Diesel Fuel & Motor Vehicle Fuel Supplier
Supplier (Diesel Fuel & Motor Vehicle Fuel)
Suppliers include any of the following:
- Blender—any person who produces or converts blended fuel outside the bulk transfer/terminal system.
- Enterer—any person who is the importer of record of fuel.
- Position holder—any person who holds the inventory of fuel, as reflected on the records of the terminal operator. “Position holder” includes a terminal operator that owns motor vehicle fuel in its terminal.
- Refiner—any person who owns, operates, or otherwise controls a refinery.
- Terminal Operator—any person who owns, operates, or otherwise controls a terminal. Terminal includes a fuel production facility where fuel is produced and stored and from which fuel may be removed at a rack.
- Throughputter—any person who owns fuel within the bulk transfer/terminal system (other than in a terminal) or is a position holder.
Separate Returns Required
The diesel fuel tax and motor vehicle fuel tax are administered under two separate programs, but some returns cover both programs.
- If you are a supplier of both diesel fuel and motor vehicle fuel, you must file separate supplier tax returns.
- If you file informational reports as a pipeline, vessel, train, or terminal operator, you may report both diesel fuel and motor vehicle fuel on the same informational report(s).
- Terminal operators must file a separate report for each terminal location.
Imposition of Tax—Suppliers
Suppliers are required to pay the tax as described below.
A blender is required to pay the tax on the removal or sale of fuel blended outside the bulk transfer/terminal system. The number of gallons of blended fuel subject to the tax is the difference between the total number of gallons of blended fuel removed or sold and the number of gallons of tax-paid fuel used to produce the blended fuel.
Entry (import) occurs when fuel is brought into California. An enterer (importer) is required to pay the tax when they:
- Import fuel into California outside of the bulk transfer/terminal system,
- Remove or sell fuel within a pipeline or terminal to an unlicensed person, or
- Import by bulk transfer if they are not a licensed supplier.
When the import is by vessel and:
- Received at a marine terminal, import occurs at the landside of the flange. This includes a lighter unloading or discharging fuel at a marine terminal.
- Removed from a vessel in California to a lighter for the purpose of lightering, import occurs at the vessel side of the flange upon the removal of fuel from a vessel in California to the lighter.
- Removed from a vessel in California to another vessel in California, and the fuel is not unloaded or discharged at a marine terminal, then import occurs when the fuel is brought into California.
A position holder is required to pay the tax when the fuel is:
- Removed from the terminal rack.
- Removed or sold to an unlicensed person.
A position holder that delivers fuel to a receiving supplier under a two-party exchange contract is liable for the tax due on the removal of fuel from the terminal rack unless all of Regulation 1125 or Regulation 1423 requirements are met, as applicable.
A refiner is required to pay the tax when the fuel is:
- Removed at a terminal rack located at a refinery,
- Removed by bulk transfer (for example, transfer by pipeline or vessel) and the refiner or the owner of the fuel immediately before the removal is not a licensed supplier, or
- Removed or sold to an unlicensed person.
A refiner that delivers fuel to a receiving supplier under a two-party exchange contract is liable for the tax due on the removal of fuel from the terminal rack located at a refinery unless all of Regulation 1125 or Regulation 1423 requirements are met, as applicable.
A terminal operator is jointly and severally liable for and may be required to pay the tax when the fuel is removed at the rack when all the following apply:
- The position holder with respect to the fuel is a person other than the terminal operator and is not a licensed supplier.
- The terminal operator is not a licensed supplier and either:
- Does not have a current notification certificate from the position holder as required by the Internal Revenue Service, or
- Has reason to believe or knows that any information in the certificate is false.
Or with respect to diesel fuel:
- The terminal operator provides any person with a bill of lading, shipping paper, or similar document which falsely indicates that the undyed or unmarked diesel fuel which is removed from the terminal is dyed or marked following the United States Environmental Protection Agency or the Internal Revenue Service requirements.
A throughputter is required to pay the tax when the throughputter removes or sells fuel within the bulk transfer/terminal system to a person who is not a licensed supplier.
You must keep required records for at least four years from the time the tax is due unless we authorize, in writing, their destruction sooner. You must maintain complete records of:
- All rack removals
- Imports, and
- Other transactions of tax-paid diesel fuel, including:
- exemption certificates,
- self-consumed diesel fuel,
- tank gaugings or meter readings of diesel fuel, and
- any other fuel reported in the ultimate vendor's claim for refund.
Such records include but are not limited to:
- Refinery Reports related to the production of diesel fuel.
- Inventory reconciliation by location.
- Storage inventory reports.
- List of storage locations.
- Tax returns from other states to support export claims.
- Cardlock statements.
- Calculations or formulas to support off-highway exempt usage.
- First Taxpayers Reports.
- Support for claimed Supplier bad debts.