Motor Fuel Taxes

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Who is required to be licensed?
  1. A supplier who may also act as a terminal operator, permissive supplier, distributor, importer, exporter, blender, motor fuel transporter, or aviation fuel dealer without securing a separate license but who is subject to all other conditions, requirements, and liabilities imposed on those license holders.
  2. A permissive supplier who may also act as a distributor, importer, exporter, blender, motor fuel transporter, or aviation fuel dealer without securing a separate license but who is subject to all other conditions, requirements, and liabilities imposed on those license holders.
  3. A distributor who may also act as an importer, exporter, blender, or motor fuel transporter without securing a separate license but who is subject to all other conditions, requirements, and liabilities imposed on those license holders.
  4. An importer who may also act as an exporter, blender, or motor fuel transporter without securing a separate license but who is subject to all other conditions, requirements, and liabilities imposed on those license holders.
  5. A terminal operator.
  6. An exporter.
  7. A motor fuel transporter.
  8. A blender.
  9. An interstate motor fuel user.
  10. An aviation fuel dealer.
Why do I need to appoint a Louisiana Registered Agent?

A Registered Agent is necessary to receive service of process on law suits. Many businesses have a Louisiana Registered Agent because the business is a Louisiana company or the business has registered with the Louisiana Secretary of State's Office. If a business does not have a Louisiana Registered Agent, the Secretary of State is designated as the agent for service of process on suits involving all foreign corporations not registered with the Secretary of State. The Secretary of State is designated as the agent for service of process on suits involving domestic corporations after a diligent effort but unsuccessful attempt has been made to serve the corporation.

What are the grounds for denial of a license?
  1. The secretary may refuse to issue a license if the applicant or any principal of the applicant:
    1. Had a license or registration issued under prior law or current law canceled by the secretary for reason as set forth in R.S. 47:818.42.
    2. Had a license or registration issued by another state revoked, denied, or canceled for cause.
    3. Had a federal certificate of registry issued under 26 USC 4101 or a similar federal authorization revoked.
    4. Has been convicted of any offense involving fraud or misrepresentation.
    5. Has been convicted of any other offense that indicates that the applicant may not comply if issued a license.
    6. Is in arrears to the state for any taxes.
    7. Is determined not to be the real party in interest.
    8. The applicant’s agents, officers, or employees have a prior conviction for motor fuel tax evasion in this state or any state, federal, or foreign jurisdiction.
  2. No license shall be granted when the applicant or anyone connected with the applicant’s business has been previously convicted of any violation of R.S. 47:818.1 et seq. or of any felony under the laws of this state or of the United States.
Can my license be revoked?

Yes, the secretary may revoke the license of any person licensed upon written notice sent by certified mail to the licensee’s last know address appearing in the secretary’s files, for any of the following reasons:

  1. Filing by the licensee of a false report of the data or information required.
  2. Failure, refusal, or neglect of the licensee to file a report or information required.
  3. Failure of the licensee to pay the full amount of all taxes due or pay any penalties or interest due as required to be paid by such licensee.
  4. Failure of the license to keep accurate records of the quantities of gasoline or diesel fuel received, produced, refined, manufactured, compounded, sold, or used in Louisiana.
  5. Failure to file a new, larger, or additional surety bond as required by the secretary pursuant to R.S. 47:818.40.
  6. Conviction of the licensee, licensee’s agents, officers or employees, or a principal of the licensee for any act prohibited.
  7. Failure, refusal, or neglect of a licensee to comply with any other provision of R.S. 47:818.1 et seq. or any rule promulgated.
  8. If a license or registration issued by another state was canceled for cause.
  9. The licensee is determined not to be the real party in interest.
  10. Any prior license of the real party in interest has been revoked for cause.
  11. The licensee, or any of the licensee’s agents, officers, or employees, has a prior conviction for motor fuel tax evasion in this state or any state, federal, or foreign jurisdiction and the conviction was not disclosed on the application.
What are the bond requirements for each license?

Bond requirements vary depending on the registration. The amount required is either the amount shown below for the respective license or an amount equal to three months tax liability, whichever is greater. The minimum amounts are:

Terminal Operator$1,000,000
Supplier$50,000
Permissive Supplier$50,000
Distributor$20,000
Importer$20,000
Exporter$20,000
Blender$20,000
Interstate Motor Fuel User$20,000
Motor Fuel TransporterN/A
Aviation Fuel DealerN/A
If my surety bond was waived before July 1, 2006, do I need to post a new bond?

No.

What are the different tax returns and their due dates?
Tax ReturnDue Date
Supplier/Permissive Supplier Monthly Return22nd day of the month following the period covered.
Distributor/Exporter/Blender Monthly Return20th day of the month following the period covered.
Importer Monthly Return15th day of the month following the period covered.
Terminal Operator Annual ReturnLast day of February.
Interstate Motor Fuel User Quarterly Return25th day of the month following the period covered.
Motor Fuel Floor Stock Tax ReturnMust be filed by August 1, 2006, and the tax paid by January 1, 2007. A $100 penalty is assessed if the return is filed after August 31, 2006.
Motor Fuel Back Up Tax Return20th day of the month following the month the transaction occurred.
The following information returns have a $100 penalty if not filed on or before the due date:
Terminal Operator Monthly Return20th day following the period covered.
Motor Fuel Transporter Monthly Return20th day following the period covered.
Aviation Fuel Dealer Quarterly Return25th day following the period covered.
What are my duties as a Trustee?
  1. As trustee of the taxes paid, you have a fiduciary duty to remit to the secretary the amount of tax received. If you fail to remit the tax, you are liable for the taxes paid to you.
  2. You must notify a licensed distributor, licensed exporter, or licensed importer who received gasoline or diesel fuel from you during a reporting period of the number of taxable gallons received.
  3. You must notify the secretary within the time period established by the secretary if a licensed distributor, licensed exporter or licensed importer did not pay the tax, you must notify the Department of Revenue.
  4. You cannot apply the payment of tax to a debt that the person making the payment owes for gasoline or diesel fuel purchased from you.
Who is eligible for the 1.5 percent discount?

Suppliers and Permissive Suppliers are eligible to receive the 1.5% discount if they allow licensed Distributors and Importers a discount of 1%.

If you underpay but file on time do you get the discount?

No. Returns must be fully paid and timely filed to receive the discount.

Who is eligible for the one percent discount from the Supplier or Permissive Supplier?

Licensed Distributors and Importers are eligible for the discount.

If I am a licensed supplier or permissive supplier can I defer the inspection fee to a licensed distributor or importer to the 20th of the month?

Yes, since the inspection fee is due at the same time as the tax.

Who is allowed to take the credit for tax on reported bad debt?

Suppliers and Permissive Suppliers can only take the credit for the tax amount not received from their licensed Distributors or Importers.

Are there a maximum number of credits a Supplier or Permissive Supplier can take?

No.

Does the Supplier or Permissive Supplier have to notify the department before taking the credit for tax on reported bad debt?

Yes, they must notify the Department within 30 days from the date the tax was due from the licensed Distributor or Importer.

Can an exporter apply for a refund on fuel that is exported with Louisiana tax and/or fee paid?

Yes, if a supplier does collect Louisiana tax and/or fees on gasoline or diesel fuel that is exported, the exporter can apply for a refund. However, the exporter must be licensed with this state to apply for a refund.

If clear fuel is dumped in a dyed fuel tank is there an allowance that can be taken to get the tax back?
  1. Possibly. You should file a claim for refund as follows:
    1. Complete a Claim for Refund of Taxes Paid (Form R-20127-L), which can be downloaded from the Department’s website at www.revenue.louisiana.gov;
    2. Attach a notarized statement certifying that the tax was paid on the clear fuel at the time purchased; and
    3. Attach a copy of the invoice showing the number of gallons being claimed and a statement attesting to the facts.
  2. After the facts and documents supporting the claim for refund are filed and reviewed, the taxpayer will be notified of the Department’s decision.
Can you get a refund on clear kerosene and/or diesel used in an off-road manner? If so, what documentation is needed?
  1. A refund is allowed only if dyed kerosene or diesel is unavailable.
  2. Registration Application for Diesel Fuels Refund–Users (Form R-5377) must be completed and a certificate issued from the Department before the clear kerosene or diesel fuel is purchased.
Can I be charged with a misdemeanor? Is there a penalty?

Yes, if you commit any of the following offenses you are guilty of a misdemeanor, and upon conviction, will be fined not less than $1,000 nor more than $5,000 or imprisoned not more than two years, or both:

  1. Fail to maintain any record required by R.S. 47:818.1 et seq.
  2. Make a false statement in a license application, return, invoice, statement, or any other document required by the Department.
  3. Make a false statement in an application for a refund.
  4. Fail to make a required disclosure of the correct amount of gasoline or diesel fuel sold or used in this state.
  5. Fail to file a new, replacement, larger, or additional surety bond as required.
  6. Use, deliver, or sell any aviation fuel for use or intended for use in highway vehicles.
  7. Interfere with or refuses to permit seizures.
  8. Deliver gasoline or diesel fuel from a transport vehicle to the fuel supply tank of a highway vehicle.
  9. Dispense or allow to be dispensed into the supply tank of a vehicle, watercraft, or aircraft any gasoline on which tax levied has not been paid.
  10. Dispense into the supply tank of a highway vehicle required to be licensed any diesel fuel on which tax levied has not been paid.
  11. Purchase gasoline or diesel fuel from an unlicensed supplier, unlicensed permissive supplier, unlicensed importer or unlicensed distributor.
Can I be charged with a felony? Is there a penalty?

Yes, if you commit any of the following offenses with the intent either to evade or circumvent the tax levied by R.S. 47:818.1 et seq. or to assist any other person in an effort to evade or circumvent the tax levied you are guilty of a felony, and upon conviction, will be fined not less than $5,000 nor more than an amount commensurate to the amount of tax combined with interest and penalties lost to the state due to those actions or imprisoned with or without hard labor for not less than two nor more than ten years, or both.

  1. Alter, manipulate, replace, or in any other manner tamper of interfere with, or cause to be altered, manipulated, replace, tampered, or interfered with, a totalizer attached to gasoline or diesel fuel pumps to measure the dispensing of gasoline or diesel fuel.
  2. Fail to pay gasoline or diesel fuel taxes and divert the tax proceeds for other purposes.
  3. As a licensee or the agent or representative of a licensee, convert or attempt to convert gasoline or diesel fuel tax proceeds for the use of the licensee or the licensee’s agent or representative, with the intent to defraud this state.
  4. Collect gasoline or diesel fuel taxes when not authorized or licensed by the secretary to do so.
  5. Import gasoline or diesel fuel into this state in contravention of R.S. 47:818.1et seq.
  6. Conspire with any person or persons to engage in an act, plan, or scheme to defraud this state of gasoline or diesel fuel tax proceeds.
  7. Alter or attempt to alter the strength or composition of any dye or marker in any dyed gasoline or diesel fuel.
  8. Fail to remit to the secretary any tax levied, if the person has added or represented that the tax was added to the sales price of the gasoline or diesel fuel and has collected the amount of the tax.
What is the taxability of biodiesel?

Biodiesel is treated like any other diesel fuel, regardless of formulation. If biodiesel is used in a vehicle licensed for highway use, the biodiesel should be clear and is subject to tax. If biodiesel is used in a vehicle not licensed for highway use, the biodiesel must be dyed and is subject to the inspection fee only.

If I produce biodiesel am I a blender?

No. If you were adding finished biodiesel to petroleum diesel, you would be blending. If you are producing biodiesel, you are considered in the same light as a producer of motor fuel, and would be subject to the same licensing requirements.

Is ethanol taxable?

Yes. Ethanol is taxed in the same manner as gasoline.

What is the tax rate on Gasoline, Diesel and Special Fuels?

Gasoline, diesel and special fuels are taxed at a rate of $.20 per gallon.

How much is the Inspection Fee per gallon?

The Inspection Fee is $.00125 per gallon.

Can a supplier collect destination state taxes and/or fees as well as Louisiana tax and/or fee?

No, a supplier should never collect both state’s taxes and/or fees.

Can tax free transactions occur in the pipeline?

Yes, a tax free transaction can only occur in the pipeline if all parties involved in the transaction have a valid Louisiana Supplier or Permissive Supplier license. Otherwise, the tax is to be collected from the person ordering the sale or transfer in the bulk transfer/terminal system.

What is a diversion and how is a diversion reported?

A diversion is an accidental or deliberate transporting of motor fuel from the source to a destination other than the original destination state printed on the shipping document. Prior to any diversion or change to the shipping document, the shipper, the motor fuel transporter, or an agent of either must notify TRAC III of the diversion in order to receive a diversion number. Once the diversion number is obtained, the shipper, the motor fuel transporter, or agent of either, must manually write the change in the destination state and the diversion number on the shipping document. A copy of the amended shipping document must be given to the person to whom the gasoline or diesel fuel is delivered.

How do I register with TRAC III to notify a state of a diversion?

The National Fuel Diversion Registry telephone-in diversion registration system will be replaced by the TRAC III web-based diversion registration system as of July 1, 2006. In order to register a diversion of fuel, go to http://www.trac3.net/, click on "Registration", enter requested company data (for the initial registration only), and follow the simple steps. There is no cost to register a diversion.

Can a penalty be assessed for a diversion?

Yes, a penalty may be assessed in an amount equal to tax and fee on the product or $1,000 whichever is greater against the person who diverts the shipment or alters the shipping document.