MISCELLANEOUS AMENDMENTS RELATING TO TAXES ON TRANSPORTATION BY AIR.

SEC. 205. MISCELLANEOUS AMENDMENTS RELATING TO TAXES ON TRANSPORTATION BY AIR. (a) Exemptions and Special Rules.— (1) Subchapter C of chapter 33 (relating to transportation by air) is amended by adding at the end thereof the following new part: 84 Stat. 241 “PART III—SPECIAL PROVISIONS APPLICABLE TO TAXES ON TRANSPORTATION BY AIR “4281. Small aircraft on nonestablished lines. “4282. Transportation by air for other members of affiliated group. “SEC. 4281. SMALL AIRCRAFT ON NONESTABLISHED LINES.“The taxes imposed by sections 4261 and 4271 shall not apply to transportation by an aircraft having a maximum certificated takeoff weight (as defined in section 4492(b)) of 6,000 pounds or less, except when such aircraft, is operated on an established line. “SEC. 4282. TRANSPORTATION BY AIR FOR OTHER MEMBERS OF AFFILIATED GROUP. “(a) General Rule.—Under regulations prescribed by the Secretary or his delegate, if— (1) one member of an affiliated group is the owner or lessee of an aircraft, and (2) such aircraft is not available for hire by persons who are not members of such group, no tax shall be imposed under section 4261 or 4271 upon any payment received by one member of the affiliated group from another member of such group for services furnished to such other member in connection with the use of such aircraft. “(b) Affiliated Group.—For purposes of subsection (a), the term ‘affiliated group’ has the meaning assigned to such term by section 1504(a), except that all corporations shall be treated as includible corporations (without any exclusion under section 1504(b)).” (2) Section 4292 (relating to State and local governmental exemption) is amended by striking out “or 4261”. (3) Section 4293 (relating to exemption for United States and possessions) is amended by striking out “subchapters B and C” and inserting in lieu thereof “subchapter B”. (4) Section 4294(a) (relating to exemption for nonprofit educational organizations) is amended by striking out “or 4261”. (b) Credits and Refunds.— (1) (A) Section 6421(a) (relating to nonhighway use of gasoline) is amended by adding the following sentence at the end thereof: “Except as provided in paragraph (3) of subsection (e) of this section, in the case of gasoline used after June 30, 1970, as a fuel in an aircraft, the Secretary or his delegate shall pay (without interest) to the ultimate purchaser of such gasoline an amount equal to the amount determined by multiplying the number of gallons of gasoline so used by the rate at which tax was imposed on such gasoline under section 4081.” (B) Section 6421 (e) (relating to exempt sales; other payments or refunds available) is amended by adding at the end thereof the following new paragraph: (3) Gasoline used in noncommercial aviation.—This section shall not apply in respect of gasoline which is used after June 30, 1970, as a fuel in an aircraft in noncommercial aviation (as defined in section 4041 (c) (4)).” (2) Section 6415 (relating to credits or refunds to persons who collected certain taxes) is amended by striking out “section 4251 or 4261” each place it appears and inserting in lieu thereof “section 4251, 4261, or 4271”. 84 Stat. 242 (3) Subparagraph (A) of section 6416(a) (2) (relating to exceptions) is amended by striking out “section 4041 (a) (2) or (b)(2) (use of diesel and special motor fuels)” and inserting in lieu thereof “section 4041 (relating to tax on special fuels) on the use of any liquid”. (4) Subparagraph (M) of section 6416(b)(2) (relating to special cases in which tax payments constitute overpayments) is amended to read as follows: “(M) in the case of gasoline, used or sold for use in the production of special fuels referred to in section 4041;”. (c) Other Technical and Clerical Amendments.— (1) Section 4263 (relating to exemptions) is hereby repealed. (2) Section 4264 (relating to special rules) is redesignated as section 4263. (3) Section 4291 is amended by striking out “section 4264(a)” and inserting in lieu thereof “section 4263 (a) ”. (4) So much of subchapter C of chapter 33 (relating to transportation of persons) as precedes section 4261 is amended to read as follows: “Subchapter C—Transportation by Air “Part I. Persons. “Part II. Property. “Part III. Special provisions relating to taxes on transportation by air. “PART I—PERSONS “Sec. 4261. Imposition of tax. “Sec. 4282. Definition of taxable transportation. “Sec. 4263. Special rules.” (5) The table of subchapters for chapter 33 is amended by striking out “Subchapter C—Transportation of Persons by Air.” and inserting in lieu thereof “Subchapter C—Transportation by Air.” (6) Section 4082(c) (relating to certain uses defined as sales) is amended by striking out “or of special motor fuels referred to in section 4041(b)” and inserting in lieu thereof “or of special fuels referred to in section 4041”. (7) Section 6420 (i)(l) (relating to cross references) is amended— (A) by striking out “diesel fuel and special motor fuels” and inserting in lieu thereof “special fuels”, and (B) by striking out “section 4041(d)” and inserting in lieu thereof “section 4041(f)”. (8) Section 6421(j) (relating to cross references) is amended to read as follows: “(j) Cross References.— “(1) For rate of tax in case of special fuels used in noncommercial aviation or for nonhighway purposes, see section 4041. “(2) For civil penalty for excessive claims under this section, see section 6675. “(3) For fraud penalties, etc, see chapter 75 (section 7201 and following, relating to crimes, other offenses, and forfeitures).”