Laws, Regulations and Annotations
Business Taxes Law Guide – Revision 2022
Motor Vehicle Fuel Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 2. Motor Vehicle Fuel Tax Law
Chapter 3. Exemptions.1
7401. Exemptions. (a) The provisions of this part requiring the payment of motor vehicle fuel taxes do not apply to any of the following:
(1) Any entry or removal from a terminal or refinery of motor vehicle fuel transferred in bulk to a refinery or terminal if the persons involved (including the terminal operator) are licensed suppliers.
(2) The removal of motor vehicle fuel, if all of the following apply:
(A) The motor vehicle fuel is removed by railroad car from an approved refinery and is received at an approved terminal.
(B) The refinery and the terminal are operated by the same licensed supplier.
(C) The refinery is not served by pipeline (other than a pipeline for the receipt of crude oil) or vessel.
(3) Motor vehicle fuel which, pursuant to the contract of sale, is required to be shipped and is shipped to a point outside of this state by a supplier by means of any of the following:
(A) Facilities operated by the supplier.
(B) Delivery by the supplier to a carrier, customs broker, or forwarding agency, whether hired by the purchaser or not, for shipment to the out-of-state point.
(C) Delivery by the supplier to any vessel clearing from a port of this state for a port outside of this state and actually exported from this state in the vessel.
(4) Motor vehicle fuel sold by credit card certified by the United States Department of State to any consulate officer or consulate employee of a foreign government who is not engaged in any private occupation for gain within this state, who uses the motor vehicle fuel in a motor vehicle that is registered with the United States Department of State, and whose government has done either of the following:
(A) Entered into a treaty with the United States providing for the exemption of its representatives from national, state, and municipal taxes.
(B) Granted a similar exemption to representatives of the United States.
(5) Motor vehicle fuel sold to the United States armed forces for use in ships or aircraft, or for use outside this state.
(6) Gasoline blendstocks removed from a pipeline or vessel, when the gasoline blendstocks are received by a licensed industrial user.
(7) Any entry or removal from a terminal or refinery of gasoline blendstocks that are received at an approved terminal or refinery if the person otherwise liable for the tax is a licensed supplier.
(8) Any entry or removal from a terminal or refinery of gasoline blendstocks not in connection with a sale if the person otherwise liable for the tax is a licensed supplier and the person does not use the gasoline blendstocks to produce finished gasoline.
(9) Any entry or removal from a terminal or refinery of gasoline blendstocks in connection with a sale if the person otherwise liable for the tax is a licensed supplier and at the time of sale, such person has an unexpired exemption certificate described in Section 7402 from the buyer and has no reason to believe any information in the certificate is false.
(10) If paragraph (8) or (9) applied to the removal or entry of gasoline blendstocks, any resale made of gasoline blendstocks, when the person has an unexpired exemption certificate described in Section 7402 from the buyer and has no reason to believe any information in the certificate is false.
(11) Motor vehicle fuel sold by a supplier to a train operator for use in a motor vehicle fuel-powered train or for other off-highway use and the supplier has on hand an exemption certificate described in Section 7403 from the train operator.
(b) For purposes of this section:
(1) "Carrier" means a person or firm engaged in the business of transporting for compensation property owned by other persons, and includes both common and contract carriers.
(2) "Forwarding agent" means a person or firm engaged in the business of preparing property for shipment or arranging for its shipment.
1Added by Stats. 2000, Ch. 1053 (AB 2114), operative January 1, 2002