Diesel User Claim for Refund Frequently Asked Questions (FAQ) - Filing Claims for Refund

  1. Licensing and Forms
    1. Do I need an account to file a claim for refund for nontaxable diesel uses?
    2. How do I obtain an account number?
    3. What form do I use to file a claim for refund for nontaxable uses of diesel fuel?
  2. Documentation
    1. What records or documents do I need to provide to support my claim for refund?
    2. Do I have to submit copies of purchase invoices with every claim?
    3. Is an exemption certificate required for dyed diesel fuel?
  3. Types of Claims
    1. May I file a claim for refund for diesel fuel used in my refrigeration (reefer) units?
    2. Does California have standard percentages for exempt use?
    3. I lease diesel vehicles for periods greater than 30 days from owner-operators. Why can't I include the owner-operator tax-paid off-highway and PTO gallons in my DU claim for refund, but I can include the gallons in my IFTA return?
    4. How will the Air Resources Board "five-minute idle" rule affect my DU claims for off-road idle?
    5. Can I claim a refund for stolen fuel?
    6. I own a rental yard and charge my customers a daily rental plus a charge to refill the equipment fuel tank when the equipment is returned. May I claim a refund for the tax on fuel used in this off-road equipment?
  4. Testing
    1. I need to conduct a fuel test to support my nontaxable usage. What steps do I have to take before I can begin testing?
    2. How do I submit a test proposal for exempt use?

  1. Do I need an account to file a claim for refund for nontaxable diesel uses?

    Yes. You must apply for an account number before filing a claim for refund. In addition, first-time diesel user filers will be asked to submit a completed Diesel Questionnaire. Suppliers may also take a credit/refund on Schedule SO3A of their form BOE-501-DD, Supplier of Diesel Fuel Tax Return.

  2. How do I obtain an account number?

    You may register for an account using online electronic registration (eReg). eReg is the convenient way to register and is available 24 hours a day.

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  3. What form do I use to file a claim for refund for nontaxable uses of diesel fuel?

    You must use form BOE-770-DU Diesel Fuel Claim for Refund on Nontaxable Uses.

  4. What records or documents do I need to provide to support my claim for refund?

    That depends on the reason for the claim. Generally, you must be able to show that you paid tax on the diesel fuel and used the fuel in a nontaxable manner. Examples of acceptable documentation include inventory records, fuel logs, purchase receipts or invoices, tank or meter readings, and worksheets showing the calculations or formula used to claim percentages of nontaxable usage of diesel fuel. We may request additional information during the review of your claim for refund.

  5. Do I have to submit copies of purchase invoices with every claim?

    No. However, please submit copies of purchase invoices with the first claim you file. After that, we generally ask for copies once a year or possibly at irregular intervals. In order to receive a refund, you must provide invoices when we request them.

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  6. Is an exemption certificate required for dyed diesel fuel?

    No. You do not pay the diesel fuel tax when purchasing dyed diesel fuel. However, dyed diesel fuel may only be used to operate vehicles or equipment off-highway. You will be subject to the tax and a penalty if you operate a motor vehicle on a highway in California with dyed diesel fuel in the supply tank.

  7. May I file a claim for refund for diesel fuel used in my refrigeration (reefer) units?

    Yes. The consumption of diesel fuel to operate reefer unit supplied from a fuel tank that is separate from the vehicle’s fuel tank or to operate a reefer unit supplied from the fuel tank of the vehicle is a nontaxable use. However, you must have detailed documentation or test data to support the claimed nontaxable use.

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  8. Does California have standard percentages for nontaxable use?

    No. There are no authorized standard percentages that can be used to compute your diesel fuel tax refund. Testing is required to claim nontaxable usage on a percentage basis.

  9. I lease diesel vehicles for periods greater than 30 days from owner-operators. Why can’t I include the owner-operator tax-paid off-highway and PTO gallons in my DU claim for refund when I can include the gallons in my IFTA return?

    Diesel fuel tax can be refunded only to the person or entity that paid the tax. If your owner-operators pay for their own diesel fuel, either directly or by way of settlement, you are not eligible to claim a refund of the tax. Since owner-operator gallons are paid for and used by the owner-operators themselves, these operators must file for their nontaxable uses, not the company that hired them. Payment of the IFTA taxes is governed by the IFTA Agreement section R530.200, which provides that, under long-term leases, the lessor and the lessee can designate which party will report and pay the tax. The IFTA agreement does not extend to DU claims for refund.

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  10. How will the Air Resources Board "five-minute idle" rule affect my DU claims for off-road idle?

    Off-highway idle claims will be limited to five minutes per event unless the event is documented as sleeper berth or waiting in line to load/unload.

  11. Can I claim a refund for stolen fuel?

    No. However, we will refund the tax paid on diesel fuel that is lost in the course of handling, transportation, or storage under certain circumstances. See Regulation 1433.

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  12. I own a rental yard and charge my customers a daily rental plus a charge to refill the equipment fuel tank when the equipment is returned. May I claim a refund for the tax on fuel used in this off-road equipment?

    No. You may not claim a refund for the tax, but your customers can. The refund is due to your customers because they are the persons using fuel off the highway.

  13. I need to conduct a fuel test to support my nontaxable usage. What steps do I have to take before I can begin testing?

    You may call our Tax Information Section at 800-400-7115 to discuss your nontaxable activities. Then, we recommend you submit a written test proposal for our review before you begin testing. It is advisable not to delay your test until you receive our approval.

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  14. How do I submit a test proposal for nontaxable use?

    Test proposals may be mailed to: Board of Equalization, Special Taxes and Fees, MIC: 33, P.O. Box 942879, Sacramento, CA 94279-0033. Test proposals should include:

    • description of the activities to be tested,
    • proposed test procedures and parameters, number of vehicles to be tested,
    • length of test period, and
    • why you believe the test will provide results representative of your activities.

    The test should provide documented test results that are verifiable and representative of the diesel fuel used in the nontaxable manner. Usage tests must describe the process, the vehicles tested and the date of the tests. The test results should be performed periodically to ensure the formulas are accurate for current equipment and operating situations. The calculation of the percentage of diesel fuel used for PTO operations cannot include diesel fuel used for idling the vehicle's engine.

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