Case Studies

Compliance Case Study: Avoiding Excise Tax Traps in Fuel & Remittance Services

With enforcement changing under OBBB, businesses involved in fuel dyeing or remittance transfers face new excise tax liabilities—see how to stay compliant with recent changes.

By NomadicTax Research Team • 5-8 min read • March 25, 2026

## What’s New in Excise Tax Under OBBB Effective **January 1, 2026**, the excise tax regime for certain exports and remittance transfers has shifted significantly. Key updates include: - The **section 4611(b) tax**, which previously applied to crude oil exports, **no longer applies** as the IRS acquiesced to a court ruling. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/excise-tax?utm_source=openai)) - The section 4611 tax rate now includes only the **Superfund tax component**, since the Oil Spill Liability Trust Fund (OSLTF) rate lapsed at end of 2025. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/excise-tax?utm_source=openai)) - **Providers of remittance transfers** must now collect a **1% excise tax** on certain transfers starting Jan 1, 2026; deposit semi-monthly; and file **Form 720 quarterly**. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/excise-tax?utm_source=openai)) ## Compliance Risk: Fuel Dyed Fuel Claims Business using dyed diesel or kerosene fuel that becomes “non-taxable use” through terminal removal can reclaim the federal excise taxes paid earlier under section 6435, provided use meets eligibility. Misapplication or late claiming can lead to denied claims. Keep careful evidence of removal point, timing, and fuel status. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/excise-tax?utm_source=openai)) ## Actionable Steps to Stay Compliant - **Review products and uses**: Determine whether your fuel deliveries qualify for section 6435 rebates - **Update remittance contracts/SOPs**: Ensure that payers clearly document the payment instrument and that providers are capturing required data for the excise tax obligation. - **File properly**: For excise tax liabilities arising under new remittance and stock repurchase rules, use Form 720 and adhere to deposit schedule. - **Implement training and systems**: For platforms, businesses, and financial institutions handling remittance transfers to stay updated on handling thresholds and reporting. ## Example: Remittance Service Platform B - Prior to 2026, Platform B processed 15 remittance transfers/month; used non-specified payment instruments. Post-2026, any applicable instrument—if the sender uses a specified instrument—must trigger a 1% excise tax. Platform B must collect, deposit semi-monthly, and include on Form 720. ## Summary The OBBB has introduced excise tax changes with immediate effect on fuel exports, stock repurchases, and remittance operators. Entities must adapt recording practices, reporting procedures, and internal compliance controls to avoid penalties.