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Treasury Regulations · 26 CFR

§ 48.6427-6. Limitation on credit or refund of tax paid on fuel used in intercity, local or school buses after July 31, 1984.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 6427

Cite as 26 CFR § 48.6427-6

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
May 23, 1985 by T.D. 8027
Issued under
26 U.S.C. § 6427
Length
386 words · about 2 min to read
Defines
1 term
Cross-references
cites 3 Code sections and 0 regulations; cited by 0
(a) Limitation on amount of credit or refund—
(1) In general. In the case of fuel sold or used after July 31, 1984, on which tax was imposed under section 4041(a), the amount of credit or refund under section 6427(b)(1) shall not exceed 12 cents per gallon except where fuel is used in a bus while such bus is being operated as a “qualified local bus” in which case the credit or refund shall be the full amount of tax paid under section 4041(a) on such fuel.
(2) Qualified local bus. A bus is considered to be operated as a “qualified local bus” if such bus—
(i) Is engaged in furnishing (for compensation) intracity passenger land transportation that is available to the general public and is scheduled and along regular routes,
(ii) Has a seating capacity of at least 20 adults (not including the driver), and
(iii) Is under contract with (or is receiving more than a nominal subsidy from) any State or local government (as defined in section 4221(d)(4)) to furnish such transportation.

A company that operates qualified local buses is eligible for a full refund or credit only with respect to fuel used while such buses are operating as qualified local buses. For example, a company that operates its buses along subsidized intracity routes and also on intercity or unsubsidized intracity routes may obtain a full refund or credit only with respect to fuel used while operating the subsidized intracity routes.

(b) Meaning of terms—
(1) Contract with a State or local government. A bus is under contract with a State or local government only if the contract imposes a bona fide obligation on the operator of the bus to furnish the transportation to which the contract relates.
(2) More than a nominal subsidy. A subsidy is more than nominal if the subsidy is reasonably expected to exceed an amount equal to 3 cents multiplied by the number of gallons of fuel used while operating on subsidized routes.
(3) Intracity passenger land transportation. The term “intracity passenger land transportation” means the land transportation of passengers to and from points located within the same metropolitan area. The term includes transportation along routes that cross State, city or county boundaries provided such routes remain within the metropolitan area.

[T.D. 8027, 50 FR 21252, May 23, 1985]

Terms defined here

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Other regulations under § 6427

Cross-references

Computed from the citations in the text of 26 CFR.

Code sections it cites

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Issued by T.D. 8027 (50 FR 21252)

Where it sits in 26 CFR

  1. Subchapter D Miscellaneous excise taxes
  2. Part 48 Manufacturers and retailers excise taxes
  3. Subpart O Refunds and Other Administrative Provisions of Special Application to Retailers and Manufacturers Taxes

Nearby sections