In this chapter,

(1) “dealer” means a person who sells or otherwise transfers in this state refined or motor fuel on which the surcharge or tax imposed by this chapter has not been paid;

(2) “motor fuel” means fuel used in an engine for the propulsion of a motor vehicle or aircraft, and fuel used in and on watercraft for any purpose, or in a stationary engine, machine, or mechanical contrivance that is run by an internal combustion motor; “motor fuel” does not include

(A) fuel consigned to foreign countries;

(B) fuel sold for use in jet propulsion aircraft operating in flights

(i) to foreign countries; or

(ii) that continue from foreign countries, unless exemption of the motor fuel from taxation is disallowed because of the refiner's failure to comply with the provisions of a voluntary agreement under AS 43.40.092 in conjunction with expansion of refinery capacity;

(C) fuel used in stationary power plants operating as public utility plants and generating electrical energy for sale to the general public;

(D) fuel used by nonprofit power associations or corporations for generating electric energy for resale;

(E) fuel used by charitable institutions;

(F) fuel sold or transferred between qualified dealers;

(G) fuel sold to federal, state, and local government agencies for official use;

(H) fuel used in stationary power plants that generate electrical energy for private residential consumption;

(I) fuel used to heat private or commercial buildings or facilities;

(J) fuel used for other nontaxable purposes as prescribed by regulations adopted by the department;

(K) fuel used in stationary power plants of 100 kilowatts or less that generate electrical power for commercial enterprises not for resale; or

(L) residual fuel oil used in and on watercraft if the residual fuel oil is sold or transferred in the state or consumed by a user; for purposes of this subparagraph, “residual fuel oil” means the heavy refined hydrocarbon known as number 6 fuel oil that is the residue from crude oil after refined petroleum products have been extracted by the refining process and that may be consumed or used only when sufficient heat is provided to the oil to reduce its viscosity rated by kinetic unit and to give it fluid properties sufficient for pumping and combustion;

(3) “qualified dealer” means a person who (A) refines, (B) imports, (C) manufactures, (D) produces, (E) compounds, or (F) wholesales refined or motor fuel;

(4) “refined fuel” means fuel produced from oil that is used in an engine, machine, or contrivance that creates heat, energy, or power;

(5) “user” means a person consuming or using refined or motor fuel, who

(A) purchases the fuel out of the state and ships it into the state for personal use in the state;

(B) manufactures the fuel in the state; or

(C) purchases or receives fuel in the state that is not subject to the surcharge or tax under this chapter at the time of purchase or receipt or is subject to a surcharge or tax that is less than the rate prescribed by AS 43.40.005 or 43.40.010.