Current Status of
rev. June 2007
FUEL EXCISE TAXES FOR SCHOOL DISTRICTS
Listed below is the current status of fuel excise taxes effective as of June 2007, for both the state and federal governments: State fuel excise tax: Federal fuel excise tax: There were no increases in state fuel excise taxes in 2007. Propane increased Oct. 1, 2006 to .183 FET per gallon. Effective Oct. 1, 2005, there are no exemptions permitted for the $.001 Leaking Underground Storage Tank Tax (LUSTT) on any type of fuel product. Beginning January 1, 2006 - new law pertaining to credit card fuel purchases (see page 2 and page 3).
State Excise Tax
Type of Fuel
Amount of Tax Per Gallon Are Schools Exempt?
Federal Excise Tax
Amount of Tax Per Gallon Are Schools Exempt?
Yes Gasoline Gasoline blended product Diesel Propane 24.0¢ 24.0¢ 26.0¢ 23.0¢
x2 x2 x2 x1
No 18.4¢ 18.4¢ 24.4¢ 18.3 ¢
x3 x3 x4 x5
FOR FEDERAL EXCISE TAX PURPOSES 3. Gasoline – purchases made using cash; checks or credit cards, the school or supplier can file the claims. If the supplier is an IRS registered UV (ultimate vendor) or CC (credit card issuer), they should file the claims. 4. Diesel – for purchases paid with cash, checks or credit cards; only the IRS registered UV or CC company is permitted to file the claims. However, if a credit card is used and the card company is not IRS registered, the school is permitted to file a claim only for those specific purchases. 5. Propane – No FET is applicable when sold to a school for use in a vehicle. If FET is paid, the school can file the claim. Questions on FEDERAL excise tax? Call (316) 352-7487 or 7486
FOR STATE EXCISE TAX PURPOSES 1. There would be no state LP-gas (propane) taxes if the school buses are: (a) owned and operated by the school district, and (b) not required to be licensed. 2. School buses may be exempt from the taxes on gas, gasohol and/or diesel. (a) School buses which use diesel and are not tagged or required to be tagged may use the “Ruby Red” dyed diesel fuel which is purchased without motor fuel tax. (b) Other school buses which are registered (tagged) using gasoline or clear diesel must apply for a refund of motor fuel tax. (c) School districts can apply for a refund permit, which means they pay the tax and apply for a refund. A Motor Fuel Refund Permit will need to be obtained by the purchaser of the fuel. There are two ways to obtain the Application for Motor Fuel Refund permit (Form MF 51):
Download: http://www.ksrevenue.org/pdf/forms/mf51.pdf Or Call: Motor Fuel Refund Section, Kansas Department of Revenue at
(785) 368-8222 (automated voice system – press 5, then 6). The permit is good for three years and is $6.00. (d) Suburban's, vans, and cars are not considered as school buses under the definition contained in the law and, therefore, are not exempt from state motor fuel excise tax. (If vans can legally carry 10 or more passengers and are transporting students or personnel to and from school activities, they are eligible for a refund of state fuel tax.) Other school owned vehicles, i.e., dump trucks and delivery vehicles may NOT use “Ruby Red” dyed diesel fuel, or apply for a refund on the fuel that is used unless these vehicle are used in an off-road manner.
NOTE: Districts can file Form 8849 with Sch. 1 – must be at least at $750 & the FET was paid to your fuel supplier. Fiscal quarters may be combined to reach $750. An annual Form 8849 “Claim for Refund” can be filed at the end of your fiscal year for any FET amount (no minimum) which was not refunded during the year. Source: State Excise Tax Chart: http://www.ksrevenue.org/pdf/TaxRates.pdf
This sheet was reviewed and approved by the proper state and federal personnel.
Federal Excise Tax on Fuels for credit card fuel purchases:
beginning January 1, 2006
1. If undyed diesel is purchased without the use of a credit card, only the Form 637 IRS registered ultimate vendor can file the claims. The school cannot for diesel claims. 2. If gasoline fuels are purchased without the use of a credit card, the Form 637 IRS registered ultimate vendor can file the claims. If the supplier is not registered, then the school may file the claim for gasoline or gasoline blended fuels. 3. If a credit card is used to purchase either undyed diesel or gasoline fuels, the schools may file a claim on taxed diesel or gasoline; but only if the credit card company is not registered as a Form 637 IRS credit card issuer of fuels. If they are registered, then the credit card company is required to file the claims.
If you are unsure whether or not the federal excise tax is included in the price you pay, always contact your fuel supplier before filing any claims.
For More Information:
Publication 510, Chapter 2, discusses fuel credits and has copies of the exemption certificates. This publication can be downloaded from the IRS webpage at www.irs.gov. This form can also be downloaded from the IRS website: http://www.irs.gov/pub/irs-pdf/f8849s1.pdf Form 8849 (Schedule 1) - “Claim for Refund”
(2) Model certificate.
CERTIFICATE OF BUYER OF TAXABLE FUEL FOR USE BY A STATE OR NONPROFIT EDUCATIONAL ORGANIZATION
(To support credit card issuer’s claim for a credit, refund, or payment under § 6416(a)(4)(B) or § 6427(l)(6)(D) of the Internal Revenue Code.) ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ Name, address, and employer identification number of credit card issuer. The undersigned ultimate purchaser (“Buyer”) hereby certifies the following under the penalties of perjury (check one): ____ Buyer will use the taxable fuel to which this certificate relates for the exclusive use of a state; or ____Buyer will use the gasoline to which this certificate relates for the exclusive use of a nonprofit educational organization. This certificate applies to all purchases made with the credit card identified below during the period specified: 1. Buyer’s account number ______________________________. 2. Effective date of certificate ___________. 3. Expiration date of certificate ___________ (period not to exceed 2 years after the effective date). Buyer will provide a new certificate to the credit card issuer if any information in this certificate changes. Buyer understands that by signing this certificate, Buyer gives up its right to claim a credit or payment for the taxable fuel purchased with the credit card to which this certificate relates. Buyer acknowledges that it has not and will not claim any credit or payment for the taxable fuel purchased with the credit card to which this certificate relates. Buyer understands that the fraudulent use of this certificate may subject Buyer and all parties making such fraudulent use of this certificate to a fine or imprisonment, or both, together with the costs of prosecution. ________________________________________________________________ Printed or typed name of person signing ________________________________________________________________ Title of person signing ________________________________________________________________ Name of Buyer ________________________________________________________________ Employer identification number ________________________________________________________________ Address of Buyer ________________________________________________________________ Signature and date signed