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Motor carrier fuel/Highway use/Mileage tax - California

RegSenseFleet OperationsEnglishState InfoCaliforniaBest ResultsFocus AreaHighway use - Mileage taxFleet TaxesTransportation

Carriers wishing to operate the following vehicles in California must have a fuel permit or license:

  • Diesel-powered vehicles used in interstate commerce.
  • Vehicles powered by liquified petroleum gas (LPG), liquified natural gas (LNG), compressed natural gas (CNG), or certain alcohol fuels.

You do not need a permit or license for the following exempt vehicles:

  • A privately operated passenger vehicle.
  • A commercial vehicle with an unladen weight of less than 7,000 pounds.
  • A privately operated two-axle truck that you have rented or leased for a period of 30 days or less.
A fuel permit or license is not needed to operate a diesel-powered vehicle driven solely in California.

Likewise, a fuel permit or license is not needed for a diesel-powered recreational vehicle, such as a motor home or a pickup truck with a camper, if the vehicle is not used in connection with a business operation.

Note: You must pay use fuel tax to your vendor when you purchase fuel for the exempt vehicles listed above. If you do not, you must have a fuel permit or license to operate a vehicle on a public road in California.

International Fuel Tax Agreement (IFTA)

IFTA applies to qualified vehicles operating in more than one IFTA jurisdiction. A qualified motor vehicle is a motor vehicle used, designed, or maintained for transportation of persons or property and that:

  • Has two axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds; or
  • Has three or more axles regardless of weight; or
  • Is used in combination, when the weight of such combination exceeds 26,000 pounds gross vehicle weight.

IFTA fees

IFTA license, $10

IFTA decals, $2 per vehicle

Temporary decal permit

A temporary decal permit is only available in California under certain circumstances such as adding a vehicle to an existing fleet. The temporary decal permit is only valid for 30 days.

Fuel use tax

Vehicles over 7,000 pounds operating intrastate only and powered by LPG, LNG, CNG and alcohol fuels must be registered for the fuel use license, and file tax reports. Intrastate diesel operations are not reportable.

Persons who operate non-IFTA vehicles using compressed natural gas, liquid natural gas, or liquefied petroleum gas may obtain an annual flat fee sticker and pay an annual flat rate fuel tax as follows:

Unladen WeightFee
4,000 pounds or less$36
More than 4,000 pounds but less than 8,001 pounds72
More than 8,001 pounds but less than 12,001 pounds120
12,001 pounds or more168

Gasoline-powered vehicles are not required to have a Use Fuel Tax Permit, nor are they required to file reports of gasoline used. Tax will be added to the price paid for gasoline at California service stations. Also, the tax does not apply to gasoline purchased outside the state and brought into the state in the trucks’ fuel tanks.

California Interstate User Diesel Fuel Tax (DI) License

The California Interstate User Diesel Fuel Tax (DI) License is issued to those operating qualified diesel-powered vehicles whose travel is restricted to California and Mexico only, or to those operating in California but the business is based outside of California in a non-IFTA jurisdiction. The license is free but the Board of Equalization may require a security deposit.

Licensees must keep accurate mileage and fuel records. DI returns are submitted on a quarterly basis, due the last day of the month following the end of the reporting period (the Board may choose an annual reporting period).

This license is not required; however, if it is not obtained, a California Fuel Trip Permit (CFTP) would be required. CFTP allows out-of-state registered trucks to enter and travel into California for four consecutive days without obtaining a license for fuel tax purposes. This permit allows California registered trucks to reenter California after traveling out of state, if they are unlicensed for fuel tax purposes. CFTP must be obtained and completed prior to entering the state.

Mileage/Highway use taxes

California does not assess or charge any highway use taxes within the state.

Tax refunds or credits

IFTA

California will allow full credit for tax paid purchases on the quarterly IFTA return. Any excess of tax paid over tax liability in any member jurisdiction will be credited in full to the licensee’s tax liability in other member jurisdictions, or to the licensee’s account ledger as appropriate.

Under IFTA, a licensee will receive full credit or refund for tax-paid fuel used outside the jurisdiction where the fuel was purchased. The base jurisdiction shall allow credits and issue refunds for all of its licensees on behalf of all member jurisdictions. Refund to licensees will be made only when all tax liability, including audit assessments, have been satisfied to all member jurisdictions.

Information regarding credits or refunds under IFTA is included in the IFTA Agreement Manual.

PTO/Reefer fuel

In California, credit is allowed on fuel used in off-highway, power take-off, or reefer equipment. Before obtaining a refund, a claimant must have a Diesel User (DU) account. Use form BOE-400-FTA to apply for a DU account. Refund requests must be filed for on a “Claim for Refund of Diesel Fuel Tax on Nontaxable Uses” (Form BOE-770-DU). Idle time is not refundable.

If the fuel used for reefer/PTO is in a separate tank other than the tank used to fuel and propel the motor vehicle, the fuel is tax free. However, if the fuel all comes from the same tank, an exemption certificate must be obtained in order to get the fuel tax free.

Tax refunds may be requested on a quarterly basis or for any period up to a calendar year. If being requested quarterly, the refund amount being requested must be for $750 or more, whereas annual refund requests will be accepted for any amount. Statute of limitations on applying for refunds is three years.

While there is no permit required to apply for refunds, the carrier must submit a fuel listing with the refund application form. (Original receipts must be kept for a minimum of three years.)

Exemptions

Exempt miles include: miles traveled off the highway; miles traveled on a highway that is under the jurisdiction of the U.S. Dept. of Agriculture, provided that the user pays or contributes, under an agreement with the Dept. of Agriculture; miles traveled under a Fuel Trip Permit. Exempt miles (other than Fuel Trip Permit miles) cannot be claimed on the IFTA return. A claim for refund would have to be filed separately.

['Fleet Taxes']
['Highway use - Mileage tax']
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