Does the partial
sales and use tax exemption on diesel fuel used
for farming and food processing also apply to sales
of red-dyed fuel?
Yes, if the red-dyed fuel is used
in a manner that qualifies for the exemption. Details about
uses of diesel fuel that qualify for the partial exemption
can be found on the Board's AB 426 diesel
fuel exemption webpage and in Regulation 1533.2.
My company contracts
with ranchers to deliver livestock to the marketplace.
Do our purchases of diesel fuel qualify for a partial
exemption?
They may qualify. Under the provisions
of the diesel fuel partial exemption, farming activities
include the transportation and delivery of farm products
to the marketplace. The partial exemption applies whether
the farmer, or a hauler under contract with farmer, purchases
the diesel fuel for this activity. For more information
about qualified farming activities and the meaning of "marketplace," please
read the Board's AB 426 diesel fuel exemption
webpage and in Regulation 1533.2.
I have a
customer that operates a ranch where he raises cattle
and also operates a second business. He transports the
product from the second business to market with his own
trucks. Will his purchases of diesel fuel qualify for
the partial exemption?
The diesel fuel partial exemption applies
to the sale or use of diesel used in farming activities
or food processing. "Farming activities" mean a trade or
business involving the cultivation of land or the raising
or harvesting of any agricultural or horticultural commodity
that may be legally sold to or offered for sale to others.
The term also means the transportation and delivery of
farm products to the marketplace. If your customer's second
business does not qualify as a farming activity, the purchase
of the diesel fuel to transport the product will not qualify
for the partial exemption.
What specific
information is required on a partial exemption
certificate for qualified purchases of diesel fuel?
A partial exemption certificate for purchases of
diesel fuel is available on the Board's website.
The sample certificate details the specific information that
you must provide for claiming the partial exemption. You may
also obtain a copy of the certificate by contacting our Information
Center at (800) 400-7115.
