Industry Topics for Underground Storage Tank Maintenance Fee
What is an Underground Storage Tank?
For purposes of this fee, an underground storage tank is defined as any tank, or a combination of tanks, used to store petroleum products and located substantially or totally beneath the surface of the ground. The definition also applies to pipes that are connected to such tanks.
Petroleum products that are subject to the fee include, but are not limited to:
- Gasoline and additives
- Aviation gasoline and additives
- Jet fuel and additives
- Diesel fuel and additives (includes dyed diesel fuel)
- Biodiesel and biodiesel blends
- Denatured ethanol or ethanol blended with gasoline
- Lubrication oils
- Heating and lighting oils
The fee does not apply to motor fuel or heating oil used for noncommercial purposes and placed in tanks having a capacity of 1,100 gallons or less and located on a farm or residence.
Petroleum is defined as crude oil, or any fractionation thereof, which is liquid at standard conditions of temperature and pressure.
General Fee Application
The underground storage tank maintenance fee is owed by the owner of an underground storage tank, containing petroleum, for which a permit is required pursuant to Section 25284 of the Health and Safety Code.
Generally, if you operate an underground storage tank but do not own it, you are not liable for the fee. An operator is defined as the person who controls, or is responsible for, the daily operation of the tank. Generally, if you lease an underground storage tank, you are considered an operator, not an owner. Therefore, you are not liable for the fee. However, you may have an agreement with the owner to report and pay the fee.
An owner or an operator can be an individual, a company, city, county, district, or any of their agencies or departments. The state and federal governments are not defined as owners or operators under the Underground Storage Tank Maintenance Fee Law.
Please note: If you are not the owner of a tank you operate and are not reporting and paying the fee on behalf of the owner, please give a copy of publication 88, Underground Storage Tank Fee to the owner.
How is the Fee Assessed?
The underground storage tank maintenance fee is assessed on each gallon of petroleum product placed into an underground storage tank.
The fee is due each time a petroleum product is placed into an underground storage tank, regardless of whether the fee was previously assessed. Below are examples of when the fee is due more than once:
- Petroleum products are removed from an underground storage tank and placed into another underground storage tank; or
- Petroleum products are withdrawn and placed back into the same tank in which they were previously stored.
Is the Fee Subject to Sales or Use Tax?
The underground storage tank maintenance fee is assessed on each gallon of petroleum products placed into an underground storage tank and is imposed upon the owner of the underground storage tank. Generally, a retail sale is not associated with the receipt of petroleum products into an underground storage tank. Sellers typically incorporate the underground storage tank fee reimbursement as a component of their Cost of Goods Sold. The sales and use tax amount is calculated on the total retail sale price.
Exemptions from the Fee
- The State of California, or any agency or department thereof.
Note: County and Local Governments are not exempt.
- The United States, its unincorporated agencies, or instrumentalities.
- Any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States.
- Banks or other financial institutions.
- Insurance companies.
- Any person of Native American descent who is entitled to receive services as an Native American from the United States Department of the Interior when the underground storage tank is located upon an Indian reservation, including rancherias, or any land held by the United States in trust for any Indian tribe or individual Indian.
- A tank located on a farm or at a residence with a capacity of 1,100 gallons or less, that stores home heating oil, for use on the premises where stored.
- A tank with a capacity of 1,100 gallons or less which is located on a farm and stores diesel fuel used primarily for agricultural purposes and not for resale.
You should keep all required records in support of your fee return for a minimum of four years after the return due date. For further information, see Underground Storage Tank Maintenance Fee Regulation 1271, Records.
The Underground Storage Tank Cleanup Fund application process, administered by the State Water Resources Control Board (SWRCB), requires claimants to provide documentation that all underground storage tank maintenance fees (for the tanks that are the subject of the claim) due on or after January 1, 1991, have been paid to the CDTFA. For fee verification purposes, you may want to maintain complete records for the SWRCB longer than the four years required by the CDTFA. For more information on the cleanup fund, visit the SWRCB website.
How do I Claim a Refund for the Underground Storage Tank Maintenance Fee?
If you have overpaid the fee directly to the CDTFA, you may file a claim for refund using our online services system, by completing form, CDTFA-101, Claim for Refund of Credit, or by filing an amended return(s). Claims for refund should state the specific reason(s) for the overpayment, specify the period for which the claim is being made, and the amount of the refund being claimed. The claim for refund must be in writing, signed by you, and state the reason(s) why an overpayment was made.
Publication 117, Filing a Claim for Refund, details the general requirements for filing a claim for refund and includes form CDTFA-101, Claim for Refund of Credit with instructions on how to complete the form. You may mail your claim to:
California Department of Tax and Fee Administration
Appeals and Data Analysis Branch (MIC: 33)
P.O. Box 942879
Sacramento, CA 94279-0033
Additional refund details can be found on our website.
How Long do I Have to File a Refund Claim for the Underground Storage Tank Maintenance Fee?
You must file a claim for refund by whichever of these dates that occurs last:
- Three years from the due date of the return on which you overpaid the fee
- Six months from the date you overpaid the fee
- Six months from the date a determination (billing) became final
- Three years from the date the CDTFA collected an involuntary payment, such as from a levy or lien
Be sure to file your claim for refund by the applicable deadline. If you do not file on time, the CDTFA cannot consider your claim, even if you overpaid the fee.