
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC6420]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
              CHAPTER 65--ABATEMENTS, CREDITS, AND REFUNDS
 
               Subchapter B--Rules of Special Application
 
Sec. 6420. Gasoline used on farms


(a) Gasoline

    Except as provided in subsection (g), if gasoline is used on a farm 
for farming purposes, the Secretary shall pay (without interest) to the 
ultimate purchaser of such gasoline the amount determined by 
multiplying--
        (1) the number of gallons so used, by
        (2) the rate of tax on gasoline under section 4081 which applied 
    on the date he purchased such gasoline.

(b) Time for filing claims; period covered

    Not more than one claim may be filed under this section by any 
person with respect to gasoline used during his taxable year, and no 
claim shall be allowed under this section with respect to gasoline used 
during any taxable year unless filed by such person not later than the 
time prescribed by law for filing a claim for credit or refund of 
overpayment of income tax for such taxable year. For purposes of this 
subsection, a person's taxable year shall be his taxable year for 
purposes of subtitle A.

(c) Meaning of terms

    For purposes of this section--

               (1) Use on a farm for farming purposes

        Gasoline shall be treated as used on a farm for farming purposes 
    only if used (A) in carrying on a trade or business, (B) on a farm 
    situated in the United States, and (C) for farming purposes.

                              (2) Farm

        The term ``farm'' includes stock, dairy, poultry, fruit, fur-
    bearing animal, and truck farms, plantations, ranches, nurseries, 
    ranges, greenhouses or other similar structures used primarily for 
    the raising of agricultural or horticultural commodities, and 
    orchards.

                        (3) Farming purposes

        Gasoline shall be treated as used for farming purposes only if 
    used--
            (A) by the owner, tenant, or operator of a farm, in 
        connection with cultivating the soil, or in connection with 
        raising or harvesting any agricultural or horticultural 
        commodity, including the raising, shearing, feeding, caring for, 
        training, and management of livestock, bees, poultry, and fur-
        bearing animals and wildlife, on a farm of which he is the 
        owner, tenant, or operator;
            (B) by the owner, tenant, or operator of a farm, in 
        handling, drying, packing, grading, or storing any agricultural 
        or horticultural commodity in its unmanufactured state; but only 
        if such owner, tenant or operator produced more than one-half of 
        the commodity which he so treated during the period with respect 
        to which claim is filed;
            (C) by the owner, tenant, or operator of a farm, in 
        connection with--
                (i) the planting, cultivating, caring for, or cutting of 
            trees, or
                (ii) the preparation (other than milling) of trees for 
            market,

        incidental to farming operations; or
            (D) by the owner, tenant, or operator of a farm, in 
        connection with the operation, management, conservation, 
        improvement, or maintenance of such farm and its tools and 
        equipment.

          (4) Certain farming use other than by owner, etc.

        In applying paragraph (3)(A) to a use on a farm for any purpose 
    described in paragraph (3)(A) by any person other than the owner, 
    tenant, or operator of such farm--
            (A) the owner, tenant, or operator of such farm shall be 
        treated as the user and ultimate purchaser of the gasoline, 
        except that
            (B) if--
                (i) the person so using the gasoline is an aerial or 
            other applicator of fertilizers or other substances and is 
            the ultimate purchaser of the gasoline, and
                (ii) the person described in subparagraph (A) waives (at 
            such time and in such form and manner as the Secretary shall 
            prescribe) his right to be treated as the user and ultimate 
            purchaser of the gasoline,

        then subparagraph (A) of this paragraph shall not apply and the 
        aerial or other applicator shall be treated as having used such 
        gasoline on a farm for farming purposes.

                            (5) Gasoline

        The term ``gasoline'' has the meaning given to such term by 
    section 4083(a).

(d) Exempt sales; other payments or refunds available

    No amount shall be payable under this section with respect to any 
gasoline which the Secretary determines was exempt from the tax imposed 
by section 4081. The amount which (but for this sentence) would be 
payable under this section with respect to any gasoline shall be reduced 
by any other amount which the Secretary determines is payable under this 
section, or is refundable under any provision of this title, to any 
person with respect to such gasoline.

(e) Applicable laws

                           (1) In general

        All provisions of law, including penalties, applicable in 
    respect of the tax imposed by section 4081 shall, insofar as 
    applicable and not inconsistent with this section, apply in respect 
    of the payments provided for in this section to the same extent as 
    if such payments constituted refunds of overpayments of the tax so 
    imposed.

               (2) Examination of books and witnesses

        For the purpose of ascertaining the correctness of any claim 
    made under this section, or the correctness of any payment made in 
    respect of any such claim, the Secretary shall have the authority 
    granted by paragraphs (1), (2), and (3) of section 7602(a) (relating 
    to examination of books and witnesses) as if the claimant were the 
    person liable for tax.

                  (3) Fractional parts of a dollar

        Section 7504 (granting the Secretary discretion with respect to 
    fractional parts of a dollar) shall not apply.

(f) Regulations

    The Secretary may by regulations prescribe the conditions, not 
inconsistent with the provisions of this section, under which payments 
may by made under this section.

(g) Income tax credit in lieu of payment

                (1) Persons not subject to income tax

        Payment shall be made under subsection (a), only to--
            (A) the United States or an agency or instrumentality 
        thereof, a State, a political subdivision of a State, or an 
        agency or instrumentality of one or more States or political 
        subdivisions, or
            (B) an organization exempt from tax under section 501(a) 
        (other than an organization required to make a return of the tax 
        imposed under subtitle A for its taxable year).

             (2) Allowance of credit against income tax

            For allowance of credit against the tax imposed by subtitle 
        A, see section 34.

[(h) Repealed. Pub. L. 103-66, title XIII, Sec. 13241(f)(5), Aug. 10, 
        1993, 107 Stat. 512]

(i) Cross references

            (1) For exemption from tax in case of special fuels used on 
        a farm for farming purposes, see section 4041(f).
            (2) For civil penalty for excessive claim under this 
        section, see section 6675.
            (3) For fraud penalties, etc., see chapter 75 (section 7201 
        and following, relating to crimes, other offenses, and 
        forfeitures).
            (4) For treatment of an Indian tribal government as a State 
        and \1\ a subdivision of an Indian tribal government as a 
        political subdivision of a State), see section 7871.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``(and''.
---------------------------------------------------------------------------

(Added Apr. 2, 1956, ch. 160, Sec. 1, 70 Stat. 87; amended Pub. L. 85-
859, title I, Sec. 163(d)(2), Sept. 2, 1958, 72 Stat. 1311; Pub. L. 89-
44, title VIII, Sec. 809(a), June 21, 1965, 79 Stat. 165; Pub. L. 91-
258, title II, Secs. 205(c)(7), 207(b), May 21, 1970, 84 Stat. 242, 248; 
Pub. L. 94-455, title XIX, Secs. 1906(a)(26), (b)(6)(A), (13)(A), Oct. 
4, 1976, 90 Stat. 1827, 1833, 1834; Pub. L. 95-458, Sec. 3(a), (c), Oct. 
14, 1978, 92 Stat. 1257; Pub. L. 97-424, title V, Secs. 511(f), 
516(b)(4), Jan. 6, 1983, 96 Stat. 2172, 2183; Pub. L. 97-473, title II, 
Sec. 202(b)(12), Jan. 14, 1983, 96 Stat. 2610; Pub. L. 98-369, div. A, 
title IV, Sec. 474(r)(38), July 18, 1984, 98 Stat. 846; Pub. L. 99-499, 
title V, Sec. 521(c)(1), Oct. 17, 1986, 100 Stat. 1778; Pub. L. 100-17, 
title V, Sec. 502(b)(6), Apr. 2, 1987, 101 Stat. 257; Pub. L. 101-239, 
title VII, Sec. 7841(d)(20), Dec. 19, 1989, 103 Stat. 2429; Pub. L. 101-
508, title XI, Sec. 11211(d)(5), Nov. 5, 1990, 104 Stat. 1388-427; Pub. 
L. 102-240, title VIII, Sec. 8002(b)(5), Dec. 18, 1991, 105 Stat. 2203; 
Pub. L. 103-66, title XIII, Secs. 13241(f)(5), 13242(d)(20), Aug. 10, 
1993, 107 Stat. 512, 524.)


                            Prior Provisions

    A prior section 6420 was renumbered section 6422 of this title.


                               Amendments

    1993--Subsec. (c)(5). Pub. L. 103-66, Sec. 13242(d)(20), substituted 
``section 4083(a)'' for ``section 4082(b)''.
    Subsec. (h). Pub. L. 103-66, Sec. 13241(f)(5), struck out heading 
and text of subsec. (h). Text read as follows: ``Except with respect to 
taxes imposed by section 4081 at the Leaking Underground Storage Tank 
Trust Fund financing rate, this section shall apply only with respect to 
gasoline purchased before October 1, 1999.''
    1991--Subsec. (h). Pub. L. 102-240 substituted ``1999'' for 
``1995''.
    1990--Subsec. (h). Pub. L. 101-508 substituted ``1995'' for 
``1993''.
    1989--Subsec. (e)(2). Pub. L. 101-239 substituted ``section 
7602(a)'' for ``section 7602''.
    1987--Subsec. (h). Pub. L. 100-17 substituted ``1993'' for ``1988''.
    1986--Subsec. (h). Pub. L. 99-499 substituted ``Except with respect 
to taxes imposed by section 4081 at the Leaking Underground Storage Tank 
Trust Fund financing rate, this section'' for ``This section''.
    1984--Subsec. (g)(2). Pub. L. 98-369 substituted ``section 34'' for 
``section 39''.
    1983--Subsec. (c)(4)(B). Pub. L. 97-424, Sec. 511(f), substituted 
provision that, if the person so using the gasoline is an aerial or 
other applicator of fertilizers or other substances and is the ultimate 
purchaser of the gasoline, and the person described in subparagraph (A) 
waives (at such time and in such form and manner as the Secretary shall 
prescribe) his right to be treated as the user and ultimate purchaser of 
the gasoline, then subparagraph (A) of this paragraph shall not apply 
and the aerial or other applicator shall be treated as having used such 
gasoline on a farm for farming purposes, for provision that, if the 
person so using the gasoline were an aerial applicator who was the 
ultimate purchaser of the gasoline and the person described in 
subparagraph (A) waived (at such time and in such form and manner as the 
Secretary was to prescribe) his right to be treated as the user and 
ultimate purchaser of the gasoline, then subparagraph (A) of this 
paragraph would not apply and the aerial applicator would be treated as 
having used such gasoline on a farm for farming purposes.
    Subsec. (h). Pub. L. 97-424, Sec. 516(b)(4), added subsec. (h). 
Former subsec. (h) redesignated (i).
    Subsec. (h)(4). Pub. L. 97-473 purported to add par. (4). See 
Amendment note below for subsec. (i)(4).
    Subsec. (i). Pub. L. 97-424, Sec. 516(b)(4), redesignated former 
subsec. (h) as (i).
    Subsec. (i)(4). Pub. L. 97-473 added par. (4). Notwithstanding the 
directory language that par. (4) be added to subsec. (h), it was added 
to subsec. (i) to reflect the probable intent of Congress and the 
intervening redesignation of subsec. (h) as (i) by Pub. L. 97-424.
    1978--Subsec. (c)(3)(A). Pub. L. 95-458, Sec. 3(c), struck out 
provision that if the use of gasoline is by any person other than the 
owner, tenant, or operator of a farm, then in applying subsec. (a) of 
this subparagraph, the owner, tenant, or operator of the farm on which 
gasoline or a liquid taxable under section 4041 is used would be treated 
as the user or ultimate purchaser of the gasoline or liquid.
    Subsec. (c)(4), (5). Pub. L. 95-458, Sec. 3(a), added par. (4) and 
redesignated former par. (4) as (5).
    1976--Subsec. (a). Pub. L. 94-455, Sec. 1906(a)(26) (C)(ii), 
(b)(13)(A), substituted ``subsection (g)'' for ``subsection (h)'' and 
struck out ``or his delegate'' after ``Secretary''.
    Subsec. (b). Pub. L. 94-455, Sec. 1906(a)(26)(A), among other 
changes, struck out provisions relating to gasoline used before July 1, 
1965, and struck out requirement that a person's first taxable year 
beginning after June 30, 1965, include the period after June 30, 1965, 
and before the beginning of that first taxable year.
    Subsec. (c)(3)(A). Pub. L. 94-455, Sec. 1906(b)(6)(A), among other 
changes, struck out ``and for purposes of section 6416(b)(2)(G)(ii) (but 
not for purposes of section 4041),'' after ``in applying subsection (a) 
to this subparagraph,'' and provision that if the use of gasoline is by 
any person other than the owner, tenant, or operator of the farm, then, 
for purposes of applying section 6416(b)(2)(G)(ii), any tax paid under 
section 4041 in respect of a liquid used on a farm for farming purposes 
be treated as having been paid by the owner, tenant, or operator of the 
farm on which such liquid is used.
    Subsec. (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ``or 
his delegate'' after ``Secretary''.
    Subsec. (e)(1). Pub. L. 94-455, Sec. 1906(a)(26)(B), substituted 
``apply in respect'' for ``apply in in respect''.
    Subsecs. (e)(2), (f). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck 
out ``or his delegate'' after ``Secretary''.
    Subsec. (g). Pub. L. 94-455, Sec. 1906(a)(26)(C)(i), (D), 
redesignated subsec. (h) as (g), struck out in par. (1) ``with respect 
to gasoline used after June 30, 1965,'' after ``subsection (a)'', and in 
par. (2) ``for gasoline used after June 30, 1965'' after ``subtitle A''. 
Former subsec. (g), which provided that this section applies only with 
respect to gasoline purchased after Dec. 31, 1955, was struck out.
    Subsecs. (h), (i). Pub. L. 94-455, Sec. 1906(a)(26)(C)(i), 
redesignated subsecs. (h) and (i) as (g) and (h), respectively.
    1970--Subsec. (b)(2)(B). Pub. L. 91-258, Sec. 207(b), substituted 
``a claim for credit or refund of overpayment of income tax'' for ``an 
income tax return'' after ``time prescribed by law for filing''.
    Subsec. (i)(1). Pub. L. 91-258, Sec. 205(c)(7)(A), (B), substituted 
``special fuels'' for ``diesel fuel and special motor fuels'' and 
``section 4041(f)'' for ``section 4041(d)'', respectively.
    1965--Subsec. (a). Pub. L. 89-44, Sec. 809(a)(1)(A), substituted 
``Except as provided in subsection (h), if'' for ``If''.
    Subsec. (b). Pub. L. 89-44, Sec. 809(a)(2), designated existing 
provisions as par. (1) and made it applicable to gasoline used before 
July 1, 1965, and added par. (2).
    Subsec. (d). Pub. L. 89-44, Sec. 809(a)(3), substituted ``payable'' 
for ``paid'' in first sentence.
    Subsecs. (h), (i). Pub. L. 89-44, Sec. 809(a)(1)(B), added subsec. 
(h) and redesignated former subsec. (h) as (i).
    1958--Subsec. (c)(3)(A). Pub. L. 85-859 substituted ``section 
6416(b)(2)(G)(ii)'' for ``section 6416(b)(2)(C)(ii)'' in two places in 
cl. (A).


                    Effective Date of 1993 Amendment

    Amendment by section 13241(f)(5) of Pub. L. 103-66 effective Oct. 1, 
1993, see section 13241(g) of Pub. L. 103-66, set out as a note under 
section 4041 of this title.
    Amendment by section 13242(d)(20) of Pub. L. 103-66 effective Jan. 
1, 1994, see section 13242(e) of Pub. L. 103-66, set out as a note under 
section 4041 of this title.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-499 effective Jan. 1, 1987, see section 
521(e) of Pub. L. 99-499, set out as a note under section 4041 of this 
title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable to taxable years beginning 
after Dec. 31, 1983, and to carrybacks from such years, see section 
475(a) of Pub. L. 98-369, set out as a note under section 21 of this 
title.


                    Effective Date of 1983 Amendments

    For effective date of amendment by Pub. L. 97-473, see section 204 
of Pub. L. 97-473, set out as an Effective Date note under section 7871 
of this title.
    Amendment by section 511(f) of Pub. L. 97-424 effective Apr. 1, 
1983, see section 511(h)(1) of Pub. L. 97-424, set out as a note under 
section 4041 of this title.


                    Effective Date of 1978 Amendment

    Section 3(d) of Pub. L. 95-458 provided that: ``The amendments made 
by this section [amending this section and section 6427 of this title] 
shall take effect on the first day of the first calendar quarter which 
begins more than 90 days after the date of the enactment of this Act 
[Oct. 14, 1978].''


                    Effective Date of 1976 Amendment

    Amendment by section 1906(a)(26), (b)(13)(A) of Pub. L. 94-455 
effective on first day of first month which begins more than 90 days 
after Oct. 4, 1976, see section 1906(d)(1) of Pub. L. 94-455, set out as 
a note under section 6013 of this title.
    Section 1906(b)(6)(B) of Pub. L. 94-455 provided that: ``The 
amendments made by subparagraph (A) [amending this section] shall apply 
with respect to the use of liquids after December 31, 1970.''


                    Effective Date of 1970 Amendment

    Amendment by Pub. L. 91-258 effective July 1, 1970, and applicable 
with respect to taxable years ending after June 30, 1970, respectively, 
see section 211(a), (b) of Pub. L. 91-258, set out as a note under 
section 4041 of this title.


                    Effective Date of 1965 Amendment

    Section 809(f) of Pub. L. 89-44 provided that: ``The amendments made 
by subsections (a) and (b) [amending this section and section 6421 of 
this title] shall apply with respect to gasoline used on or after July 
1, 1965. The amendments made by subsections (c) and (d) [renumbering 
section 39 as 40, enacting section 39 and amending sections 72, 874, 
1314, 1481, 6201, 6211, 6213, and 6401 of this title] shall apply to 
taxable years beginning on or after July 1, 1965.''


                    Effective Date of 1958 Amendment

    Amendment by Pub. L. 85-859 effective on first day of first calendar 
quarter which begins more than 60 days after Sept. 2, 1958, see section 
1(c) of Pub. L. 85-859, set out as a note under section 6415 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 34, 147, 451, 1274, 4041, 
4084, 6206, 6416, 6421, 6427, 6504, 6511, 6612, 6675, 7210, 7603, 7604, 
7605, 7609, 7610, 9502, 9503, 9508 of this title.
