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Motor fuel which is placed into the fuel tank of a qualified motor vehicle from bulk storage, and for which tax has been paid to the jurisdiction where the tank is located, is considered a tax-paid bulk fuel purchase and credit may be taken for it on the carrier’s IFTA return. Credit is taken in the quarter in which the fuel is placed into the supply tank of the IFTA qualified vehicle.
Under the International Fuel Tax Agreement (IFTA) there are provisions for carriers with bulk fuel tanks. The licensee normally has fuel delivered into fuel storage facilities and fuel tax may or may not be paid at the time of delivery. Licensees using bulk fuel tanks should confirm whether tax is paid, or not paid, at the time of delivery.
The licensee’s records must:
Licensees have specific recordkeeping requirements regarding bulk fuel. In addition to the withdrawal logs, licensees must maintain quarterly reconciliation records of the bulk fuel tanks. For example:
Beginning Inventory Purchases - Withdrawals (should match log) = End Inventory
The licensee must retain the following records for its bulk storage facilities:
The base jurisdiction will not allow a licensee tax-paid credit for fuel withdrawn by the licensee from its bulk fuel storage facilities unless the licensee produces records that show:
The licensee must produce audit records that contain the following elements for each withdrawal from its bulk storage facilities:
In the event of an audit, some auditors also expect the licensee to periodically record physical tank readings (stick readings) of tank levels.