Short title

This Act may be cited as the

The Diesel Tax Fairness Act of 2008

Temporary reduction in excise tax on kerosene and diesel fuel to the rate applicable to gasoline

(a)

In general

Section 4081 of the Internal Revenue Code of 1986 (relating to imposition of tax on gasoline, diesel fuel, and kerosene) is amended by adding at the end the following new subsection:

(f)

Temporary reduction of tax on diesel fuel and kerosene (Other than aviation-grade kerosene)

(1)

In general

During the temporary reduction period— (A)the rate of tax applicable under subsection (a)(2)(A)(iii) shall be 18.3 cents, and (B)the rate of tax applicable under subsection (a)(2)(D) shall be 14.8 cents. (2)

Temporary reduction period

For purposes of this subsection, the temporary reduction period is the period— (A)beginning on the date of the enactment of this subsection, and (B)ending on December 31, 2010. (3)

Maintenance of trust fund deposits

In determining the amounts to be appropriated to any trust fund, an amount equal to the reduction in revenues to the Treasury by reason of a reduction under this subsection in any rate shall be treated as taxes received in the Treasury under such rate.

(b)

Effective date

The amendment made by this section shall take effect on the date of the enactment of this Act.

Floor stocks refunds

(a)

In general

If— (1)before the date of the enactment of this Act, a tax referred to in section 4081(f)(1) of the Internal Revenue Code of 1986 has been imposed on any liquid, and (2)on such date such liquid is held by a dealer and has not been used and is intended for sale,

there shall be credited or refunded (without interest) to the person who paid such tax (hereafter in this section referred to as the taxpayer) an amount equal to the excess of the tax paid by the taxpayer over the amount of such tax which would be imposed on such liquid had the taxable event occurred on such date.

(b)

Time for filing claims

No credit or refund shall be allowed or made under this section unless— (1)claim therefor is filed with the Secretary of the Treasury before the date which is 6 months after the date of the enactment of this Act, and (2)in any case where liquid is held by a dealer (other than the taxpayer) on the date of the enactment of this Act— (A)the dealer submits a request for refund or credit to the taxpayer before the date which is 3 months after such date, and (B)the taxpayer has repaid or agreed to repay the amount so claimed to such dealer or has obtained the written consent of such dealer to the allowance of the credit or the making of the refund. (c)

Exception for fuel held in retail stocks

No credit or refund shall be allowed under this section with respect to any liquid in retail stocks held at the place where intended to be sold at retail. (d)

Definitions

For purposes of this section, the terms dealer and held by a dealer have the respective meanings given to such terms by section 6412 of such Code; except that the term dealer includes a producer. (e)

Certain rules To apply

Rules similar to the rules of subsections (b) and (c) of section 6412 of such Code shall apply for purposes of this section.

Floor stocks tax

(a)

Imposition of tax

In the case of any taxable liquid which is held on the floor stocks tax date by any person, there is hereby imposed a floor stocks tax equal to the excess of the tax which would be imposed on such liquid under section 4041 or 4081 of the Internal Revenue Code of 1986 had the taxable event occurred on the floor stocks tax date over the tax paid under any such section on such liquid. (b)

Liability for tax and method of payment

(1)

Liability for tax

A person holding a liquid on the floor stocks tax date to which the tax imposed by subsection (a) applies shall be liable for such tax. (2)

Method of payment

The tax imposed by subsection (a) shall be paid in such manner as the Secretary shall prescribe. (3)

Time of payment

The tax imposed by subsection (a) shall be paid on or before the date which is 6 months after the floor stocks tax date. (c)

Definitions

For purposes of this section— (1)

Held by a person

A liquid shall be considered as held by a person if title thereto has passed to such person (whether or not delivery to the person has been made). (2)

Taxable liquid

The term taxable liquid means diesel fuel and kerosene (other than aviation-grade kerosene). (3)

Floor stocks date

The term floor stocks tax date means January 1, 2011. (4)

Secretary

The term Secretary means the Secretary of the Treasury. (d)

Exception for exempt uses

The tax imposed by subsection (a) shall not apply to taxable liquid held by any person exclusively for any use to the extent a credit or refund of the tax imposed by a section of the Code referred to in section 4081(a)(2) of such Code is allowable for such use. (e)

Exception for fuel held in vehicle tank

No tax shall be imposed by subsection (a) on taxable liquid held in the tank of a motor vehicle or motorboat. (f)

Exception for certain amounts of fuel

(1)

In general

No tax shall be imposed by subsection (a) on any liquid held on the floor stocks tax date by any person if the aggregate amount of liquid held by such person on such date does not exceed 2,000 gallons. The preceding sentence shall apply only if such person submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this paragraph. (2)

Exempt fuel

For purposes of paragraph (1), there shall not be taken into account fuel held by any person which is exempt from the tax imposed by subsection (a) by reason of subsection (d) or (e). (3)

Controlled groups

For purposes of this section— (A)

Corporations

(i)

In general

All persons treated as a controlled group shall be treated as 1 person. (ii)

Controlled group

The term controlled group has the meaning given to such term by subsection (a) of section 1563 of such Code; except that for such purposes the phrase more than 50 percent shall be substituted for the phrase at least 80 percent each place it appears in such subsection. (B)

Nonincorporated persons under common control

Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of persons under common control where 1 or more of such persons is not a corporation. (g)

Other laws applicable

All provisions of law, including penalties, applicable with respect to the taxes imposed by chapter 31 or 32 of such Code shall, insofar as applicable and not inconsistent with the provisions of this section, apply with respect to the floor stock taxes imposed by subsection (a) to the same extent as if such taxes were imposed by such chapter.