TAX ON AVIATION FUEL.

SEC. 202. TAX ON AVIATION FUEL. (a) Imposition of Tax—Section 4041 (relating to tax on special fuels) is amended by striking out subsections (c), (d), and (e) and inserting after subsection (b) the following new subsections: “(c) Noncommercial Aviation.— “(1) In general.— There is hereby imposed a tax of 7 cents a gallon upon any liquid (other than any product taxable under section 4081)— “(A) sold by any person to an owner, lessee, or other operator of an aircraft, for use as a fuel in such aircraft in noncommercial aviation; or “(B) used by any person us a fuel in an aircraft, in non-commercial aviation, unless there was a taxable sale of such liquid under this section. “(2) Gasoline.— There is hereby imposed a tax (at the rate specified in paragraph (3)) upon any product taxable under section 4081— “(A) sold by any person to an owner, lessee, or other operator of an aircraft, for use as a fuel in such aircraft in non-commercial aviation; or “(B) used by any person as a fuel in an aircraft in non-commercial aviation, unless there was a taxable sale of such product under subparagraph (A). The tax imposed by this paragraph shall be in addition to any tax imposed under section 4081. “(3) Rate of tax.—The rate of tax imposed by paragraph (2) is as follows: “3 cents a gallon for the period ending September 30, 1972;and “5½ cents a gallon for the period after September 30, 1972. “(4) Definition of noncommercial aviation.—For purposes of this chapter, the term ‘noncommercial aviation means any use of an aircraft, other than use in a business of transporting persons or property for compensation or hire by air. The term also includes any use of an aircraft, in a business described in the preceding sentence, which is properly allocable to any transportation exempt from the taxes imposed by sections 4261 and 4271 by reason of section 4281 or 4282. “(5) Termination.—On and after July 1, 1980, the taxes imposed by paragraphs (1) and (2) shall not apply. “(d) Additional Tax.—If a liquid on which tax was imposed on the sale thereof is taxable at a higher rate under subsection (c)(1) of this section on the use thereof, there is hereby imposed a tax equal to the difference between the tax so imposed and the tax payable at such higher rate. “(e) Rate Reduction.—On and after October 1, 1972— “(1) the taxes imposed by subsections (a) and (b) shall be 114 cents a gal Ion, and “(2) the second and third sentences of subsections (a) and (b) shall not apply. “(f) Exemption for Farm Use.— “(1) Exemption.—Under regulations prescribed by the Secretary or bis delegate, no tax shall be imposed under this section on any liquid sold tor use or used on a farm for farming purposes. “(2) Use on a farm for farming purposes.—For purposes of paragraph (1) of this subsection, use on a farm for farming purposes shall be determined in accordance with paragraphs (1), (2), and (3) of section 6420(c). “(g) Exemption for Use as Supplies for Vessels.—Under regulations prescribed by the Secretary or his delegate, no tax shall be 84 Stat. 238imposed under this section on any liquid sold for use or used as supplies for vessels or aircraft (within the meaning of section 4221(d) (3)). “(h) Registration.—If any liquid is sold by any person for use as a fuel in an aircraft, it shall be presumed for purposes of this section that a tax imposed by this section applies to the sale of such liquid unless the purchaser is registered in such manner (and furnishes such information in respect of the use of the liquid) as the Secretary or his delegate shall by regulations provide.” (b) Conforming and Technical Amendments.—Section 4041(b) (relating to imposition of tax on special motor fuels) is amended— (1) by striking out “motor vehicle, motorboat, or airplane” each place it appears and inserting in lieu thereof “motor vehicle or motorboat”, and (2) by striking out “for the propulsion of” each place it appears and inserting in lieu thereof “in”.