposed under paragraph (2) or (3) of section 4041(a) or section 4041(c) is used on a farm for farming purposes (within the meaning of section 6420(c)), the Sec- retary shall pay (without interest) to the pur- chaser an amount equal to the amount of the tax imposed on the sale of the fuel. For purposes of this subsection, if fuel is used on a farm by any person other than the owner, tenant, or op- erator of such farm, the rules of paragraph (4) of section 6420(c) shall be applied (except that ‘‘liq- uid taxable under section 4041’’ shall be sub- stituted for ‘‘gasoline’’ each place it appears in such paragraph (4)). (d) Use by certain aircraft museums or in certain other aircraft uses Except as provided in subsection (k), if— (1) any gasoline on which tax was imposed by section 4081, or (2) any fuel on the sale of which tax was im- posed under section 4041, is used by an aircraft museum (as defined in sec- tion 4041(h)(2)) in an aircraft or vehicle owned by such museum and used exclusively for purposes set forth in section 4041(h)(2)(C), or is used in a helicopter or a fixed-wing aircraft for a purpose described in section 4041(l), the Secretary shall pay (without interest) to the ultimate purchaser of such gasoline or fuel an amount equal to the aggregate amount of the tax imposed on such gasoline or fuel.