Notice 2016-15: Aviation-grade kerosene, “secured airport terminal” procedures

Aviation-grade kerosene, “secured airport terminal”

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.

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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 use in commercial aviation, the tax rate is $0.044 per gallon.
  • For an exempt purpose or for use in foreign trade, the tax rate is zero ($0).
  • For use in noncommercial aviation, the tax rate is $0.219 per gallon. 

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).  

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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 |

Taylor Cortright | +1 (202) 533 6188 |

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