['Fleet Taxes']
['Bulk Fuel Requirements']
07/18/2024
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If a motor carrier has bulk fuel storage in Delaware, they are considered to be a “Special Fuel User” which means the owner or other person responsible for the operation of a motor vehicle at the time special fuel is placed in the fuel supply tank or tanks thereof while such vehicle is within the state.
Depending on how or from whom they purchase fuel for storage, determines how they are to be licensed.
- If a motor carrier purchases fuel for bulk storage tanks from a supplier that is registered with the state, it is purchased “tax-paid” and the supplier is responsible for paying the state and federal tax to Delaware. The motor carrier in turn will receive a monthly billing from the supplier showing the exact amount of fuel purchased, the state tax paid, and the federal tax paid.
Then, when the carrier files their regular quarterly IFTA Tax Report, the fuel is shown as tax paid fuel purchased in Delaware. By purchasing the fuel tax-paid through a registered supplier, the carrier is not required to have a special fuel license to maintain bulk storage, and is not required to file a separate tax return.
- If, however, a motor carrier purchases bulk fuel from a supplier that is not registered with the state, they would be purchasing it “tax-free”, which would leave the motor carrier responsible for the payment of state and federal tax.
To do this, the carrier must be licensed as a “Special Fuel User” with the Department of Public Safety, Division of Motor Fuel Tax. Applications for a Special Fuel Use License must be filed with a $10 fee, plus a surety bond in an amount equal to three months tax liability. Minimum bond amount is $5,000 and the maximum amount is $200,000. The license when issued shall expire on the 30th day of June, and must be renewed each year.
A licensed user will automatically receive a tax-exemption sticker with his license which must be affixed to his bulk storage tank or pump to indicate to a special fuel Supplier that fuel may be placed in said tank tax-free. Each bulk supply tank is considered to be a separate location for purposes of licensing and reporting.
Every licensed special fuel user shall keep fuel invoices, inventory records, and licensed vehicle odometer readings and shall maintain a record book or log on or near the fuel pump in which to record special fuel placed into his motor vehicles for reporting purposes. Licensed users paying the applicable tax based upon receipt of special fuel into storage must only keep fuel invoices. If special fuel is occasionally purchased at retail stations for vehicles, purchase receipts must be maintained for audit purposes.
A monthly tax return is required for each licensed location (tank) of special fuel and a user must file the return on Form SF-4 with the Motor Fuel Tax Division, reporting the amount of fuel purchased and put into bulk storage tanks during the month, plus remit a check for state and federal tax due. The return must be filed by the 25th day of the next succeeding calendar month following the reporting month. When the 25th day of the month falls on a weekend or state holiday, the due date of the report shall be the next following business day of the state.
Motor carriers filing monthly “Special Fuel Use Tax Reports” and remitting the tax, can take credit on their quarterly for all fuel reported on the monthly returns.
Any special fuel user, whether licensed or unlicensed, who maintains bulk storage of special fuel in Delaware, and who also owns (or controls) a licensed diesel motor vehicle or vehicles, is presumed to be fueling such vehicles from his own bulk storage facilities. If exception to this regulation is claimed by the user, he must be prepared to produce retail fuel purchase tickets to verify same. Recording of the vehicle odometer readings would also be advised to substantiate fuel used.
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