Diesel Fuel Exempt Seller Claim for Refund

General Information

A diesel fuel exempt seller includes any person who is not a licensed ultimate vendor who exports or sells undyed diesel fuel for exempt purposes without collecting the diesel fuel tax reimbursement. You are also an exempt seller if you export or sell tax-paid diesel fuel to exempt customers (U.S. government, train operators, and others) and are not a licensed ultimate vendor or supplier of diesel fuel.

Note: An ultimate vendor purchases tax paid diesel fuel and makes exempt sales of undyed diesel fuel to ultimate purchasers, for use on a farm for farming purposes or for use in an exempt bus operation. Ultimate vendors making exempt sales to ultimate purchasers must be licensed as an ultimate vendor and file CDTFA-770-DV, Diesel Fuel Ultimate Vendor Report/Claim for Refund, to claim a refund of the tax paid purchases sold to an ultimate purchaser.

Registered diesel fuel exempt sellers may file claims for refund of the tax paid on undyed diesel fuel:

  • For use outside California,
  • Sold to the U.S. Government,
  • Sold to train operators for use in a diesel-powered train or for other off-highway use, or
  • Used in operations for purposes other than propelling vehicles on the highway in California.

You may file a claim for any of the exempt sales and uses stated above. The law allows for claims to be filed once a year.  However, if your claim exceeds $750 for any calendar quarter, you may request to file your claims on a quarterly basis.

Note: Every July 1, the diesel fuel tax rate is adjusted based on changes in the California Consumer Price Index. The California Department of Tax and Fee Administration (CDTFA) generally announces the adjusted rate by the preceding May 1. Due to this annual rate adjustment, you may have transactions at different tax rates. The diesel fuel tax rate is located on the Special Taxes and Fees Tax Rates webpage, under Diesel Fuel Tax.

Filing Requirements

Registered diesel fuel exempt sellers may file a Claim for Refund on Nontaxable Sales and Exports of Diesel Fuel by logging into your online services account. You must report each claim for refund on your tax-paid sales of diesel fuel which was sold for exempt purposes and which you did not collect the tax reimbursement. Claims for exempt sales must be supported by schedules detailing all purchases of diesel fuel and all exempt sales.

If you are claiming a refund using a prior tax rate, you must have reported the claimed gallons as purchased at the prior tax rate and held in ending inventory through the period in which you are making the claim.

You must file your claim for refund:

  • Within three years from the date the fuel was purchased, or
  • If the tax was not invoiced at the time of the purchase of the diesel fuel, within six months after the receipt of an invoice for the tax, whichever period expires later.

For further guidance regarding tax-paid undyed diesel fuel exported, please see Regulation 1430, Shipments Out of State.

For sales to the United States and its agencies and instrumentalities, please see Regulation 1434, Sales of Diesel Fuel to the United States and its Agencies and Instrumentalities.

Schedule Preparation

There are two types of supporting schedules required for Diesel Fuel Exempt Seller tax refund claim: Receipt Schedule and Disbursement Schedule. You must use the appropriate schedule code(s) for each receipt and disbursement activity claimed, listed under the Refund Claim Schedules section of the CDTFA-810-FTE, Instructions for Preparing Motor Fuels Schedules. Enter the schedule code for the activities on the Schedule tab of the FLT filing template (CDTFA-770-DZ-E). In addition to using a schedule code to describe the activity claimed, it must also indicate the type of product by entering the appropriate product code on the Schedule tab.

For detailed information regarding preparation of the schedules, please refer to CDTFA-810-FTE, Instructions for Preparing Motor Fuels Schedules, Refund Claim Schedules section.

You can find a list of codes used in schedule preparation can be located on our website, under the Guidelines section of the Motor Fuels Online Filing webpage.

File Attachment

To submit the CDTFA-770-DZ-E, Diesel Fuel Exempt Seller Claim for Refund, click the Add button to upload the file attachment.

On the Select a file to attach pop-up window:

  1. The file Type is defaulted to: Motor Fuels Flat File (FLT)
  2. Enter a description of the file in the Description field (for example: Account 123-456789, Period Jan. 2024).
  3. Click the Choose File button and follow the prompts to select and upload the file.
  4. Once you have completed all required information, click the Save button.

Click the Next button to proceed to the next screen.

For instructions on file preparation, including file type and formatting requirements, template Excel workbooks for creating Flat (FLT) files, sample files, and other useful information related to motor fuels online filing, please visit our website.

Review Totals

Do you agree with the refund calculated from the schedules?

The reported refund claimed amount from the file attachment may be different than the calculated refund claimed amount from the schedules.

If you agree to use the calculated refund amount from the schedules, select Yes and click Next.

If the calculated refund amount from the schedules is incorrect, do not proceed. You must first correct and resubmit the file attachment. Select the Previous button and follow the instructions to resubmit a corrected file attachment.

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