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Diesel Fuel Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 31. Diesel Fuel Tax Law

Chapter 1. General Provisions and Definitions.


CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS.

(Part 31, Division 2, Revenue and Taxation Code)

60001. Title. This part is known and may be cited as the "Diesel Fuel Tax Law."

60003. "Terminal." "Terminal" means a diesel fuel storage and distribution facility that is supplied by pipeline or vessel, and from which diesel fuel may be removed at a rack. "Terminal" includes a fuel production facility where diesel fuel is produced and stored and from which diesel fuel may be removed at a rack.

History— Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010, added second sentence.

60003.1. "Fuel production facility." "Fuel production facility" means a facility, other than a refinery, in which diesel fuel is produced.

History—Added by Stats. 2009, Ch. 545 (AB 1547), in effect January 1, 2010.

60004. "Refinery." "Refinery" means a facility used to produce diesel fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which diesel fuel may be removed by pipeline, by vessel, or at a rack.

60005. "Approved." "Approved terminal or refinery" means a terminal or refinery that is operated, respectively, by a diesel fuel registrant that is a terminal operator, or by a diesel fuel registrant that is a refiner.

60006. "Rack." "Rack" means a mechanism for delivering diesel fuel from a refinery or terminal into a truck, trailer, railroad car, or other means of nonbulk transfer.

60007. "Removal." "Removal" means any physical transfer of diesel fuel, and any use of diesel fuel other than as a material in the production of diesel fuel. However, diesel fuel is not removed when it evaporates or is otherwise lost or destroyed.

60008. "Person." "Person" includes any individual, firm, partnership, joint venture, limited liability company, association, corporation, estate, trust, business trust, receiver, syndicate, this state, any county, city and county, municipality, district, or other political subdivision thereof, or any other group or combination acting as a unit.

History—Stats. 1995, Ch. 2, in effect April 29, 1995, and Ch. 34, in effect June 30, 1995, but operative July 1, 1995, added "limited liability company," after "joint venture,". Stats. 1995, Ch. 497, in effect January 1, 1996, substituted "partnership" for "copartnership" after "any individual, firm," and deleted "the United States." after "trust, receiver, syndicate,".

60009. "Terminal operator." "Terminal operator" includes any person that owns, operates, or otherwise controls a terminal.

60010. "Position holder." "Position holder" includes any person that holds the inventory position in the diesel fuel, as reflected on the records of the terminal operator. A person holds the inventory position in diesel fuel when that person has a contractual agreement with the terminal operator for the use of storage facilities and terminaling services at a terminal with respect to the diesel fuel. "Position holder" includes a terminal operator that owns diesel fuel in its terminal.

60011. "Refiner." "Refiner" includes any person that owns, operates, or otherwise controls a refinery.

Text of Section Operative Through December 31, 2001

60012. "Blender." "Blender" includes any person that produces blended diesel fuel outside the bulk transfer/terminal system.

Text of Section Operative January 1, 2002

60012. "Blender." "Blender" includes any person that produces or converts blended diesel fuel outside the bulk transfer/terminal system.

History—Stats. 2000, Ch. 1053 (AB 2114), operative January 1, 2002, added "or converts" after "person that produces".

60013. "Enterer." "Enterer" includes any person who is the importer of record (under federal customs law) with respect to diesel fuel. If the importer of record is acting as an agent, the person for whom the agent is acting is the enterer. If there is no importer of record of diesel fuel entered into this state, the owner of the diesel fuel at the time it is brought into this state is the enterer.

60014. "Board" or "Department." "Board" or "department" means the California Department of Tax and Fee Administration.

History— Added by Stats. 2024, Ch. 499 (SB 1528), in effect January 1, 2025.

60015. "Diesel fuel registrant." "Diesel fuel registrant" includes any enterer, position holder, refiner, throughputter, or terminal operator, that is licensed as a supplier pursuant to Section 60131.

History—Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, added "throughputter," after "position holder, refiner."

60016. "Highway." "Highway" includes any way or place, of whatever nature, that is publicly maintained and open to the use of the public for purposes of vehicular travel.

60017. "In this state." "In this state" or "in the state" means within the exterior limits of the State of California and includes all territory within these limits owned by or ceded to the United States.

60018. "Fuel tank." "Fuel tank" means any receptacle on a motor vehicle from which fuel is supplied for the operation of the motor vehicle.

60019. "Motor vehicle." "Motor vehicle" includes every self-propelled vehicle operated or suitable for operation on the highway, except a vehicle used exclusively upon stationary rails or tracks.

60021. "Entry." "Entry" means the importing of diesel fuel into this state. However, diesel fuel brought into this state in the fuel tank of a motor vehicle shall not be deemed to be an "entry" if not removed from the fuel tank except as used for the operation of that motor vehicle, except to the extent that diesel fuel was acquired tax free for export or a refund of tax was claimed as a result of exportation from the state from which that diesel fuel was transported into this state.

Text of Section Operative Through December 31, 2006

60022. "Diesel fuel." (a) "Diesel fuel" means any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. A liquid meets this requirement if, without further processing or blending, the liquid has practical and commercial fitness for use in the engine of a diesel-powered highway vehicle.

However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the engine of a diesel-powered highway vehicle.

(b) "Diesel fuel" does not include gasoline, kerosene, liquefied petroleum gas, natural gas in liquid or gaseous form, or alcohol.

(c) "Diesel fuel" does not include the water in a diesel fuel and water emulsion of two immiscible liquids of diesel fuel and water, which emulsion contains an additive that causes the water droplets to remain suspended within the diesel fuel, provided the diesel fuel emulsion meets standards set by the California Air Resources Board.

(d) This section shall remain in effect until January 1, 2007, and as of that date is repealed.

History—Stats. 2001, Ch. 8 of the 2nd Extraordinary Session (AB 86xx), in effect October 3, 2001, added subdivision letter designation (a) before first paragraph, added subdivision letter designation (b) before ""Diesel fuel" does not include", added "gasoline," after "does not include" and added ", liquefied petroleum gas, natural … or alcohol" after "kerosene" in subdivision (b), and added subdivisions (c) and (d).

Text of Section Operative January 1, 2007

60022. "Diesel fuel." (a) "Diesel fuel" means any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. A liquid meets this requirement if, without further processing or blending, the liquid has practical and commercial fitness for use in the engine of a diesel-powered highway vehicle.

However, a liquid does not possess this practical and commercial fitness solely by reason of its possible or rare use as a fuel in the engine of a diesel-powered highway vehicle.

"Diesel fuel" does not include kerosene, gasoline, liquified petroleum gas, natural gas in liquid or gaseous form, or alcohol.

(b) This section shall become operative on January 1, 2007.

History—Added by Stats. 2001, Ch. 8 of the 2nd Extraordinary Session (AB 86xx), in effect October 3, 2001. Stats. 2003, Ch. 605 (SB 1060), effective January 1, 2004, substituted " 'Diesel fuel' does not include kerosene, gasoline, liquified petroleum gas, natural gas in liquid or gaseous form, or alcohol." for the former third paragraph pertaining to what is included within the definition of "diesel fuel."

Text of Section Operative Through December 31, 2001

60023. "Blended diesel fuel." "Blended diesel fuel" means any mixture of diesel fuel with respect to which tax has been imposed and any other liquid (such as kerosene) on which tax has not been imposed (other than diesel fuel dyed in accordance with United States Environmental Protection Agency or Internal Revenue Service rules).

Text of Section Operative October 3, 2001 Through December 31, 2006

60023. "Blended diesel fuel." (a) "Blended diesel fuel" means any mixture of diesel fuel with respect to which tax has been imposed and any other liquid (such as kerosene) on which tax has not been imposed (other than diesel fuel dyed in accordance with United States Environmental Protection Agency or Internal Revenue Service rules). Blended diesel fuel also means any conversion of a liquid into diesel fuel. "Conversion of a liquid into diesel fuel" occurs when any liquid that is not included in the definition of diesel fuel and that is outside the bulk transfer/terminal system is sold as diesel fuel, delivered as diesel fuel, or represented to be diesel fuel."

(b) "Blended diesel fuel" does not include a diesel fuel and water emulsion of two immiscible liquids of diesel fuel and water, which emulsion contains an additive package that causes the water droplets to remain suspended within the diesel fuel, provided that the diesel fuel emulsion meets the standards set by the California Air Resources Board.

(c) This section shall remain in effect until January 1, 2007, and as of that date is repealed.

History—Stats. 2000, Ch. 1053 (AB 2114), operative January 1, 2002, added the second and the third sentences. Stats. 2001, Ch. 8 of the 2nd Extraordinary Session (AB 86xx), in effect October 3, 2001, added subdivision letter designation (a) before former sole paragraph, and added subdivisions (b) and (c).

Text of Section Operative January 1, 2007

60023. "Blended diesel fuel." (a) "Blended diesel fuel" means any mixture of diesel fuel with respect to which tax has been imposed and any other liquid (such as kerosene) on which tax has not been imposed (other than diesel fuel dyed in accordance with United States Environmental Protection Agency or Internal Revenue Service rules). Blended diesel fuel also means any conversion of a liquid into diesel fuel. "Conversion of a liquid into diesel fuel" occurs when any liquid that is not included in the definition of diesel fuel and that is outside the bulk transfer/terminal system is sold as diesel fuel, delivered as diesel fuel, or represented to be diesel fuel.

(b) This section shall become operative on January 1, 2007.

History—Added by Stats. 2001, Ch. 8 of the 2nd Extraordinary Session (AB 86xx), in effect October 3, 2001.

60024. "Colorless marker." "Colorless marker" means material that does not reveal its presence until the diesel fuel into which it is introduced is subjected to a special test.

60025. "Delivery." [Repealed by Stats. 1995, Ch. 555, in effect January 1, 1996.]

60025. "Gallon." "Gallon" means the United States gallon of 231 cubic inches or the volumetric gallon adjusted to 60 degrees Fahrenheit when the invoice and settlement are made on the temperature corrected gallonage.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.

60026. "Diesel-powered highway vehicle." "Diesel-powered highway vehicle" means a motor vehicle that is operated by a diesel-powered engine on a highway.

60027. "Qualified highway vehicle operator." "Qualified highway vehicle operator" means any person licensed as a qualified highway vehicle operator that owns, operates, or otherwise controls a diesel-powered highway vehicle and delivers, or causes to be delivered, diesel fuel or any liquid into the fuel tank of a diesel-powered highway vehicle and is qualified to use dyed diesel fuel on the highway by the Internal Revenue Service under Section 48.4082-4 of Title 26 of the Code of Federal Regulations.

History—Stats. 1995, Ch. 555, in effect January 1, 1996, deleted ", except an interstate trucker," after "includes any person". Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, substituted "Qualified highway" for "Highway" before " … vehicle operator" means", substituted "means" for "includes" after "Qualifed highway vehicle operator", substituted "delivers" for "places" after "diesel-powered highway vehicle and", substituted "delivered" for "placed" after "causes to be", and added "and is qualified to use … of Title 26 of the Code of Federal Regulations" after "tank of a diesel-powered highway vehicle".

60029. "Bulk transfer." "Bulk transfer" means any transfer of diesel fuel by pipeline or vessel.

60030. "Bulk transfer/terminal system." "Bulk transfer/terminal system" means the diesel fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Diesel fuel in a refinery, pipeline, vessel, or terminal is in the bulk transfer/terminal system. Diesel fuel in the fuel tank of any engine, or in any railcar, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system.

60031. "Dyed diesel fuel." "Dyed diesel fuel" means diesel fuel that is dyed under United States Environmental Protection Agency or the Internal Revenue Service rules for high sulphur diesel fuel or low sulphur diesel fuel or any other requirements subsequently set by the United States Environmental Protection Agency or the Internal Revenue Service and considered destined for nontaxable, off-highway uses.

60032. "Undyed diesel fuel." "Undyed diesel fuel" means diesel fuel that is not subject to the United States Environmental Protection Agency or Internal Revenue Service diesel fuel dyeing requirements.

60033. "Supplier." "Supplier" includes any person who is any of the following:

(a) Blender, as defined in Section 60012.

(b) Enterer, as defined in Section 60013.

(c) Position holder, as defined in Section 60010.

(d) Refiner, as defined in Section 60011.

(e) Terminal operator, as defined in Section 60009.

(f) Throughputter, as defined in Section 60035.

60034. "Highway vehicle operator/fueler." "Highway vehicle operator/fueler" includes:

(a) Any person, other than a qualified highway vehicle operator, that owns, operates, or otherwise controls a diesel-powered highway vehicle and delivers, or causes to be delivered, diesel fuel or any liquid into the fuel tank of a diesel-powered highway vehicle; or

(b) Any person who sells diesel fuel on which a claim for refund has been allowed, or who sells and delivers or causes to be delivered in the fuel tank of a diesel-powered highway vehicle or any liquid on which tax has not been imposed.

History—Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002, substituted "Highway vehicle operator/fueler" includes: in the first paragraph; added subdivision (a); and added subdivision letter designation (b) before "Any person who sells", substituted "any" for "Any" before "person who sells diesel fuel", deleted "to a highway vehicle operator, dyed diesel fuel," after "Any person who sells", added "who sells and delivers … highway vehicle", and deleted "and the diesel fuel or liquid is used in the operation of the diesel powered highway vehicle" in subdivision (b).

60035. "Throughputter." "Throughputter" means any person that owns diesel fuel within the bulk transfer/terminal system (other than in a terminal) or is a position holder.

60036. "Ultimate vendor." "Ultimate vendor" means a person that sells undyed diesel fuel to the user of the diesel fuel (the ultimate purchaser) for use on a farm for farming purposes or for use in an exempt bus operation.

60037. "Ultimate purchaser." "Ultimate purchaser" means a person that uses diesel fuel for use on a farm for farming purposes or an exempt bus operator that uses diesel fuel in an exempt bus operation.

60038. "Registered ultimate vendor." "Registered ultimate vendor" means a person that is licensed as an ultimate vendor pursuant to Section 60151.

60039. "Exempt bus operation." (a) "Exempt bus operation" consists of the following:

(1) Any transit district, transit authority, or city owning and operating a local transit system itself or through a wholly owned nonprofit corporation.

(2) Any private entity providing transportation services for the transportation of people under contract or agreement, except general franchise agreements, with a public agency authorized to provide public transportation services, only for diesel fuel consumed while providing services under those contracts or agreements entered into subsequent to January 1, 1979.

(3) Any passenger stage corporation subject to the jurisdiction of the Public Utilities Commission when the motor vehicles of the passenger stage corporation are exclusively operated in urban or suburban areas or between cities in close proximity for the transportation of persons for hire, compensation, or profit. However, the exemption is not extended to any line or lines operated by the passenger stage corporation that exceed 50 miles of one-way route mileage.

(4) Any common carrier of passengers operating exclusively on any line or lines within the limits of a single city between fixed termini or over a regular route, 98 percent of whose operations, as measured by total route mileage operated, are exclusively within the limits of a single city, and who by reason thereof is not a passenger stage corporation subject to the jurisdiction of the Public Utilities Commission.

(5) Any school district, community college district, or county superintendent of schools owning, leasing, or operating buses for the purpose of transporting pupils to and from school and for other school or college activities involving pupils, including, but not limited to, field trips and athletic contests.

(6) Any private entity providing transportation services for the purposes specified in paragraph (5) under contract or agreement with a school district, community college district, or county superintendent of schools, only for diesel fuel consumed while providing services under those contracts or agreements entered into subsequent to September 30, 1984.

(b) "Exempt bus operation" as defined in subdivision (a), shall not be applicable to a charter-party carrier of passengers. The term "charter-party carrier of passengers" has the same meaning as that specified in Section 5360 of the Public Utilities Code and shall further include those transportation services described in subdivisions (a) and (e) of Section 5353 of the Public Utilities Code, if that transportation service is rendered as contract carriage and not as common carriage of passengers.

60040. "Exempt bus operator." "Exempt bus operator" includes any person that owns, operates, or controls an exempt bus operation.

60041. "Train operator." "Train operator" includes any person that owns, operates, or controls a diesel-powered train and is licensed as a railroad by a state or federal agency.

History—Stats. 1997, Ch. 76 (SB 612), in effect July 16, 1997, substituted "a state or federal agency" for "the Interstate Commerce Commission" after "a railroad by".

60042. "Diesel-powered train." "Diesel-powered train" means any diesel-powered equipment or machinery that rides on rails, including equipment or machinery that transports passengers, freight, or a combination of both passengers and freight, and equipment or machinery that only carries freight or passengers of the operator thereof. Thus, the term includes a locomotive, work train, switching engine, and track maintenance machine.

60043. "Government entity." (a) "Government entity" means this state and its political subdivisions except for a political subdivision that is only an exempt bus operator.

(b) Sections 60146 and 60205.5 do not apply to a government entity if both of the following apply:

(1) The diesel fuel is purchased tax-paid from a supplier or retail vendor.

(2) The tax-paid diesel fuel is used solely for the operation of a diesel-powered highway vehicle within this state.

History—Added by Stats. 1995, Ch. 34, in effect June 30, 1995, but operative July 1, 1995. Stats. 2005, Ch. 519 (AB 1765), in effect October 4, 2005, but operative January 1, 2006, lettered former sole paragraph as subdivision (a) and added subdivision (b).

60044. "Retail vendor." "Retail vendor" means any person who sells to a highway vehicle operator diesel fuel delivered in this state into a storage tank or into a fuel tank of a diesel-powered highway vehicle and at the time of sale collects diesel fuel tax from the highway vehicle operator.

History—Added by Stats. 1995, Ch. 34, in effect June 30, 1995, but operative July 1, 1995.

60045. "Intercity bus." [Repealed by Stats. 2006, Ch. 364, (AB 3076), in effect January 1, 2007.]

60046. "Intercity bus operator." [Repealed by Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007.]

60047. "Pipeline." "Pipeline" means a fuel distribution system that moves diesel fuel, in the bulk, through a pipe, from a refinery to a terminal, from a terminal to another terminal, from a vessel to a terminal, or from a refinery or terminal to a vessel.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.

60047.1. "Pipeline operator." "Pipeline operator" includes any person that owns, operates, or otherwise controls a pipeline.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.

60048. "Sale." "Sale" means:

(a) The transfer of title to diesel fuel (other than diesel fuel in a terminal) to a buyer for consideration, which may consist of money, services, or other property.

(b) The transfer of the inventory position in the diesel fuel in a terminal if the buyer becomes the positionholder with respect to the diesel fuel.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.

60048.1. "Tax-paid fuel." "Tax-paid fuel" or "tax paid" means the gallons of diesel fuel acquired on either a temperature corrected or volumetric basis on which the tax in Section 60050 has been imposed at the time of or prior to the acquisition by the supplier or person.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.

60049. "Vessel." "Vessel" means a waterborne vessel used for transporting diesel fuel.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.

60049.1. "Vessel operator." "Vessel operator" means any person that operates or otherwise controls a vessel.

History—Added by Stats. 2001, Ch. 429 (AB 309), in effect January 1, 2002.