Motor Fuels Excise
Generally, motor fuels excise is due on fuel used on the highway. The tax rate on gasoline and diesel is $.21 per gallon and the tax is included in the price charged at the retail level.
Very few entities are exempt from the excise due on fuel used on MA highways. Exempt entities include: the Federal Government, the Regional Transit Authorities and three state agencies exempted by their enabling statutes (the Water Resources Authority, the Port Authority and the MBTA).
Motor Fuel Refunds
There are exempt uses of motor fuel. If an individual purchases motor fuel, pays the MA fuels excise and then uses that fuel on the Massachusetts Turnpike or for off-road purposes (such as in off-road equipment or in water craft), that individual may apply for a refund of MA fuels excise.
There are seven different types of fuel refund forms. Some are general use and some are used for specific purposes. The following is a list of refund applications.
|GT-9||Off-road use of gasoline|
|GT-9A||Gasoline used in farming|
|GT-9M||Gasoline used in watercraft|
|GT-9T||Gasoline used on the MA Turnpike|
|JFT-9||Aircraft (Jet) Fuel used in an untaxed manner|
|SFT-9||Off-road use of Special Fuels (Diesel, Propane and Liquefied Gases)|
|SFT-9T||Special Fuels (Diesel, Propane, etc.) used on the MA Turnpike|
All of the refund forms are available.
Motor Fuel Refund Application basics below
Heating oil is not subject to fuels excise. Home heating oil is also exempt from sales and use tax. The business use of heating oil, however, may be subject to sales and use tax. If you have questions, please call the Customer Services Bureau of the MA Department of Revenue at 617-887-6367.
Generally, motor fuels excise is collected and remitted to the MA Department of Revenue by licensed wholesalers. When making a sale, licensees are responsible for determining if it is a taxable sale. If the taxes are due, the licensee must collect and remit the tax in a timely manner, prior to the 20 th of the month following the month in which the activity took place. Licensees are required to file returns each month, whether or not taxes are due. Those who do not meet statutory requirements will not be licensed and must pay MA excise on all purchases. All fuel licenses expire on December 31 st and must be renewed on an annual basis.
MA General Laws require any person qualified to do business in MA who produces, refines, manufactures or compounds gasoline, or who elects to qualify as a distributor by importing or receiving fuel in MA for resale in bulk to license with the Department of Revenue.
Applicants who qualify may license as a Gasoline Distributor. Distributors may import and export fuel and sell fuel free of MA gasoline excise to other licensed Distributors or licensed Exporters. To qualify as a Distributor, a person must have at least 25,000 gallons storage of gasoline in MA (one location) and must sell at least 75% of the fuel received to others for resale. Persons who do not qualify as a Distributor may choose to become licensed as a Gasoline Importer and/or a Gasoline Exporter.
A licensed Gasoline Importer imports gasoline for use or resale. Importers must pay MA fuels excise on all imported fuel. A licensed Gasoline Exporter exports gasoline for use or resale. Exporters are exempt from the MA fuels excise on all exported fuel. Exporters may not split loads. The complete load must be exported. A person licensed as a MA Importer and MA Exporter should file one return, reporting on combined activity.
MA General Laws require any person who imports, sells or delivers special fuels in bulk or who dispenses special fuels from bulk storage into a motor vehicle to license with the Department of Revenue. Special fuels are all fuels, except gasoline, used to propel motor vehicles on or over the highway. Special fuels include diesel and all liquefied gases (propane, CNG, LNG, etc.). The tax rate on diesel is fixed at $.21 per gallon, while the tax rate on liquefied gases is set each quarter, recently fluctuating between $.16 and $.24 per gasoline gallon equivalent.
Any person who sells or delivers special fuels to a user-seller (bulk sales) and any person who imports special fuels into MA is required to be licensed as a Supplier. Any person who dispenses fuel from bulk storage into motor vehicles is required to be licensed as a User-seller, unless they elect to license as a Supplier.
Suppliers and User-sellers must file a monthly return by the 20 th day of the month following the month for which the return is due. Suppliers remit all tax due with their monthly returns (Form SFT-3). User-sellers pay the tax at the time of purchase to their Suppliers and file monthly informational returns (Form SFT-4). Licensees are required to file returns each month, whether or not taxes are due.
Mandated Electronic Payment of Tax
Gasoline Distributors and Importers and Special Fuel Suppliers are mandated to pay fuels excise electronically if their liability for the previous year for that particular tax was more than $10,000. Payment may be made via ACH Debit (see the Business Quick Link on the Department of Revenue's home page) or via ACH Credit (application can be obtained from the Electronic Funds Business Unit at 617-887-5020). Whether or not payment is made electronically, a paper return must be filed with the Department of Revenue each month.
Motor Fuel Refund Application Basics
The following information relates to the filing of MA motor fuel refund applications.
- All refund applications must include documentation that MA fuels excise was paid. Claims with insufficient supporting documentation and claims based on out-of-state purchases will be denied.
- Claims based on estimates are not acceptable.
- Generally, refund applications must be received within two years of the purchase of the fuel for which the refund claim is made. (Note: the refund application for use of gasoline in watercraft-Form GT-9M-must be filed within six months of purchase.)
- Documentation is usually in the form of the original sales receipt. All sales receipts must state the supplier's name and address, the date of the purchase, the type of fuel, the number of gallons purchased and the cost of the fuel.
- Separate applications must be prepared for claims from different years. Different applications must be prepared for different types of fuel.
- Applications may be filed as often as quarterly. Claims should be broken down by calendar quarter. Each quarter can be claimed only once. Additional or amended claims for a particular quarter can only be filed with permission of the Excises Unit (617-887-5060). Additional or amended claims must include a complete copy of the original request.
- Unless the fuel is exempt under the sales or use tax, use tax is due on any fuel purchased if the motor fuels excise was not paid or was refunded. Most refund applicants must complete the "Adjustment for Use Tax" section of the refund form. The effect will be to reduce the amount of their refund by the amount of the use tax due.
- International Fuels Tax Agreement (IFTA) motor carriers are not allowed by statute to file a refund application for MA turnpike travel by qualified vehicles. This claim must be made as a deduction on the quarterly IFTA return. Motor carriers making this claim must file and pay the associated use tax (Form ST-10). Refund claims for travel on the MA turnpike by non-qualified vehicles must be made using form SFT-9T (special fuels) or form GT-9T (gasoline).
The jet fuel excise is a local option tax. The imposition, collection and payment of jet fuel excise shall apply only in a municipality that has voted to accept the excise. Currently, jet fuel excise has been accepted in Bedford, Boston, Concord, Lexington, Lincoln, North Andover, Norwood and Worcester. The excise is collected by the state and returned to affected communities on a quarterly basis.
Jet Fuel Licensing
MA General Laws require any person who dispenses jet fuel into an aircraft to license as a User. MA General Laws also require any person who imports jet fuel in bulk into MA or any person who sells or delivers jet fuel in bulk or any User who elects to qualify as a Supplier to license as a Supplier.
Jet fuel excise is collected and remitted to the Department of Revenue by licensed Suppliers. When making a sale, Suppliers are responsible for determining if it is a taxable sale. If the taxes are due, the Supplier must collect and remit the tax in a timely manner, prior to the 20 th of the month following the month in which the activity took place. Suppliers are required to file returns each month, whether or not taxes are due. Users must file an informational return. Jet fuel Suppliers are mandated to make payments electronically if their liability for the previous year was greater than $10,000. (See Mandated Electronic Payment of Tax for payment options.)
Jet Fuel Suppliers are required to file with the Department of Revenue a surety bond issued by a surety company licensed to do business in the Commonwealth of Massachusetts. Generally, bonds are for one year and cover the period from January 1 (or the effective date of the license) through December 31 or the date that the license is suspended, revoked or otherwise cancelled. Jet fuel bonds must be equal to three months average tax liability but not less than $10,000. Failure to obtain the required bond will result in a denial of the license application.
Note: Effective January 1, 2012, distributors, importers and exporters of gasoline are no longer required to furnish a bond with the Gasoline License Application.
Uniform Oil Response and Prevention Fee
MA General Laws, Chapter 21M established the Oil Spill Prevention and Response Trust Fund. The purpose of this capped fund include the following: covering the costs of spill prevention, responding to and remediating oil spills, paying damage claims that can not otherwise be compensated, providing training and support to state and municipal responders, and paying for vessel navigational safety improvements. The fee is imposed on the owner of petroleum products at the time the petroleum products are received at a marine terminal within the Commonwealth by means of a vessel from a point of origin outside the Commonwealth. The marine terminal operator registered under Chapter 21M collects the fee from the owner of the petroleum product or crude oil upon receipt at the marine terminal. The current fee is five cents ($0.05) per barrel of petroleum product or crude oil.
Ethanol can be produced from both agricultural products and petroleum. Pure (unblended) ethanol that is derived from agricultural products may be exempted from the Oil Spill and Prevention Response Fund fee if its source is properly documented. The marine terminal operator must obtain, and retain as part of its records, a copy of the bill of lading, or the certificate of origin that accompanies the shipment of ethanol. Either the bill of lading, or the certificate of origin, or both, must indicate that the ethanol is derived from agricultural sources.
Marine Terminal Operators
Marine terminal operators collect the Uniform Oil Response and Prevention Fee and must remit the fee to the Department of Revenue ("DOR") by the 30 th of each month based upon the number of barrels received in the preceding month. Terminal operators are required to file returns each month whether or not taxes are due. The return, Form OR-1, is available on the DOR website ( www.mass.gov/dor) or from the Excises Unit (617-887-5040). The Excises Unit will issue a license for the current year to a Marine Terminal Operator in good standing with the DOR upon receipt of the operator's initial return. Licenses for subsequent years will be issued at the beginning of each calendar year. There is no license fee.
Underground Storage Tank Fee
Massachusetts General Laws, Chapter 21J established the Petroleum Clean Up Fund. The purpose of this fund is as follows: (1) provide owners and operators of underground storage tanks reimbursement for costs they incur in remediating environmental releases and (2) provide up to 50% reimbursement to local jurisdictions for costs they incur in removing and/or replacing underground storage tanks.
The program receives its revenue through tank and delivery load fees. Tank fees are collected from registered owners for each gasoline or diesel underground storage tank in service at the facility. Load fees are collected on each delivery load sold to customers who are not a gasoline distributor or unclassified importer licensee or a licensed supplier of special fuels or who do not have a valid exemption certificate.
The current fee is $250 for each delivery load (10,000 gallons) or 2.5 cents per gallon for quantities less than a delivery load. Deliveries to federal, state and municipal governments and to above ground storage tanks are exempt.
For additional information, see " Underground Storage Tank Program" on the Department of Revenue website.
For additional information on Motor Fuels see Massachusetts General Laws (MGL): Gasoline (64A), Special Fuels (64E), IFTA (64F) and Jet Fuel (64J). You may also call the Fuels Excise Section at 617-887-5040.