II 109th CONGRESS 1st Session S. 688 IN THE SENATE OF THE UNITED STATES April 4, 2005 Mr. Cochran (for himself, Mrs. Lincoln, and Mr. Lugar) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to clarify the excise tax exemptions for aerial applicators of fertilizers or other substances.

1.

Clarification of excise tax exemptions for agricultural aerial applicators

(a)

No waiver by farm owner, tenant, or operator necessary

Subparagraph (B) of section 6420(c)(4) of the Internal Revenue Code of 1986 (relating to certain farming use other than by owner, etc.) is amended to read as follows: (B) if the person so using the gasoline is an aerial or other applicator of fertilizers or other substances and is the ultimate purchaser of the gasoline, then subparagraph (A) of this paragraph shall not apply and the aerial or other applicator shall be treated as having used such gasoline on a farm for farming purposes. . (b)

Exemption includes fuel used between airfield and farm

Section 6420(c)(4) of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by adding at the end the following new flush sentence: For purposes of this paragraph, in the case of an aerial applicator, gasoline shall be treated as used on a farm for farming purposes if the gasoline is used for the direct flight between the airfield and 1 or more farms.. (c)

Exemption from tax on air transportation of persons for forestry purposes extended to Fixed-Wing aircraft

Subsection (f) of section 4261 of the Internal Revenue Code of 1986 (relating to tax on air transportation of persons) is amended to read as follows: (f)

Exemption for certain uses

No tax shall be imposed under subsection (a) or (b) on air transportation— (1) by helicopter for the purpose of transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas, or (2) by helicopter or by fixed-wing aircraft for the purpose of the planting, cultivation, cutting, or transportation of, or caring for, trees (including logging operations), but only if the helicopter or fixed-wing aircraft does not take off from, or land at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise use services provided pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code, during such use. In the case of helicopter transportation described in paragraph (1), this subsection shall be applied by treating each flight segment as a distinct flight. . (d)

Effective date

The amendments made by this section shall apply to fuel use or air transportation after the date of the enactment of this Act.