Motor Fuels Tax Minute, Episode 82: Federal Classification of Racing Fuel

In this episode of Motor Fuels Tax Minute, our hosts kick off a new series on racing fuel by diving into the federal classifications.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 82

00:00:00
Leanne: Welcome to Weaver’s Motor Fuels Tax Minute, the vlog where we talk all things motor fuel. For those of you who have tuned in regularly, you may have noticed that over the past few weeks, or even months, we’ve been running a series. We’ve discussed amended returns as well as powers of attorney. Now we’re going to begin another one, looking at racing fuel. We could cover it all in one, but we are the Motor Fuels Tax Minute, and we want to be mindful of that. I’m not sure that everybody would listen to the Motor Fuels Tax 15 Minute.

Kelly is our go-to on racing fuel, and she’s going to talk over the next few episodes about different things that relate to that. Racing fuel is this product that you might see in cars such as NASCAR. So, Kelly, tell us a little bit about it. And I think we were going to start with federal?

00:00:43
Kelly: Yeah, federal is a great place to start because they really set the standard for the industry. Their definition is extensive, so please bear with me as I read through it.

In order to be classified as racing fuel, according to the IRS, it needs to not meet the ASTM specification D 4814 for gasoline, so it needs to not be classified as gasoline. It needs to contain the lead, have an octane rating of 110 or higher. It needs to not include a detergent additive. Detergent additives are usually used in gasoline, so once again, it’s just differentiating the two. It cannot conform to the Gasoline Reid Vapor Pressure standards for either reformulated or oxygenated gasoline. And it generally needs to be used in vehicles that were not eligible to be registered for highway use. So that’s a federal definition on how a product meets the definition of racing fuel as opposed to gasoline.

I think it’s worth diving in a little bit into some of those words that came up like leaded and octane. I know they’re familiar to us, but it’s probably worth noting what the difference is.

So, for leaded versus unleaded gasoline, leaded gasoline contains what is known as tetraethyl lead, that’s abbreviated to TEL. Unleaded gasoline used to be really popular. That was later replaced by including ethanol instead of the leaded piece, kind of for environmental reasons, but is still used with racing fuel.

In terms of octane, the higher the octane, the greater resistance to what is known as knock in cars. It’s also known as pinging. Essentially the higher the octane rating, the cleaner the fuel is running, so you’ll avoid an actual knock from the engine with the higher octane rating when you’re trying to make a vehicle go at that rate. Lots to learn here. Lots of definitions handled differently in every state, and we’ll go through some of those on our next episode.

00:02:47
Leanne: Thanks, Kelly. That was good information. It is important to note the distinction between racing fuel and gasoline because they are very similar. And it is these small nuances, such as lead versus no lead, or the octane rating, that does make the difference. It affects the tax rate, it affects whether it’s taxable at all, and all things that we’ll get into a little bit more in our next episodes.

That was this week’s Motor Fuels Tax Minute. Join us next time. Thank you.