[Federal Register Volume 62, Number 246 (Tuesday, December 23, 1997)]
[Proposed Rules]
[Page 67013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33250]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 52

[PS-158-86]
RIN 1545-AJ23


Petroleum Tax Imposed on Natural Gasoline

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Withdrawal of notice of proposed rulemaking.

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SUMMARY: This document withdraws a proposed regulation relating to the 
petroleum tax imposed on natural gasoline. The withdrawal affects 
persons that produce natural gasoline at fractionation facilities or 
receive natural gasoline produced at those facilities.

FOR FURTHER INFORMATION CONTACT: Ruth Hoffman, (202) 622-3130 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    Section 4611 imposed a tax on crude oil (including natural 
gasoline) received at a United States refinery. On April 26, 1993, a 
notice of proposed rulemaking (PS-158-86) relating to this tax was 
published in the Federal Register (58 FR 21963). The proposed 
regulation treats any facility that produces natural gasoline by 
fractionation or similar operation as a United States refinery. Under 
this rule, tax would be imposed on natural gasoline when it is produced 
from natural gas liquids at a fractionation facility.
    Since the publication of the proposed regulation, the tax imposed 
by section 4611 has expired. Because tax is not currently imposed under 
section 4611, the proposed regulation is being withdrawn. For purposes 
of section 4611 prior to its expiration, the IRS will follow the result 
in Enron Gas Processing Co. v. United States, 96-1 USTC para. 70,058 
(S.D. Tex. 1996), in all cases involving substantially similar facts. 
In Enron, the U.S. District Court for the Southern District of Texas 
held that fractionation facilities are not United States refineries.

List of Subjects in 26 CFR Part 52

    Chemicals, Excise taxes, Reporting and recordkeeping requirements.

Withdrawal of Notice of Proposed Rulemaking

    Accordingly, under the authority of 26 U.S.C. 7805, the notice of 
proposed rulemaking that was published in the Federal Register on April 
26, 1993 (58 FR 21963) is withdrawn.
Michael P. Dolan,
Deputy Commissioner of Internal Revenue.
[FR Doc. 97-33250 Filed 12-22-97; 8:45 am]
BILLING CODE 4830-01-U