Ford_Forgotton
Full Access Member
Biodiesel is considered as a blended diesel fuel. The person that produces the blended diesel fuel, outside the bulk transfer/terminal system (blender), is liable for the tax which is imposed under IRC section 4081(b) upon sale or removal. Blended diesel fuel is any mixture of diesel fuel, with respect to which tax has been imposed and any other liquid(such as kerosene)which no tax has been imposed. The number of gallons of blended diesel fuel subject to the tax, is the difference between the total number of gallons of blended diesel fuel removed or sold, and the number of gallons of previously taxed diesel fuel used to produce the blended diesel fuel. An exclusion from tax on the "blended taxable fuel" mixture is provided in Treasury Regulations section 48.4081-1(c)(1)(ii) for minor blending if: during any calendar quarter the removal or sale of the mixture in aggregate by the blender is less than 400 gallons. The IRS Form is 720 and publication 510.