Licensed Diesel Fuel Suppliers - Filing Claims for Refund

Diesel fuel suppliers are required to file a tax return, form BOE-501-DD, Supplier of Diesel Fuel Tax Return, with the Board of Equalization. As defined in Diesel Fuel Tax Law section 60033, a “Supplier” includes any person who is any of the following: blender, enterer, position holder, refiner, terminal operator, or throughputter.

The following types of tax-paid credits may be allowed on the Supplier of Diesel Fuel Tax Return, in lieu of filing a claim for refund:

  • Tax-paid fuel exported. See Regulation 1430, Shipments Out of State. If you do not take a credit on a tax return filed within three months after the close of the calendar month in which the export was made, you must file a claim for refund with us to recover the tax.
  • Tax-paid fuel sold to a consulate officer or employee by credit card. See sections 60501(a)(4)(F) and 60508.1 of the Diesel Fuel Tax Law.
  • Tax-paid fuel sold to the United States government. See Regulation 1434, Sales of Diesel Fuel to the United States and Its Agencies and Instrumentalities.
  • Tax-paid fuel sold for use on farms. See Regulation 1431, Diesel Fuel Used on a Farm for Farming Purposes, and sections 60502 and 60508.2 of the Diesel Fuel Tax Law.
  • Tax-paid fuel sold to exempt bus operators. See sections 60040, 60502, and 60508.2 of the Diesel Fuel Tax Law.
  • Tax-paid fuel sold to train operators. See section 60501(a)(4)(I) of the Diesel Fuel Tax Law.
  • Tax-paid diesel fuel used off-highway. See Regulation 1432, Other Nontaxable Uses of Diesel Fuel in a Motor Vehicle.
  • Tax-paid diesel fuel removed from the rack when tax is paid twice. See Regulation 1435, Tax Paid Twice on Diesel Fuel. If you do not 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, you must file a claim for refund with us to recover the tax.

Returned Sales

You may be able to take credit for returned sales for diesel fuel included in your taxable removals, entries, or sales that is:

  • returned to the licensed supplier
  • by the customer to whom it was sold,

and is delivered into a refinery or an approved terminal storage tank.

If you do not 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, you must file a claim for refund with us to recover the tax.

For further guidance, see Regulation 1436, Returned Sales.

Bad Debts

When you find that a customer has not paid the amount owed for diesel fuel purchases you may claim a bad debt loss credit. See section 60201.3 of the Diesel Fuel Tax Law.

You may claim a bad debt loss credit when you:

  • cannot collect an amount a customer owes on the sale of diesel fuel,
  • find the customer’s account worthless and charge it off for income tax purposes, and
  • have paid the diesel fuel tax on the sale with your Supplier of Diesel Fuel Tax Return.

You may either claim a credit on Summary Schedule S04 for the reporting period in which you find the customer’s account worthless or you may file a form BOE-101, Claim for Refund or Credit, for the amount of tax overpaid. Generally, you must file the claim for refund or claim the credit within three years of the date the tax return was due for the reporting period in which you charged off the sale for income tax purposes.

If you receive payment on a bad debt after you have filed a claim for refund or claimed a credit, you must report the payment as a taxable transaction on the first return filed after receipt of payment.

You should maintain the following information and records to document a bad debt deduction:

  • Date of the original sale of the diesel fuel
  • Name and address of the purchaser
  • Number of gallons and dollar amount of bad debt
  • Invoices that show the tax was charged
  • Amount of tax you paid on the transaction to the state
  • All payments or other credits applied to the purchaser’s account
  • Evidence that the debt has been properly charged off for income tax purposes

Diesel Fuel Lost In The Course of Handling, Transportation, Or Storage

If you lose fuel in the course of handling, transportation, or storage, you may file a claim for refund with Special Taxes and Fees under section 60501(a)(4)(G) of the Diesel Fuel Tax Law. For further guidance, see Regulation 1433, Refund of Tax on Diesel Fuel Lost in the Course of Handling, Transportation or Storage. You may not take a credit instead of filing a claim for refund. We cannot grant refunds based on losses of diesel fuel that occur due to evaporation, shrinkage, or theft.

Diesel Fuel Supplier Frequently Asked Questions (FAQs)