---
kind: "section"
citation: "26 U.S.C. § 4105"
title: "26"
title_heading: "Internal Revenue Code"
number: "4105"
heading: "Two-party exchanges"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/4105"
units:
  - "Subtitle D — Miscellaneous Excise Taxes"
  - "Chapter 32 — Manufacturers Excise Taxes"
  - "Subchapter A — Automotive and Related Items"
  - "Part III — Petroleum Products"
  - "Subpart B — Special Provisions Applicable to Fuels Tax"
---

# §4105. Two-party exchanges

- (a) **In general—** In a two-party exchange, the delivering [person](/usc/26/4377.md?p=b-1-A) shall not be liable for the tax imposed under [section 4081(a)(1)(A)(ii)](/usc/26/4081.md?p=a-1-A-ii).
- (b) **Two-party exchange—** The term “two-party exchange” means a transaction, other than a sale, in which [taxable fuel](/usc/26/4083.md?p=a-1) is transferred from a delivering [person](/usc/26/4377.md?p=b-1-A) registered under [section 4101](/usc/26/4101.md) as a [taxable fuel](/usc/26/4083.md?p=a-1) registrant to a receiving [person](/usc/26/4377.md?p=b-1-A) who is so registered where all of the following occur:
  - (1) The transaction includes a transfer from the delivering [person](/usc/26/4377.md?p=b-1-A), who holds the inventory position for [taxable fuel](/usc/26/4083.md?p=a-1) in the terminal as reflected in the records of the terminal operator.
  - (2) The exchange transaction occurs before or contemporaneous with completion of removal across the rack from the terminal by the receiving [person](/usc/26/4377.md?p=b-1-A).
  - (3) The terminal operator in its books and records treats the receiving [person](/usc/26/4377.md?p=b-1-A) as the [person](/usc/26/4377.md?p=b-1-A) that removes the product across the terminal rack for purposes of reporting the transaction to the Secretary.
  - (4) The transaction is the subject of a written [contract](/usc/26/101.md?p=f-3-A).

## Source credit

(Added Pub. L. 108–357, title VIII, § 866(a), Oct. 22, 2004, 118 Stat. 1621.)

## Notes

### Editorial Notes

### Prior Provisions

Prior sections 4111 to 4113, 4121, and 4131 of this title constituted a former subchapter B of this chapter, see Prior Provisions note set out preceding section 4121 of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 108–357, title VIII, § 866(c), Oct. 22, 2004, 118 Stat. 1622, provided that: “The amendment made by this section [enacting this section] shall take effect on the date of the enactment of this Act [Oct. 22, 2004].”