Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2012
 

Diesel Fuel Tax Regulations

Contents

Title 18 of the California Code of Regulations


Diesel Fuel Tax Regulations

CALIFORNIA CODE OF REGULATIONS

Title 18. Public Revenues Division 2. State Board of Equalization—Business Taxes Chapter 3. Diesel Fuel Tax

Regulation 1411. Highway.

Reference: Section 60016, Revenue and Taxation Code.

(a) "Highway" means a way or place, of whatever nature, within the exterior boundaries of the State including a way or place within a Federal area, publicly maintained and open to the use of the public for purposes of vehicular travel, including, but not limited to, the shoulder and rest stops, notwithstanding private participation in the maintenance of the way or place. It shall be presumed that a way or place is dedicated and accepted as a highway when it is recognized as a part of a maintained highway system by a public authority.

(b) A way or place within a national or state forest which is entirely privately maintained, or a road over which forest products are transported in a national or state forest privately constructed or maintained pursuant to an existing agreement with the public authority having jurisdiction thereof, shall not be considered a highway notwithstanding the fact that it may be declared by the public authority to be a part of its road system.

(c) A way or place is not a highway within the meaning of Revenue and Taxation Code Section 60016, during such times as it is closed by the governmental authority to the use of the public regardless of the purpose for which it is closed. A highway is open to the use of the public if vehicular travel is permitted although subject to traffic controls.

History: Adopted December 9, 1998, effective March 31, 1999.

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Regulation 1413. Tax-paid Diesel Fuel and Ex-tax Diesel Fuel.

Reference: Sections 60048.1, 60050, 60050.1, 60051, 60052, 60053, 60054, 60055, 60056, 60057, 60058, 60059, 60060, 60061, 60062, 60100, and 60106, Revenue and Taxation Code.

(a) "Tax-paid diesel fuel" is the gallonage of diesel fuel acquired with the California diesel fuel tax paid. An acquisition of diesel fuel will be considered tax-paid only if it can be supported by one of the following:

(1) A sales invoice or contract which clearly states that the diesel fuel tax is included in the invoice or contract and proof that the amount representing diesel fuel tax has been paid, or (2) A diesel fuel purchase receipt showing that the amount paid for the fuel included the diesel fuel tax, or

(3) Other documentation showing that the diesel fuel tax has been paid to the state.

(b) "Ex-tax diesel fuel" is the gallonage of diesel fuel acquired which is not tax-paid diesel fuel.

History: Adopted December 9, 1998, effective March 31, 1999.

Change without regulatory effect amending Note filed June 5, 2002.

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Regulation 1420. Supplier.

Reference: Sections 60003, 60004, 60006, 60007, 60008, 60009, 60010, 60011, 60012, 60013, 60015, 60021, 60022, 60023, 60029, 60030, 60031, 60032, 60033, 60035, 60050, 60051, 60052, 60053, 60054, 60055, 60059, 60060, 60061, 60062, 60063, 60131, and 60201, Revenue and Taxation Code.

(a) RETURNS. All suppliers must prepare and file returns with the Board to report tax on diesel fuel. Returns are due at the end of the month following the calendar month in which the diesel fuel was removed, entered, or sold, unless the Board requires that a return be filed for a different period. A terminal operator who also is a position holder in diesel fuel within the terminal or is jointly and severally liable for the tax is required to file both the terminal operator return and the supplier return.

(b) IMPOSITION OF TAX. Tax applies to each supplier as follows:

(1) BLENDER. A blender is required to pay the tax on the removal or sale of diesel fuel blended outside the bulk transfer/terminal system. The number of gallons of blended diesel fuel subject to the tax is the difference between the total number of gallons of blended diesel fuel removed or sold and the number of gallons of tax-paid diesel fuel used to produce the blended fuel.

(2) ENTERER.

(A) An enterer is required to pay the tax when the enterer imports diesel fuel into the state by means outside of the bulk transfer/terminal system.

(B) An enterer is required to pay the tax when the enterer removes or sells diesel fuel within a pipeline or terminal to an unlicensed person.

(C) An enterer is required to pay the tax when the entry is by bulk transfer and the enterer is not a licensed supplier.

(D) For purposes of proper imposition of tax, entry occurs when fuel is brought into the state, provided, however, that when entry is by bulk transfer, entry occurs as follows: (1) When fuel is received at a marine terminal, entry occurs at the landside of the flange.

(2) When fuel is removed from a vessel in this state to a lighter for the purpose of lightering, entry occurs at the vessel side of the flange upon the removal of fuel from a vessel in this state to the lighter; provided, however, that if the lighter unloads or discharges the fuel at a marine terminal, then entry occurs at the land side of the flange as to the fuel received at the marine terminal. As used herein, "lightering" is the use of small, shallow-draft boats in transshipment to shore of oil or other fuel from a large, deep-draft vessel unable to dock at shore facilities because of shallow water. The small boats are called lighters.

(3) When fuel is removed from a vessel in this state to another vessel in this state, and the fuel is not unloaded or discharged at a marine terminal, then entry occurs when the fuel is brought into the state.

(3) POSITION HOLDER.

(A) A position holder that holds an inventory position in the diesel fuel as reflected on the records of the terminal operator is required to pay the tax when the diesel fuel is removed from the terminal rack.

(B) A position holder is required to pay the tax when the position holder removes or sells diesel fuel within or without the bulk transfer/terminal system to an unlicensed person.

(C) For reporting periods commencing on or after January 1, 2007, a position holder that delivers diesel fuel to a receiving supplier under a two-party exchange contract shall remain liable for the tax due on the removal of diesel fuel from the terminal rack unless all Regulation 1423 requirements are met.

(4) REFINER.

(A) A refiner is required to pay the tax when the diesel fuel is removed at a terminal rack located at a refinery.

(B) A refiner is required to pay the tax when the removal of diesel fuel is by bulk transfer (e.g., transfer by pipeline or vessel) and the refiner or the owner of the diesel fuel immediately before the removal is not a licensed supplier.

(C) A refiner is required to pay the tax when the refiner removes or sells diesel fuel within or without the bulk transfer/terminal system to an unlicensed person.

(D) For reporting periods commencing on or after January 1, 2007, a refiner that delivers diesel fuel to a receiving supplier under a two-party exchange contract shall remain liable for the tax due on the removal of diesel fuel from the terminal rack located at a refinery unless all Regulation 1423 requirements are met.

(5) TERMINAL OPERATOR. A terminal operator is jointly and severally liable for and may be required to pay the tax when the diesel fuel is removed at the rack if both subsections (A) and (B) below apply, or if subsection (C) applies:

(A) The position holder with respect to the diesel fuel is a person other than the terminal operator and is not a licensed supplier.

(B) The terminal operator is not a licensed supplier and either (i) does not have an unexpired notification certificate from the position holder as required by the Internal Revenue Service or (ii) has an unexpired notification certificate from the position holder, but has reason to believe or knows that any information in the certificate is false.

(C) The terminal operator provides any person with a bill of lading, shipping paper, or similar document which falsely indicates that the undyed or unmarked diesel fuel which is removed from the terminal is dyed or marked in accordance with the United States Environmental Protection Agency or the Internal Revenue Service requirements.

(6) THROUGHPUTTER. A throughputter is required to pay the tax when the throughputter removes or sells diesel fuel within or without the bulk transfer/terminal system to a person who is not a licensed supplier.

History: Adopted December 9, 1998, effective March 31, 1999.

Amended March 27, 2002, effective July 11, 2002. In subdivision (a) deleted sentence "A supplier acting in more than one capacity as a supplier (for example, as a blender and enterer, or throughputter and position holder) may be required to file more than one return", since a supplier files only one tax return. Also deleted last sentence in (a) which refers to a separate throughputter return, because the requirement for a throughputter to file a separate return under Revenue and Taxation Code Section 60203 was repealed effective January 1, 2002. New paragraphs (A), (B), (C), and (D)(1), (2), and (3) added under Subdivision (b)(2) to further clarify imposition of tax on an enterer. Subdivision (b)(A)(4) was rewritten to refer to a terminal rack located at a refinery instead of a refinery rack.

Amended June 27, 2006, effective October 8, 2006. Added subsections (b)(3)(C) and (b)(4)(D).

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Regulation 1421. Successor's Liability.

Reference: Sections 60471, 60472, 60473, and 60474, Revenue and Taxation Code.

(a) DUTY TO WITHHOLD FROM THE PURCHASE PRICE. The requirement that a successor or purchaser of a business or stock of goods withhold a sufficient amount of the purchase price to cover the tax liability of the seller, arises only in the case of the purchase and sale of a business or stock of goods under a contract, which provides for the payment to be made to the seller or to a person designated by the seller of a purchase price consisting of money or property or the assumption of liabilities and only to the extent thereof, and does not arise in connection with other transfers of a business such as assignments for the benefit of creditors, foreclosures of mortgages, or sales by trustees in bankruptcy.

(b) AMOUNTS TO WHICH LIABILITY EXTENDS. The liability of the successor or purchaser of a business or stock of goods extends to amounts incurred with reference to the operation of the business by the predecessor or any former owner, including the sale thereof, even though not then determined against the former owner, which include taxes, interest thereon to the date of payment of the taxes, and penalties, including penalties for nonpayment of taxes, negligence, intentional disregard, fraud, or intent to evade the tax.

(c) RELEASE FROM OBLIGATION. The purchaser of the business or stock of goods will be released from further obligation to withhold from the purchase price if the purchaser obtains a certificate from the Board stating that no taxes, interest, or penalties are due from a predecessor. The purchaser will also be released if he or she makes a written request to the Board for a certificate and if the Board does not issue the certificate or mail to the purchaser a notice of the amount of the tax, interest, and penalties that must be paid as a condition of issuing the certificate within 60 days after the later of the following dates:

(1) The date the Board receives a written request from the purchaser for a certificate.

(2) The date the former owner's records are made available for audit.

The certificate may be issued after the payment of all amounts due, including taxes, interest, and penalties, according to the records of the Board as of the date of the certificate, or after the payment of the amounts, including amounts not yet ascertained, is secured to the satisfaction of the Board.

(d) ENFORCEMENT OF OBLIGATION.

(1) The obligation is enforced by service of a notice of successor liability not later than three years after the date the Board receives written notice of the purchase of the business or stock of goods. The successor may petition the Board for reconsideration of the liability within 30 days after service. The liability becomes final, and the amount is due and payable, in the same manner as determinations and redeterminations of other diesel fuel tax liability.

(2) A successor may be relieved of any penalty included in the notice of successor liability regardless of when the notice was issued, if it is determined by the Board that failure by the successor to withhold a sufficient amount of the purchase price to cover the liability of the former owner was due to reasonable causes and circumstances beyond the control of the successor and occurred even though the successor exercised ordinary care and was not willfully negligent. A successor seeking relief of a penalty must file a written statement with the Board under penalty of perjury stating the facts upon which he or she bases the claim for relief.

(e) SEPARATE BUSINESS LOCATIONS. Where one person operates several business establishments, each at a separate location, each establishment is a separate "business" and has a separate "stock of goods" for purposes of determining the liability of a successor. A purchaser of the business or stock of goods of any such establishment is subject to liability as a successor with respect to that establishment even if he or she does not purchase the business or stock of goods of all the establishments.

(f) PURCHASE OF A PORTION OF A BUSINESS. A person who purchases a portion of a business or stock of goods may become liable as a successor as, for example, where the purchaser purchases substantially all of the business or stock of goods or where the business or stock of goods is purchased by two or more persons. In cases of doubt as to possible liability, the purchaser should obtain a certificate as provided in (c) above.

History: Adopted December 9, 1998, effective March 31, 1999.

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Regulation 1422. Relief from Liability.

Reference: Section 60210, Revenue and Taxation Code.

A person may be relieved from the liability for the payment of the diesel fuel tax, including any penalties and interest added to those taxes, when that liability resulted from the failure to make a timely return or a payment and such failure was found by the board to be due to reasonable reliance on written advice given by the board as described in California Code of Regulations, Title 18, Section 4902.

History: Adopted December 9, 1998, effective March 31, 1999.

Amended March 27, 2002, effective July 11, 2002. Former subdivision (a)(2) renumbered to (a)(3). New subdivision (a)(2) added to include written advice in the form of annotations or rulings of counsel under the the conditions set forth in new subdivision (d). Added subdivision (e) to require that a trade or industry association requesting advice for its members to identify the member for whom the advice is being requested in order for the relief from liability to apply.

Amended February 5, 2003, effective May 28, 2003. The underscored citation indicates an electronic hyperlink to the cite. Common administrative provisions for special taxes programs have been consolidated in Chapter 9.9 Special Taxes Administration. Requirements for relief from liability can be found at the referenced cite.

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Regulation 1422.1. INNOCENT SPOUSE OR REGISTERED DOMESTIC PARTNER RELIEF FROM LIABILITY.

Authority cited: Section 60601, Revenue and Taxation Code. Reference: Sections 60210.5 and 60501-60512, Revenue and Taxation Code; Sections 297, 297.5, and 308, Family Code.

A spouse or registered domestic partner claiming relief from liability for the diesel fuel tax, interest, penalties, and other amounts shall be relieved from such liability where all the requirements set forth in California Code of Regulations, title 18, section 4903 are met.

History: Adopted March 23, 2010, effective June 17, 2010.

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Regulation 1423. Two-Party Exchange.

Reference: Sections 60051, 60052, 60053, 60054, 60063, 60131, 60201, 60204, 60604, and 60605 Revenue and Taxation Code.

(a) GENERAL. In a typical two-party exchange, two suppliers who own diesel fuel in terminals, i.e., who are position holders (pursuant to Section 60010 of the Revenue and Taxation Code), agree to give each other access to the diesel fuel each owns. Both suppliers have customers in the same terminal areas. One supplier (the delivering supplier) owns fuel in one terminal, and the other supplier (the receiving supplier) owns fuel, usually in a different terminal. Each supplier agrees to exchange fuel it owns for fuel the other supplier owns. A two-party exchange contract allows each supplier to have rack removal capability at a terminal where the other supplier is a position holder, in order to supply fuel to its customers in that terminal area. The receiving supplier takes the place of the delivering supplier when the diesel fuel is removed from the terminal at the rack. A two-party exchange may involve fuel held in terminals located in one or more states and may involve one or more types of fuel. For purposes of this regulation, however, at least one of the terminals involved in a two-party exchange must be located in this state, and the requirements for reporting transactions to the Board pursuant to this regulation pertain only to transactions involving terminals located in this state.

(b) DEFINITIONS.

(1) Notwithstanding Section 60048 of the Revenue and Taxation Code, "two-party exchange" means a transaction, other than a sale, that occurs at the time of removal of diesel fuel across the rack and that meets all the following conditions:

(A) The terminal operator, delivering supplier, and the receiving supplier are each registered with the Board to file electronically and have filed electronically with respect to the subject two-party exchange; and

(B) The terminal operator treats the receiving supplier in its books and records as the person that removes the diesel fuel across a terminal rack for purposes of reporting the two-party exchange to the Board; and

(C) The two-party exchange is the subject of a written contract between the delivering supplier and the receiving supplier, acceptable evidence of which includes, but is not limited to, exchange statements, exchange differential invoices, exchange reconciliations, or any other similar writing between the parties; and

(D) All of the reporting requirements set forth in subdivisions (d) and (e) of this section are met.

(2) "Delivering supplier" means a supplier licensed pursuant to Section 60131 of the Revenue and Taxation Code, who is the position holder of the diesel fuel in the terminal on whom the diesel fuel tax is imposed on removal of diesel fuel from the rack for all purposes other than for a two-party exchange.

(3) "Receiving supplier" means a supplier licensed pursuant to Section 60131 of the Revenue and Taxation Code, on whom the diesel fuel tax is imposed only on removal of diesel fuel from the rack as the receiving supplier under a two-party exchange.

(4) "Terminal" as defined in Section 60033 of the Revenue and Taxation Code, includes, for purposes of this regulation, a terminal located at a refinery.

(c) LIABILITY FOR TAX.

(1) The delivering supplier is primarily liable for taxes imposed under Section 60051 or Section 60052(a) of the Revenue and Taxation Code, except, when a transaction satisfies the conditions and requirements for a two-party exchange, the delivering supplier shall be relieved of diesel fuel tax liability and the receiving supplier shall be liable for payment of diesel fuel taxes on the diesel fuel removed pursuant to the two-party exchange.

(2) The receiving supplier must report the two-party exchange and remit any tax due on a tax return filed within three months after the close of the calendar month in which the diesel fuel was received. The receiving supplier may claim a refund for any amounts applied by the Board to the account of the receiving supplier under a two-party exchange contract. When all parties report a transaction as a two-party exchange, the receiving supplier may not file a claim for refund of the tax on the grounds that the transaction was not a two-party exchange.

(3) If the receiving supplier fails to report or remit taxes in conformity with this regulation, then the delivering supplier shall remain primarily liable for taxes due on the removal of the diesel fuel from the rack.

(d) REPORTING REQUIREMENTS—GENERALLY.

(1) The terminal operator must report to the Board the two-party exchange of diesel fuel between the delivering supplier and the receiving supplier.

(2) The terminal operator, the delivering supplier, and the receiving supplier must each use the same identifying information (e.g., bill of lading number) to refer to or otherwise report the subject two-party exchange.

(3) The terminal operator, the delivering supplier, and the receiving supplier must each enter the same fuel type on any report that includes a two-party exchange.

(e) REPORTING REQUIREMENTS—DELIVERING AND RECEIVING SUPPLIERS. The following reporting requirements must be met in order for an exchange of diesel fuel to qualify as a two-party exchange and to shift the diesel fuel tax liability from the delivering supplier to the receiving supplier.

(1) The delivering supplier must report the two-party exchange and identify the receiving supplier to the terminal operator; and

(2) The delivering supplier must report to the Board a tax-free delivery of diesel fuel to the receiving supplier; and

(3) The receiving supplier must report to the Board a tax-free receipt of diesel fuel from the delivering supplier; and

(4) The receiving supplier must report to the Board the rack removal of diesel fuel to its customers and the amount of tax due.

(f) OPERATIVE DATE. The provisions of this regulation are operative January 1, 2007.

History: Adopted June 27, 2006, effective October 8, 2006.

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Regulation 1425. Payment by Electronic Funds Transfer.

Reference: Sections 60250 and 60252, Revenue and Taxation Code.

Payments by electronic funds transfer shall be made in accordance with California Code of Regulations, Title 18, Section 4905.

History: Adopted March 22, 2005, effective July 7, 2005. The underscored citation indicates an electronic hyperlink to the cite.

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Regulation 1430. Shipments Out of State.

Reference: Sections 60033, 60100, 60201, 60501–60512, 60521–60524, and 60604, Revenue and Taxation Code.

(a) EXPORTS OF EX-TAX DIESEL FUEL. The diesel fuel tax does not apply to the export of ex-tax diesel fuel. To qualify for an exemption from diesel fuel tax on the export of ex-tax diesel fuel, the supplier must claim the exemption on the return filed for the period in which the export occurred. Suppliers who erroneously pay tax on exports of ex-tax diesel fuel may file a claim for refund with the Board pursuant to Revenue and Taxation Code Sections 60521 through 60524 in order to obtain a refund of or credit for the amount of tax so paid.

(1) For purposes of this subdivision, "export" means the delivery or shipment from a point in this state to a point outside of the state when pursuant to the contract of sale the diesel fuel is shipped by a supplier by any of the following means:

(A) Facilities operated by the supplier.

(B) Delivery by the supplier to a carrier, customs broker, or forwarding agent, whether hired by the purchaser or not, for shipment to the out-of-state point.

(C) Delivery by the supplier to any vessel clearing from a port of this state for a port outside of this state and actually exported from this state in the vessel.

(2) For purposes of this subdivision, "carrier" means a person who is regularly engaged in the business of transporting for compensation property owned by other persons and includes both common and contract carriers. An individual or firm does not become a "carrier" simply by being designated by a purchaser to receive and ship goods to a point outside this state.

(3) For purposes of this subdivision, "forwarding agent" means a person or firm regularly engaged in the business of preparing property for shipment or arranging for its shipment. An individual or firm does not become a "forwarding agent" simply by being designated by a purchaser to receive and ship goods to a point outside this state.

(b) EXPORTS OF TAX-PAID DIESEL FUEL. A person who exports diesel fuel on which tax has been paid may file a claim for refund with the Board pursuant to Revenue and Taxation Code Sections 60501 through 60512 in order to obtain a refund of the amount of tax so paid. For purposes of this subdivision, the seller is deemed to be the exporter of diesel fuel when the diesel fuel is delivered to an out-of-state location by facilities of the seller or by common carrier on behalf of the seller, and the purchaser is deemed to be the exporter of diesel fuel when the diesel fuel is delivered to an out-of-state location by facilities of the purchaser or by common carrier on behalf of the purchaser.

(1) All claims for refund of tax paid on exported diesel fuel must be supported by, and the claim for refund covering the export must contain the following:

(A) The name, address, telephone number, and permit number of the person that sold the diesel fuel to the claimant.

(B) The date the diesel fuel was purchased.

(C) A statement by the claimant that the diesel fuel covered by the claim did not contain visible evidence of dye.

(D) A statement, which may appear on the invoice or similar document, by the person that sold the diesel fuel to the claimant that the diesel fuel sold did not contain visible evidence of dye.

(E) The total amount of diesel fuel covered by the claim.

(F) A properly executed bill of lading or similar document furnishing proof of exportation by the claimant.

(2) In lieu of claiming a refund of tax for export of tax-paid diesel fuel, if the claimant is a supplier, the claimant may take a credit on its diesel fuel tax return for tax-paid diesel fuel when, pursuant to the contract of sale, the diesel fuel is required to be shipped and is shipped to a point outside of this state by the supplier claiming the credit by any of the means described in subdivision (a)(1) above. The credit must be claimed on a return filed within three months after the close of the calendar month in which the export occurred. If the credit is not claimed on a return filed within three months after the close of the calendar month in which the export occurred, the supplier must file a claim for refund pursuant to Revenue and Taxation Code Sections 60501 through 60512 and this subdivision in order to obtain a refund of the amount of taxes paid.

(c) DOCUMENTATION. Any person claiming an exemption, refund or credit under this regulation must retain documentation to support the obligation to deliver diesel fuel out of state and to support the actual delivery of diesel fuel at an out of state location. Documentation may include, but is not limited to, contracts, bills of lading, delivery tickets, invoices and rack meter readings. The person claiming the exemption, refund or credit has the burden of proving that the diesel fuel was exported.

(d) DIVERSION OF DIESEL FUEL. Diesel fuel is not exported if it is diverted in transit or for any reason it is not actually delivered outside of the state, regardless of documentary evidence held by the person exporting the diesel fuel respecting delivery of the diesel fuel to a carrier for out-of-state shipment or to a vessel clearing for an out-of-state port. History: Adopted December 9, 1998, effective March 31, 1999.

Amended March 27, 2002, effective July 11, 2002. Subdivision (b)(2) amended to allow credit to be claimed on return filed within three months after the close of the calendar month in which the tax-paid fuel is exported.

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Regulation 1431. Diesel Fuel Used on a Farm for Farming Purposes.

Reference: Sections 60036, 60037, 60038, 60058, 60100, 60151, 60501, 60502, and 60512, Revenue and Taxation Code.

The following provisions and definitions apply for purposes of the exemption from the backup tax pursuant to Revenue and Taxation Code Section 60100(a)(5)(A), and the refund of tax to the ultimate vendor pursuant to Revenue and Taxation Code Section 60502.

(a) The term "used on a farm for farming purposes" applies only to diesel fuel which is used (i) in carrying on a trade or business of farming, (ii) on a farm in California, and (iii) for farming purposes.

(b) A person will be considered to be engaged in the "trade or business of farming" if the person cultivates, operates, or manages a farm for gain or profit, either as an owner or a tenant. A person engaged in forestry or the growing of timber is not thereby engaged in the trade or business of farming. A person who operates a garden plot, orchard, or farm for the primary purpose of growing produce for the person's own use is not considered to be engaged in the trade or business of farming. Generally, the operation of a farm does not constitute the carrying on of a trade or business if the farm is occupied by a person primarily for residential purposes or is used primarily for pleasure, such as for the entertainment of guests or as a hobby.

(c) The term "farm" is used in its ordinary and accepted sense, and generally means land used for the production of crops, fruits, or other agricultural products or for the sustenance of livestock or poultry. The term "livestock" includes cattle, hogs, horses, mules, donkeys, sheep, goats, and captive fur-bearing animals. The term "poultry" includes chickens, turkeys, geese, ducks, and pigeons. Thus, a farm includes livestock, dairy, poultry, fish, fruit, fur-bearing animals, and truck farms, plantations, ranches, nurseries, ranges, orchards, feed yards for fattening cattle, and greenhouses and other similar structures used primarily for the raising of agricultural or horticultural commodities. Greenhouses and other similar structures that are used primarily for purposes other than the raising of agricultural or horticultural commodities do not constitute farms, as for example, structures that are used primarily for the display, storage, fabrication, or sale of wreaths, corsages, and bouquets. A fish farm is an area where fish are grown or raised, as opposed to merely caught or harvested.

(d) Diesel fuel will be considered to be used for "farming purposes" when it is used on a farm by the owner, tenant, or operator of the farm in connection with the activities described in this subdivision. Diesel fuel will be considered to be used for "farming purposes" when it is used on a farm by a person other than the owner, tenant, or operator of the farm for any of the purposes described in subdivision (d)(1).

(1) Cultivating the soil, raising or harvesting any agricultural or horticultural commodity, or raising, shearing, feeding, caring for, training, or managing livestock, poultry, bees, or wildlife. Examples of operations which are considered to be operations for "farming purposes" within the meaning of this paragraph include plowing, seeding, fertilizing, weed killing, corn or cotton picking, threshing, combining, baling, silo filling, and chopping silage.

(2) Handling, drying, packing, grading, or storing any agricultural or horticultural commodity in its unmanufactured state, but only if the owner, tenant, or operator produced more than one-half of the commodity which was so treated during the year covered by the exemption certificate described in Revenue and Taxation Code Section 60503 which supports the claim for refund.

(3) Planting, cultivating, caring for, or cutting of trees that is incidental to the farming operations of the farm on which it is performed or incidental to the farming operations of the owner, tenant, or operator of the farm, or in connection with the preparation (other than milling) of trees for market that is incidental to these farming operations. These operations include the felling of trees and cutting them into logs or firewood but do not include sawing logs into lumber, chipping, or other milling operations. Operations of the prescribed character will be considered incidental to farming operations only if they are of a minor nature in comparison with the total farming operations involved. Therefore, a tree farmer or timber grower may not claim a refund under Revenue and Taxation Code Section 60502 with respect to diesel fuel used in connection with the trade or business of tree farming or timber growing.

(4) Operation, management, conservation, improvement, or maintenance of the farm and its tools and equipment. The activities included are those which contribute in any way to the conduct of the farm as such, as distinguished from any other enterprise in which the owner, tenant, or operator may be engaged. Examples of included operations are clearing land, repairing fences and farm buildings, building terraces or irrigation ditches, cleaning tools or farm machinery, and painting farm buildings. Since the diesel fuel must be used by the owner, tenant, or operator of the farm to which the operations relate, diesel fuel used by an organization which contracts with a farmer to renovate his farm properties is not used for farming purposes. Diesel fuel used in a lawn mower for maintaining a lawn is not used for farming purposes.

(e) Diesel fuel used in connection with the following operations which may occur on a farm will not be considered to be used for farming purposes:

(1) Canning, freezing, packaging, or processing operations. Thus, for example, although diesel fuel used on a farm in connection with the production or harvesting of maple sap or oleoresin from a living tree is considered to be used for farming purposes under paragraph (d)(1) above, diesel fuel used in the processing of maple sap into maple syrup or maple sugar or used in the processing of oleoresin into gum spirits of turpentine or gum resin is not used for farming purposes, even though these processing operations are conducted on a farm. (2) Processing operations which change a commodity from its raw or natural state, or operations performed with respect to a commodity after its character has been changed from its raw or natural state by a processing operation. For example, diesel fuel used for the extraction of juices from fruits or vegetables is used in a processing operation which changes the character of the fruits or vegetables from their raw or natural state and will not be considered to be used for "farming purposes."

(f) The diesel fuel tax does not apply to diesel fuel used in the operation of an implement of husbandry, truck or farm tractor which does not require registration under the Vehicle Code, which is used on a farm for farming purposes and which only incidentally is operated upon a highway in moving between farms or parts of farms which are in close proximity. For purposes of this subdivision, "incidentally operated" does not include the use of agricultural vehicles for the transportation of persons or property upon the highways in an operation which requires registration of the vehicle under the Vehicle Code.

History: Adopted December 9, 1998, effective March 31, 1999.

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Regulation 1432. Other Nontaxable Uses of Diesel Fuel in a Motor Vehicle.

Reference: Sections 60016, 60019, 60026, 60501, and 60502, Revenue and Taxation Code.

(a) POWER TAKE-OFF EQUIPMENT.

(1) A person may claim a refund for tax paid on diesel fuel used to operate power take-off equipment. Power take-off equipment is generally defined to be an accessory which is mounted onto a transmission allowing power to be transferred outside the transmission to a shaft or driveline. The accessory is usually either a small gearbox with an external shaft, or a short shaft with a driveline yoke assembly for attaching an external driveline. The vehicle's transmission must be specially designed for a power take-off.

(2) Power take-off equipment may be found, for example, on boom trucks (block boom), bulk feed trucks, car carriers or trucks with hydraulic winches, carpet cleaning vans, cement mixers, distribution trucks (hot asphalt), dump trailers, dump trucks, fire trucks, leaf trucks, lime spreaders, line trucks (digger/derrick), aerial lift trucks, milk tank trucks, mobile cranes, pneumatic tank trucks, refrigeration trucks, salt spreaders (dump with spreader), sanitation trucks, seeder trucks, semi-wreckers, service trucks with jackhammers, pneumatic drills, sewer cleaning trucks (sewer jet, sewer vactor), snow plows, spray trucks, sweeper trucks, tank trucks, tank transports and wreckers.

(b) OFF-HIGHWAY USE.

(1) A person may claim a refund for tax paid on diesel fuel used off the highway. "Off the highway" includes private property, a way or place permanently or temporarily closed to public use for the purpose of vehicular travel, or any way or place used for vehicular travel which is not a highway as defined in Regulation 1411.

(2) If the diesel fuel is used in the operation of construction equipment which is exempt from registration under the Vehicle Code, the user must establish to the satisfaction of the Board that the diesel fuel is used in the operation of the construction equipment while operated within the confines or limits of a construction project and only incidentally operated on the highway within such confines or limits.

(3) As used in subdivision (2), "incidentally operated" does not include the use of special construction equipment for the transportation of persons or property upon the highways in an operation which requires registration of the vehicle under the Vehicle Code.

(c) REFUNDS. Persons who acquire diesel fuel tax paid and subsequently use the diesel fuel in power take-off equipment or off the highway are entitled to a refund of the diesel fuel tax paid for that fuel. Persons claiming a refund may use any method to calculate the amount of refund, including computing a percentage of the fuel used for nontaxable purposes. It is the responsibility of the person claiming the refund to document and support the amount claimed.

(d) IDLE TIME. Diesel fuel consumed in motor vehicles on the highway is subject to the diesel fuel tax whether the motor vehicle is moving or idling, and no refunds will be allowed for diesel fuel tax paid on diesel fuel which is used to idle a vehicle on the highway. If the vehicle is idling on the highway while power take-off equipment is in use, a refund will be allowed for the diesel fuel tax paid on that portion of the diesel fuel which is used to operate the power take-off equipment; however, no refund will be allowed for the diesel fuel tax paid on that portion of the diesel fuel which is used for idling.

History: Adopted December 9, 1998, effective March 31, 1999.

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Regulation 1433. Refund of Tax on Diesel Fuel Lost in the Course of Handling, Transportation, or Storage.

Reference: Sections 60501–60512, Revenue and Taxation Code.

(a) The Board will refund the tax paid on diesel fuel which is lost in the course of handling, transportation or storage provided that:

(1) The tax-paid diesel fuel was lost under circumstances beyond the claimant's control such as fire, flood, accidental spillage or leakage, or natural catastrophe; or

(2) The tax-paid diesel fuel was lost through the accidental conversion of undyed diesel fuel to dyed diesel fuel; or

(3) The tax-paid diesel fuel was lost through the intentional conversion of undyed diesel fuel to dyed diesel fuel in the ordinary course of handling (such as purging hoses).

(b) Tax-paid diesel fuel will qualify as lost under subsections (a)(2) or (3) above only if the fuel that was converted from undyed fuel to dyed fuel is sold as dyed diesel fuel.

(c) No refund will be made based on losses of diesel fuel which occur due to evaporation or shrinkage.

(d) A person who loses fuel in the course of handling, transportation or storage may file a claim for refund with the Board pursuant to Revenue and Taxation Code Sections 60501 through 60512 in order to obtain a refund of the diesel fuel tax paid on the lost fuel.

History: Adopted December 9, 1998, effective March 31, 1999.

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Regulation 1434. Sales of Diesel Fuel to the United States and its Agencies and Instrumentalities.

Reference: Sections 60100, 60501, 60502, and 60508, Revenue and Taxation Code.

(a) IN GENERAL. The diesel fuel tax does not apply to the sale of diesel fuel to the United States and its agencies and instrumentalities. Examples of the United States and its agencies or instrumentalities include, but are not limited to, the American Red Cross, U.S. Postal Service, branches of the armed services, military exchanges, and agencies such as the USDA Forest Service and the Department of Housing and Urban Development.

(b) SALES OF EX-TAX DIESEL FUEL. A supplier licensed under the Diesel Fuel Tax Law that makes sales of ex-tax diesel fuel to the United States and its agencies and instrumentalities, may claim an exemption on its diesel fuel tax return.

(c) SALES OF TAX-PAID DIESEL FUEL.

(1) A supplier licensed under the Diesel Fuel Tax Law that makes sales of tax-paid diesel fuel to the United States and its agencies and instrumentalities may claim a credit on its diesel fuel tax return. The tax-paid fuel may be sold in bulk or through any company-owned retail service station.

(2) A person licensed as an ultimate vendor under the Diesel Fuel Tax Law who makes a sale of tax-paid fuel to the United States and its agencies and instrumentalities may claim a refund on its diesel fuel tax claim for refund referenced in subdivision (d).

(3) A diesel fuel seller not required to be licensed under the Diesel Fuel Tax Law, including, but not limited to, a wholesaler, access card issuer or service station operator may file a claim for refund of tax on its sales of tax-paid diesel fuel to the United States and its agencies and instrumentalities as to those gallons of diesel fuel it sells ex-tax to the United States and its agencies and instrumentalities. The claim for refund may only be filed by the person that owned the tax-paid diesel fuel and directly sold the tax-paid diesel fuel to the United States and its agencies and instrumentalities.

"Access card issuer" means a person that issues to a customer an access card or code or similar access device which entitles the customer to obtain fuel owned by the access card issuer at participating fuel dispensing sites. As used in this regulation "fuel owned by the access card issuer" means fuel owned by the access card issuer at its own fuel dispensing site or fuel purchased by the access card issuer from an operator of a fuel dispensing site at the time that the fuel is dispensed to the United States and its agencies and instrumentalities.

(d) CONTENTS OF CLAIM FOR REFUND. A claim for refund filed by a diesel fuel seller who is not an ultimate vendor shall contain the information required by Revenue and Taxation Code § 60501(b). A claim for refund filed by an ultimate vendor shall contain the information required by Revenue and Taxation Code § 60502(c).

(e) DOCUMENTATION FOR BULK TRANSACTIONS. Any person claiming an exemption, credit, or refund for bulk sales of diesel fuel to the United States and its agencies and instrumentalities, must retain supporting documentation. Documentation may include, but is not limited to:

(1) A copy of the United States government purchase order or other documentation authorizing the purchase of the diesel fuel.

(2) A copy of the billing invoice or other documents identifying the United States and its agencies and instrumentalities as the purchaser of the diesel fuel, the invoice billing date, the invoice billing number, the number of diesel fuel gallons sold to the United States and its agencies and instrumentalities and a clear indication that no diesel fuel tax reimbursement was collected from the United States and its agencies and instrumentalities.

(3) Documentation showing that the diesel fuel in question was acquired ex-tax by a licensed supplier claiming the exemption.

(4) Documentation showing that the diesel fuel in question was acquired tax-paid by a person claiming the credit or refund.

(f) DOCUMENTATION FOR NON-BULK TRANSACTIONS. Any person claiming a credit or filing a claim for refund on retail sales of tax-paid fuel sold in non-bulk quantities, including credit card sales to the United States and its agencies and instrumentalities, must retain supporting documentation. Documentation may include, but is not limited to:

(1) A copy of the billing invoice or other documentation identifying the United States and its agencies and instrumentalities as the purchaser of the diesel fuel, the invoice billing date, the invoice billing number, the number of diesel fuel gallons sold to the United States and its agencies and instrumentalities and a clear indication that no diesel fuel tax reimbursement was collected from the United States and its agencies and instrumentalities.

(2) Documentation showing that the diesel fuel in question was acquired tax-paid by a person claiming the credit or refund.

(3) A copy of the credit card receipt or listing of credit card transactions provided by the card processor, identifying the United States and its agencies and instrumentalities as the purchaser of the diesel fuel, the date of the transaction, the record number of the receipt, and the number of diesel fuel gallons sold to the purchaser.

(4) A copy of the charge back of the tax to the retailer by the credit card processor.

History: Adopted February 6, 2002, effective June 12, 2002.

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Regulation 1435. Tax Paid Twice on Diesel Fuel.

Reference: Sections 60051, 60052, 60501, 60507, 60508deletion, and 60521.5, Revenue and Taxation Code.

(a) A supplier who removes diesel fuel from a terminal rack on which a prior tax was paid to the state may either file a claim for refund with the Board or in lieu of a refund take a credit on its tax return.

(b) CONDITIONS TO ALLOW A CREDIT ON A TAX RETURN.

The credit will be allowed only if:

(1) A tax imposed on the diesel fuel by Sections 60051 and 60052 was paid to the state by reporting the gallons on a tax return and was not credited or refunded (the "first tax" or "first taxpayer");

(2) After imposition of the first tax, another tax was imposed on the diesel fuel by Sections 60051 and 60052 and was paid to the state by reporting the gallons on a tax return (the "second tax" or "second taxpayer");

(3) The person that paid the second tax to the state claims a credit on a tax return filed within three months after the close of the calendar month in which the second tax was reported to the state;

(4) The person that paid the first tax to the State has met the reporting requirements of paragraph (c) of this section; and

(5) A copy of the first taxpayer's report and any copies of statements of subsequent seller must be retained for inspection by the Board with the tax return on which the credit is claimed.

(c) REPORTING REQUIREMENTS.

(1) Reporting by persons paying the first tax.

Except as provided in paragraph (c)(2) of this section, the person that paid the first tax under Section 60051 and 60052 (the first taxpayer) must file a report that is in substantially the same form as the model report provided in Exhibit A and contains all information necessary to complete such model report (the first taxpayer's report). A first taxpayer's report must be retained for inspection by the Board with the tax return on which the first tax was paid or reported.

(2) Optional reporting for certain taxable events.

Paragraph (c)(1) does not apply with respect to a tax imposed under Section 60051 (removal at a terminal rack), Section 60052(b)(2) (nonbulk entries into the state), or Section 60052(d) (removals or sales by blenders). However, if the person liable for the tax expects that another tax will be imposed under Sections 60051 and 60052 with respect to the fuel, that person should file a first taxpayer's report.

(3) Information provided to subsequent owners, etc.

(A) By Person Required to File First Taxpayer's Report.

A first taxpayer required to file a first taxpayer's report under paragraph (c)(1) of this section must give a copy of the report to:

(1) The person to whom the first taxpayer sells the diesel fuel within the bulk transfer/terminal system; or

(2) The owner of the diesel fuel immediately before the imposition of the first tax, if the first taxpayer is not the owner at that time.

(B) By Person Filing Optional First Taxpayer's Report. A first taxpayer filing a first taxpayer's report under paragraph (c)(2) of this section should give a copy of the report to:

(1) The person to whom the first taxpayer sells the diesel fuel; or

(2) The owner of the diesel fuel immediately before the imposition of the first tax, if the first taxpayer is not the owner at that time.

(C) By Person Receiving First Taxpayer's Report.

(1) Bulk Transfer/Terminal System Transaction

A person that receives a copy of the first taxpayer's report and subsequently sells the diesel fuel within the bulk transfer/terminal system must give the copy and a statement that satisfies the requirements of paragraph (c)(3)(D) of this section to the buyer.

(2) Rack and Below Rack Transaction

A person that receives a copy of the first taxpayer's report and subsequently sells the diesel fuel outside the bulk transfer/terminal system should give the copy and a statement that satisfies the requirements of paragraph (c)(3)(D) of this section to the buyer, if that person expects that another tax will be imposed under Sections 60051 and 60052 with respect to the diesel fuel.

(D) Form of Statement.

A statement satisfies the requirements of this paragraph (c)(3)(D) if it is provided at the bottom or on the back of the copy of the first taxpayer' s report (or in an attached document). This statement must contain all information necessary to complete the model statement provided in Exhibit B but need not be in the same format.

(E) Sale to Multiple Buyers.

If the first taxpayer's report relates to diesel fuel divided among more than one buyer, multiple copies of the first taxpayer's report must be made at the stage that the diesel fuel is divided and each buyer must be given a copy of the report.

(d) CLAIM FOR REFUND.

If the supplier fails to take a credit on a tax return filed within three months after the close of the calendar month in which the second tax was imposed, the supplier may only file a claim for refund with the Board to recover the tax.

Each claim for a refund must contain the following information with respect to the fuel covered by the claim:

(1) The information required in Section 60501.

(2) Volume and type of diesel fuel.

(3) Date on which the claimant incurred the tax liability to which this claim relates (the second tax).

(4) Amount of second tax that claimant paid or reported to the state and the tax return on which it was paid or reported.

(5) A statement that claimant has not separately stated on the sales invoice reimbursement for both the first tax and the second tax or has not included in the sales price of the diesel fuel reimbursement for both the first tax and the second tax. The second taxpayer can only receive reimbursement for one tax from the customer.

(6) A copy of the first taxpayer's report that relates to the diesel fuel covered by the claim.

(7) If the diesel fuel covered by the claim was bought other than from the first taxpayer, a copy of the statement of subsequent seller that the claimant received with respect to that diesel fuel.

History: Adopted March 27, 2002, effective July 11, 2002.

Amended May 31, 2012, effective July 10, 2012. Change without regulatory effect replacing the reference to Revenue and Taxation Code section "60508.4" with a reference to Revenue and Taxation Code section "60508" in the reference note to reflect amendments made to the Diesel Fuel Tax Law by Assembly Bill No. 1547 (Stats. 2009, ch. 545).

EXHIBIT A
FIRST TAXPAYER'S REPORT

 

1. First Taxpayer's Board of Equalization supplier account number

 

2. First Taxpayer's name, address, and employer identification number

 

3. Name, address, and employer identification number of the buyer of the diesel fuel subject to tax

 

4. Date and location of removal, entry, or sale

and document number ____________________________________

 

5. Volume and type of motor vehicle fuel removed, entered, or sold

6. Check type of taxable event:
___ Removal from refinery
___ Entry into United States or state
___ Bulk transfer from terminal by unregistered position holder
___ Bulk transfer not received at an approved terminal
___ Sale within the bulk transfer/terminal system
___ Removal at the terminal rack
___ Removal or sale by the blender

7. Amount of Federal excise tax paid and State diesel fuel tax paid on account of the removal, entry, or sale

 

8. Location of IRS service center where this report is filed _______________________________________________

and State reporting period of payment _______________________________________________________________

The undersigned taxpayer (the "Taxpayer") has not received, and will not claim, a credit with respect to, or a refund of, the tax on the motor vehicle fuel to which this form relates.

Under penalties of perjury, the Taxpayer declares that Taxpayer has examined this statement, including any accompanying schedules and statements, and, to the best of Taxpayer's knowledge and belief, they are true, correct and complete.

 

Signature and date signed

 

Printed or typed name of person signing this report

 

Title

 

EXHIBIT B
STATEMENT OF SUBSEQUENT SELLER

 

1. Board of Equalization supplier account number or prepaid sales tax account number

 

2. Name, address, and employer identification number of seller in subsequent sale

 

3. Name, address, and employer identification number of buyer in subsequent sale

 

4. Date and location of subsequent sale

and document number ____________________________________________________

 

5. Volume and type of diesel fuel sold

The undersigned seller (the "Seller") has received the copy of the first taxpayer's report provided with this statement in connection with Seller's purchase of the diesel fuel described in this statement.

Under penalties of perjury, Seller declares that Seller has examined this statement, including any accompanying schedules and statements, and, to the best of Seller's knowledge and belief, they are true, correct and complete.

 

Signature and date signed

 

Printed or typed name of person signing this report

 

Title

 

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Regulation 1436. Returned Sales.

Reference: Sections 60025, 60501, and 60508deletion, Revenue and Taxation Code.

(a) When diesel fuel included in a supplier's taxable removals, entries or sales is returned to the supplier by the customer to whom it was sold and is delivered into a refinery or an approved terminal's storage tank, the supplier may either file a claim for refund with the Board or in lieu of the refund take a credit on its tax return. The credit memorandum covering the return of the diesel fuel shall identify the gallonage returned as either volumetric gallons or temperature corrected gallons based upon how the tax was originally invoiced to the customer and shall separately state the diesel fuel tax.

(b) It shall be presumed that the supplier purchased the diesel fuel that was returned as tax-paid diesel fuel if the credit memorandum includes diesel fuel tax. For the purpose of a refund or credit, it also shall be presumed that the subsequent removal of the diesel fuel from a terminal rack by the supplier that received the returned diesel fuel is made in the month that the diesel fuel was returned.

(c) CONDITIONS TO ALLOW A CREDIT ON A TAX RETURN.

The credit will be allowed only if:

(1) The returned diesel fuel was delivered into a refinery or an approved terminal storage tank.

(2) The credit is taken on a tax return filed within three months after the close of the calendar month in which the diesel fuel is returned.

(3) The supplier prepares a first taxpayer's report (as identified in Regulation 1435) when the diesel fuel is returned.

(4) A copy of the first taxpayer's report and the credit memorandum must be retained for inspection by the Board with the tax return on which the credit is claimed.

(d) If the supplier fails to take a credit on a tax return filed within three months after the close of the calendar month in which the diesel fuel was returned, the supplier may only file a claim for refund with the Board to recover the tax.

Each claim for a refund must contain the following information with respect to the diesel fuel covered by the claim:

(1) The information required in Section 60501.

(2) Volume and type of diesel fuel.

(3) Date on which the claimant received the returned diesel fuel.

(4) A copy of the first taxpayer's report that relates to the diesel fuel covered by the claim.

(5) A copy of the credit memorandum that returned the diesel fuel.

History: Adopted March 27, 2002, effective July 11, 2002.

Amended May 31, 2012, effective July 10, 2012. Change without regulatory effect replacing the reference to Revenue and Taxation Code section "60508.4" with a reference to Revenue and Taxation Code section "60508" in the reference note to reflect amendments made to the Diesel Fuel Tax Law by Assembly Bill No. 1547 (Stats. 2009, ch. 545).

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Regulation 1470. Records.

Reference: Sections 60044, 60107, 60201, 60202, 60204, 60204.5, 60205, 60205.5, 60206, 60604, 60605, and 60606, Revenue and Taxation Code.

(a) GENERAL. A taxpayer shall maintain and make available for examination on request by the board or its authorized representatives, records in the manner set forth at California Code of Regulations, Title 18, Section 4901.

(b) SPECIFIC APPLICATIONS. In addition to the record keeping requirements set forth in subdivision (a), suppliers, ultimate vendors, retail vendors, and users shall comply with the following requirements.

(1) SUPPLIER'S RECORDS. A supplier shall maintain complete records of all rack removals, sales, imports, and exempt dispositions including exemption certificates, self-consumed diesel fuel, inventories, purchases, receipts, and tank gaugings or meter readings, of diesel and any other fuel that is required to be accounted for on the supplier's return or report. Such records include but are not limited to:

(A) Refinery Reports related to the production of diesel fuel.

(B) Inventory reconciliation by location.

(C) Storage inventory reports.

(D) List of storage locations.

(E) Tax returns from other states to support export claims.

(F) Cardlock statements.

(G) Calculations or formulas to support off-highway exempt usage.

(H) First Taxpayer Reports.

(I) Support for claimed Supplier bad debts.

(2) ULTIMATE VENDOR'S RECORDS. An ultimate vendor shall maintain complete records of all sales, exports, or other dispositions of tax-paid diesel fuel for which a claim for refund is being made, including exemption certificates, self-consumed fuel, inventories, purchases, receipts, and tank gaugings or meter readings, of diesel fuel and any other fuel the use of which is accounted for on the ultimate vendor's claim for refund. Such records may include but are not limited to:

(A) Purchase invoices for undyed tax-paid diesel fuel.

(B) Purchase invoices for dyed ex-tax diesel fuel.

(C) Delivery tickets for diesel fuel exported.

(D) Tax returns from other states to support diesel fuel export claims.

(E) Copies of United States Government purchase orders or United States Government credit card receipts.

(F) Cardlock statements.

(G) Calculations or formulas to support off-highway exempt usage of diesel fuel.

(3) ULTIMATE VENDOR'S SALES INVOICES. The ultimate vendor shall prepare a serially numbered invoice for each sale of diesel fuel. A single invoice or a single cardlock statement covering multiple deliveries of diesel fuel made during a period of time not to exceed a calendar month shall constitute an invoice for each sale. If the multiple delivery invoice or cardlock statement includes both tax-exempt deliveries with respect to which the ultimate vendor is excused from collecting the tax and deliveries upon which the tax is required to be collected, the invoice or cardlock statement shall contain or be accompanied by a statement showing separately the deliveries and gallonage upon which the tax is collected and the tax-exempt deliveries and gallonage. The invoice or cardlock statement shall be delivered to the purchaser, and a copy thereof shall be retained by the ultimate vendor.

A sales invoice or cardlock statement shall contain the following information:

(A) The name and address of the ultimate vendor.

(B) The name of the purchaser.

(C) The date of sale.

(D) The number of gallons of diesel fuel sold, the price per gallon and the total amount of the sale.

(E) The amount of the diesel fuel tax collected; however, the amount of the tax collected need not be separately stated if the invoice bears the notation that the price includes the tax.

(F) A statement that there is no evidence of dye in the undyed diesel fuel included in the invoice or cardlock statement.

(G) The dyed diesel fuel notice for dyed diesel fuel included in the invoice or cardlock statement.

(4) RECEIPT FOR TAX PAID TO A RETAIL VENDOR. The sales invoice shall upon payment by the purchaser constitute a receipt for the amount of diesel fuel tax included therein collected by the retail vendor.

The sales invoice shall contain the information in (A), (B), (C) and (D). The sales invoice or similar document shall also include the information in (E) and (F).

(A) The name and address of the retail vendor.

(B) The date of sale.

(C) The number of gallons of diesel fuel sold, the price per gallon and the total amount of the sale.

(D) The amount of the diesel fuel tax collected, however, the amount of the tax collected need not be separately stated if the invoice bears the notation that the price includes the tax.

(E) A statement that there is no evidence of dye in the undyed diesel fuel included in the invoice.

(F) The dyed diesel fuel notice for dyed diesel fuel included in the invoice.

(5) USER'S RECORDS. The user shall maintain complete records of self- consumed diesel fuel, inventories, purchases, receipts, and tank gaugings or meter readings, of diesel fuel and any other fuel the use of which is subject to the diesel fuel tax. Records shall also support any calculations or formulas used to claim exempt percentages of exempt usage of diesel fuel.

(6) USER'S INVOICES. Users of diesel fuel subject to the tax shall obtain from the retail vendor of the diesel fuel and retain in their files an invoice for each delivery of such diesel fuel into the fuel tank or tanks of each vehicle operated by them and for each delivery into their bulk storage tank or tanks. These invoices shall set forth the information specified in subsection (b)(4) of this regulation and shall be filed or identified in a systematic manner so that they may readily be traced into their purchase or expense records and into their tax returns or claims for refund to the board.

Users should keep as part of their records a detail of figures upon which are based the totals set forth on their tax returns or claims for refund to the board. When diesel fuel is placed into the fuel tank of a qualified motor vehicle, either the user or the retail vendor should indentify on the invoice the qualified motor vehicle into which the diesel fuel was placed. All individual invoices supporting charge accounts which include purchases of diesel fuel shall be retained by the user in such manner as to enable the representatives of the board to establish the identity of all the merchandise or service included in the total charge and the specific gallonage of diesel fuel purchased.

History: Adopted December 9, 1998, effective March 31, 1999.

Amended February 5, 2003, effective May 28, 2003. The underscored citation indicates an electronic hyperlink to the cite. Common administrative provisions for special taxes programs have been consolidated in Chapter 9.9 Special Taxes Administration. General record keeping requirements can be found at the cite referenced in subdivision (a). Subdivision (b) has been added to identify additional record keeping requirements for diesel fuel suppliers.