26 CFR 48.4042-1 - Tax on fuel used in commercial waterway transportation.
(a) In general. Section 4042(a) imposes an excise tax on the use of liquid fuel in the propulsion system of commercial transportation vessels while traveling on certain inland and intracoastal waterways (see § 48.4042-1 (f)). The tax applies generally to all types of vessels, including ships, barges, and tugboats. It is in addition to all other taxes imposed on the sale or use of fuel.
(b) Amount of tax. For the amount of tax, see section 4042(b).
(c) Person liable for tax. The person operating the vessel in which the propulsion fuel is consumed is the user of liquid fuel for purposes of section 4042(a). Thus, a person who operates (or whose employees operate) a vessel is responsible for filing returns and paying the tax. If a vessel owner (or lessee) contracts with an independent contractor to operate the vessel, the independent contractor is the user of liquid fuel for purposes of section 4042(a), regardless of who purchases the fuel.
(d) Time of use. Fuel is not taxed by section 4042(a) when put into a vessel's tanks. For purposes of section 4042(a), fuel is used when it is actually consumed by a vessel's engine.
(e) Liquid fuel. For purposes of the tax imposed under this section, liquid fuel means any liquid fuel including gasoline, diesel fuel, special motor fuel, or Bunker C residual fuel oil.
(f) Commercial waterway transportation - (1) In general. For purposes of section 4042(a) and § 48.4042-2(c)(1), the term “commercial waterway transportation” means the use of a vessel on the waterways specified in paragraphs (g) (1) through (27) of this section if:
(i) Use of the vessel is in the business of transporting property for compensation or hire, or
(ii) Use of the vessel is in transporting property in the business of the owner, lessee, or operator of the vessel (whether or not a fee is charged).
(2) Fishing vessels exception. A vessel does not transport property in the business of the owner, lessee, or operator, for purposes of paragraph (f)(1)(ii) of this section, by merely transporting fish or other aquatic animal life caught on the voyage. The tax imposed by section 4042(a) does not apply to fuel used by a fishing vessel while traveling to a fishing site, while engaged in fishing, or while returning from the fishing site with its catch. However, the tax applies to fuel used by a commercial vessel along the taxable waterways while traveling to pick up aquatic animal life caught by another vessel and while transporting the catch of such other vessel.
(g) Specified waterways. Only fuel used on those waterways specified in section 206 of the Inland Waterways Revenue Act of 1978 (specified waterways) is taxable. The specified waterways are as follows:
(1) Alabama-Coosa Rivers. From junction with the Tombigbee River at river mile (hereinafter referred to as RM) 0 to junction with the Coosa River at RM 314.
(2) Allegheny River. From confluence with the Monongahela River to form the Ohio River at RM 0 to the head of the existing project at East Brady, Pennsylvania, RM 72.
(3) Apalachicola-Chattachoochee and Flint Rivers. Apalachicola River from mouth at Apalachicola Bay (intersection with the Gulf Intracoastal Waterway) RM 0 to junction with Chattachoochee and Flint Rivers at RM 107.8. Chattachoochee River from junction with Apalachicola and Flint Rivers at RM 0 to Columbus, Georgia, at RM 155 and Flint River, from junction with Apalachicola and Chattachoochee Rivers at RM 0 to Bainbridge, Georgia, at RM 28.
(4) Arkansas River (McClellan-Kerr Arkansas River Navigation System). From junction with Mississippi River at RM 0 to port of Catoosa, Oklahoma, at RM 448.2.
(5) Atchafalaya River. From RM 0 at its intersection with the Gulf Intracoastal Waterway at Morgan City, Louisiana, upstream to junction with Red River at RM 116.8.
(6) Atlantic Intracoastal Waterway (A.I.W.W.). Two inland water routes approximately paralleling the Atlantic coast between Norfolk, Virginia, and Miami, Florida, for 1,192 miles via both the Albermarle and Chesapeake Canal and Great Dismal Swamp Canal routes. For vessels traveling along the A.I.W.W. no matter how short the distance, the A.I.W.W. includes the main channel, all alternate channels, and all adjoining bays and sounds, regardless of depth. However, vessels merely crossing the A.I.W.W. on route either to a coastal port or to a nonspecified waterway will not be treated as traveling on the A.I.W.W.
(7) Black Warrior-Tombigbee-Mobile Rivers. Black Warrior River System from RM 2.9, Mobile River (at Chickasaw Creek) to confluence with Tombigbee River at RM 45. Tombigbee River (to Demopolis at RM 215.4) to port of Birmingham, RM's 374 - 411 and upstream to head of navigation on Mulberry Fork (RM 429.6), Locust Fork (RM 407.8), and Sipsey Fork (RM 430.4).
(8) Columbia River (Columbia-Snake Rivers Inland Waterways). From The Dalles at RM 191.5 to Pasco, Washington (McNary Pool), at RM 330, Snake River from RM 0 at the mouth to RM 231.5 at Johnson Bar Landing, Idaho.
(9) Cumberland River: Junction with Ohio River at RM 0 to head of navigation, upstream to Carthage, Tennessee, at RM 313.5.
(10) Green and Barren Rivers. Green River from junction with the Ohio River at RM 0 to head of navigation at RM 149.1.
(11) Gulf Intracoastal Waterway (G.I.W.W.) From the mouth of St. Mark's River, Florida, to Brownsville, Texas, 1,134.5 miles. For vessels traveling along the G.I.W.W. no matter how short the distance, the G.I.W.W. includes the main channel, all alternate channels, and all adjoining bays and sounds, regardless of depth. However, vessels merely crossing the G.I.W.W. on route either to a coastal port or to a nonspecified waterway will not be treated as traveling on the G.I.W.W.
(12) Illinois Waterway. Illinois River from junction with the Mississippi River at RM 0 to the Des Plaines River and along the Des Plaines River to Lockport Lock and Dam at RM 291. Chicago Sanitary and Ship Canal from Lockport Lock and Dam at RM 291 to the South Branch Chicago River and along the South Branch Chicago River to Lake Street, Chicago at RM 325.5 near Chicago Harbor. Calumet-Sag Channel from junction with the Chicago Sanitary and Ship Canal to the Little Calumet River and along the Little Calumet and Calumet Rivers to turning basin 5, near the entrance to Lake Calumet, an additional 23.8 RMS. Total waterway distance approximately 350 RMs.
(13) Kanawha River. From junction with Ohio River at RM 0 to RM 90.6 at Deepwater, West Virginia.
(14) Kaskaskia River. From junction with the Mississippi River at RM 0 to RM 36.2 at Fayetteville, Illinois.
(15) Kentucky River. From junction with Ohio River at RM 0 to confluence of Middle and North Forks at RM 258.6.
(16) Lower Mississippi River. From Baton Rouge, Louisiana, RM 233.9 to Cairo, Illinois, RM 953.8.
(17) Upper Mississippi River From Cairo, Illinois, RM 953.8 to Minneapolis, Minnesota, RM 1,811.4.
(18) Missouri River. From junction with Mississippi River at RM 0 to Sioux City, Iowa, at RM 734.8.
(19) Monongahela River. From junction with Allegheny River to form the Ohio River at RM 0 to junction of the Tygart and West Fork Rivers, FairmontOhio River. From junction with the Mississippi River at RM 0 to junction of the Allegheny and Monongahela Rivers at Pittsburgh, Pennsylvania, at RM 981.
(21) Ouachita-Black Rivers. From the mouth of the Black River at its junction with the Red River at RM 0 to RM 351 at Camden, Arkansas.
(22) Pearl River. From junction of West Pearl River with the Rigolets at RM 0 to Bogalusa, Louisiana, RM 58.
(23) Red River. From RM 0 to the mouth of Cypress Bayou at RM 236.
(24) Tennessee River. From junction with Ohio River at RM 0 to confluence with Holstein and French Rivers at RM 652.
(25) Tennessee-Tombigbee Waterway. From its confluence with the Tennessee River to the Warrior River at Demopolis, Alabama.
(26) White River. From RM 9.8 to RM 255 at Newport, Arkansas.
(27) Willamette River. From RM 21 upstream of Portland, Oregon, to Harrisburg, Oregon, at RM 194.