The IRS today released an advance version of Notice 2016-15 concerning requirements for designating a terminal located within a secure area of an airport as a “secured airport terminal” for purposes of the fuel excise taxes imposed under sections 4081 and 4082.
Notice 2016-15 [PDF 33 KB] also includes procedures for a terminal operator to request that a terminal be placed on the list of secured airport terminals.
Special rules apply with respect to the excise tax imposed on kerosene removed directly from the refinery or terminal into the fuel supply tank of an aircraft for use in aviation. If the kerosene is removed directly into the aircraft:
For purposes of the reduced rate of tax, refueler trucks may be treated as being part of the terminal if certain requirements are met. For the commercial aviation rate or for no tax to apply when a refueler truck is used, one requirement is that the terminal must be located within a secured area of an airport (“secured airport terminal”).
Notice 2016-15 sets forth the criteria for designation by the IRS of airport terminals as “secured airport terminals.” Among these requirements, the terminal operator must request that the terminal be so designated. The terminal operator must also be registered by the IRS. The kerosene that is received, stored, and removed must be exclusively for delivery into the fuel tank of an aircraft at the terminal. The terminal must have security measures that are designed to “resist access” to the terminal by unauthorized personnel and vehicles.
The IRS notice sets forth procedures for terminal operators to follow in requesting secured airport terminal status, and the process that the IRS will apply in considering and acting on these requests.
Today’s notice lists the current (as of March 8, 2016) secured airport terminals (note that this list has not been updated since 2005).
For airport terminals that are not on the IRS list of secured airport terminals, today’s notice provides procedures and requirements for applying for this status.
For airport terminals that are on the secured airport terminal list but have undergone certain changes—such as change in ownership, or change in fueling equipment or security measures—the operator needs to notify the IRS of these changes. Without such notification, today’s notice indicates that the IRS may revoke the terminal’s status, which could lead to an increased rate of tax on fuel at these locations.
For more information, contact a tax professional with KPMG’s Excise Tax Practice group:
Deborah Gordon | +1 (202) 533 5965 | firstname.lastname@example.org
Taylor Cortright | +1 (202) 533 6188 | email@example.com
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.