Boat Gas

[Bjorn]

I don't believe this one. A client asked me to research if the gas for his pleasure boat would count to get back the tax paid at the pump.

I asked about any business use and the answer is all personal. I told him now way, but his highly trainined beer drinking friend assures him it is for real.

Any thoughts?

Mahalo
Bjorn

[DaveO]

Don't know about the Aloha state

But here in Nebraska you can claim the state fuel tax credit back on all non-highway use. You don't need a business or permit, lawn mower, dirt bike, boat, weed wacker or tractor, forklift or irrigation pump it doesn't matter.

[newbie]

If you can claim on the Federal would it matter what state you are in?

What necessary documentation would you need to track the credit?

Date lawn mowed, snow plowed, dirtbike ridden, boat used, etc... and then how many gallons for each event?

[DaveO]

You can't claim on the Federal form

Only the state portion of the tax is refundable. (which here in the cornhusker state is plenty) The state 4136 has been eliminated and replaced with a seperate form independent of the tax return.

[Burke]

How old is the beer-drinking buddy? It used to be you could get a credit on the 1040 for the federal excise tax on gas consumed for non-highway use (i.e., boats) on Form 4136, but they eliminated that for personal use so many years ago I can't remember when it was.

[BOB W]

check out this thread

http://www.thetaxbook.com/forums/showthread.php?t=2324&highlight=fuel+tax+credit

[mesha]

How old is the beer-drinking buddy? It used to be you could get a credit on the 1040 for the federal excise tax on gas consumed for non-highway use (i.e., boats) on Form 4136, but they eliminated that for personal use so many years ago I can't remember when it was.

For your information, my client received a refund for gas tax in 2006! RTM!

[thomtax]

For your information, my client received a refund for gas tax in 2006! RTM!

Possibly did - but you don't say if this was commercial or pleasure use boat. I know of people getting EARNED Income Credit refunds that have not had any earned income in years. It is possible to cheat and/or scam the system if you are so inclined to do so. As for RTM, an earlier post gave a link to the IRS publication concerning this matter.

LT

[JohnH]

About a year ago I was asked by a friend to review a return for an employee who was being hounded for state taxes for a balance due going back about 5 years. I noticed that he had a big refund on his Fed return and owed money on the state return, which he hadn't bothered to pay and thus was being levied.

He had worked as a taxi driver during the year in question, and the Federal refund resulted from his tax preparer having claimed a huge deduction for fuel tax credit. The employer and I assumed maybe he took a lot of shortcuts through parks & ballfields to qualify for the off-road commercial use. Incidentally, he couldn't go back to the original preparer for advice because that guy had been prosecuted for filing frivolous tax returns. Wonder why?

[Roland Slugg]

Repealed in 1994

The credit for federal excise tax on fuel used in motorboats was repealed long ago. In the "background/history" of Code §6421 you can find the following:

Subsection (e)(2)(B). -- Pub. L. 103-66, section 13163(b) amended
subparagraph (B) generally. [Effective January 1, 1994]. Prior to
amendment, subparagraph (B) read as follows:

"(B) EXCEPTION FOR USE IN MOTORBOATS

"The term "off-highway business use" does not include any use in
a motorboat. The preceding sentence shall not apply to use in a
vessel employed in the fisheries or in the whaling business."

The above quote appears to be a change to an even earlier amendment, so the actual repeal of the credit for personal off-road gasoline use must have taken place even before 1994.