Tax Guide for Gas Station Operators
Getting Started

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If you are starting a business in California, and you expect to be making taxable sales, you must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit to report sales and use tax and regularly file tax returns. You may be required to register for other licenses or accounts, and file other returns. Listed below are some tax/fee programs that are often applicable to a gas station operator.

Underground Storage Tanks Maintenance Fee Program

If you own an underground storage tank (UST) to store gasoline, diesel fuel, waste oil, heating oil, or other petroleum products, even if the UST is only partially underground, you are required to register with us for a UST maintenance fee account and to pay a fee on each gallon of petroleum product placed into a UST.

You may consolidate multiple locations on one return if you are the owner of underground storage tanks at multiple locations. You will need to identify each location. You must also have a permit issued by your local city or county agency. For further information regarding local permits, visit the State Water Resources Control Board's website.

In most cases, if you lease a UST, you are not considered the owner and are not required to pay the fee. However, owners can arrange for the operator to report the fees on their behalf by completing the Payment of Fee by Operator form. Please contact the CDTFA at 1-800-400-7115 to verify that there is an underground storage tank account for your location and if you are required to pay the fee. See publication 88, Underground Storage Tank Fee, or visit our website for further information regarding the UST program.

Cigarette and Tobacco Products Licensing Act

You must register with us for a Cigarette and Tobacco Products Retailer's License if you intend to purchase and sell cigarettes or tobacco products (for retail licensing purposes only, tobacco products include nicotine products that are intended for human consumption, electronic smoking or vaping devices, or any component, part, or accessory of a tobacco product) at retail. You must obtain this license in addition to your seller's permit. A retailer's license is valid for a 12-month period, is not assignable or transferable, and must be renewed annually. A license fee payment is required for each retail location at initial registration and every year at the time of renewal and may not be prorated. You may refer to our Tax Rates – Special Taxes and Fees page for cigarette and tobacco products retailer's license fee amounts. Prospective licensees should consult with their local health department before applying for a California Cigarette and Tobacco Products Retailer's License to determine if there is a local licensing requirement in their community and to learn how to comply with its requirements. In some cases, local licensing requirements may be more restrictive than state licensing requirements. You may not purchase or sell cigarettes and/or other tobacco products without a valid Cigarette and Tobacco Products Retailer's License.

Cigarettes must have the valid California cigarette tax stamp affixed to each package and tobacco products must be tax-paid.

For more information on the cigarette and tobacco products tax and licensing program, refer to publication 78, Sales of Cigarettes and Tobacco Products in California and the Cigarette and Tobacco Products tax guide.

Use Fuel Tax Program

Use Fuel tax is imposed on the use of certain fuels on the highway of the state, rather than the sale or distribution. Generally, all fuels that are used to propel a motor vehicle and are not defined as either motor vehicle fuel (primarily gasoline) or diesel fuel will be taxed under the Use Fuel Tax Law.

Generally, you are required to register for a Vendor Use Fuel Permit and collect the use fuel tax at the time of sale, if you sell and deliver a use fuel into the fuel tank of a motor vehicle. Use Fuel includes:

  • Liquefied petroleum gas (LPG), propane and butane
  • Liquid and compressed natural gas (LNG and CNG)
  • Kerosene
  • Alcohol fuels such as ethanol and methanol
  • Blended alcohol fuels with less than 15% gasoline, (i.e. E85)
  • Distillate
  • Stove Oil

A vendor is typically a retail service station operator, but also includes a user who sells fuel to other users. Persons who sell fuel through a key or card lock facility or self-service pump are also considered vendors.

Not all fuel retailers qualify as vendors. Persons who deliver fuel exclusively into vehicles registered for the flat rate annual tax are not vendors. Likewise, persons selling fuel only for non-vehicular use, such as retailers who exclusively sell fuel for home heating, cooking, or lighting are not vendors.

Diesel Fuel Tax Program

If you make sales to an ultimate purchaser, farmers who use diesel fuel for tax-exempt farming purposes and exempt bus operators who use diesel fuel in tax-exempt bus operations, you may register with us for an Ultimate Vendor license. As an ultimate vendor, you may file a claim for refund of the diesel fuel tax you paid on your purchase of diesel fuel that you sold to an ultimate purchaser without collecting the diesel fuel tax reimbursement. All claims for refund for sales of diesel fuel to exempt end users must be supported by exemption certificates accepted in good faith. These certificates include CDTFA-231-DB, Certificate of Exempt Bus Operation and CDTFA-608, Certificate of Farming Use.

Registration

Online Registration — Register with us for your seller's permit and apply for any of the licenses, permits, or accounts listed above, or add a business location to an existing account.

Filing and Payments

Notice of Business Change — Keep your information current by using the links below and notifying us of any business changes.