The measures will apply with respect to:
Currently, the law provides an excise tax exemption for diesel fuel used in or by a vehicle to generate electricity if more than half of the electricity generated is used for purposes other than the operation of the vehicle (e.g., to heat, cool or light the vehicle, or to prepare meals or operate entertainment systems for passengers of the vehicle).
The budget proposes to restrict the exemption so that it does not apply to fuel used to produce electricity in any vehicle (e.g., trains, ships, airplanes, tractor trailers), regardless of the purpose for which the electricity is used.
The law also provides an excise tax relief for fuel oil—including diesel fuel—that is consumed to produce heat for any purpose, including in industrial processes (e.g., diesel fuel used by a paving contractor in the production of asphalt).
The budget proposes to limit this relief to fuel oil that is consumed exclusively for providing heat to a home, building or similar structure, and is not consumed for generating heat in an industrial process.
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.