January 31, 1985

You request information concerning the Massachusetts fuel tax reporting and licensing requirements of parties to leasing arrangements.

In general, a Massachusetts excise is imposed on all motor fuels used to power motor vehicles over the highways of Massachusetts.

An excise is imposed on fuels (all products commonly known as gasoline) and special fuels (all other combustible gases and liquids such as propane and diesel) purchased in Massachusetts. (G.L. c. 64A; 64E). Subject to reciprocity restrictions, a person operating a motor vehicle in another state using fuel or special fuel acquired in Massachusetts may apply (to Massachusetts) for a credit or refund equal to the tax paid to the other state. (G.L. c. 64F, § 4).

Massachusetts General Laws Chapter 64F, Section 3 provides that any person who acquires fuel or special fuel outside Massachusetts and uses such fuel on the Massachusetts highways, or who has in his possession fuel or special fuel for such use, including any person who although not a Massachusetts resident regularly uses the Massachusetts highways, is subject to an excise on the privilege of using the Massachusetts highways. The excise does not apply to persons who, as transients operate motor carriers into or through Massachusetts, using fuels or special fuels acquired outside Massachusetts, provided that such fuels or special fuels are wholly contained within the supply tanks of such vehicle, nor does the excise apply to any person who acquires fuel or special fuel outside Massachusetts and uses it to operate a less than thirty gallon tank non-commercial passenger vehicle over the Massachusetts highways.

The Massachusetts Turnpike is not considered a Massachusetts highway. (G.L. c. 64F, § 3). Therefore, a person who buys fuels or special fuels on which a Massachusetts excise has been paid or is chargeable and uses such fuel on the Massachusetts Turnpike may apply for reimbursement of the excise paid. (G.L. c. 64A, § 7; 64E, § 5).

A person (or company) subject to the excise under Chapter 64F, Section 3 must obtain a single Motor Carrier Tax License and in addition must obtain one Motor Carrier Tax Vehicle License for each motor vehicle operated in Massachusetts. (G.L. c. 64F, § 2; 62C, § 67). A person owning or leasing a motor vehicle propelled by special fuels must obtain a Massachusetts Special Fuel Users License to use such vehicle on the Massachusetts highways. (G.L. c. 64E, § 2).

If motor vehicles used on the Massachusetts highways are subject to leasing arrangements, either the lessor or the lessee may obtain the Motor Carrier Tax License. The party holding the Motor Carrier Tax License obtains the Motor Carrier Tax Vehicle Licenses, one for each vehicle to be operated in Massachusetts. If any vehicle to be operated in Massachusetts is powered by special fuels, the party holding the Motor Carrier Tax License obtains the Special Fuels Users License. If the leased vehicle used on the Massachusetts highways is not under a Motor Carrier Tax License, but is subject to a Special Fuels Users License, either the lessor or the lessee may obtain the Special Fuels Users License.

Every person licensed under 64F must file quarterly returns and pay a tax on the number of gallons of fuels and special fuels used by him in Massachusetts. (G.L. c. 62C, § 16(f)). The licensee, the party required to file returns and make tax payments, is entitled to the refunds and reimbursements available under Chapters 64A, Section 7; 64E, Section 5 and 64F, Section 4.

Either the lessor or the lessee to a leasing arrangement may obtain the necessary licenses. Licensees are required by statute to file returns and pay fuel taxes. The Massachusetts Department of Revenue will accept filings and payments from the non-licensed party to a leasing arrangement. It is the licensed party however, who bears the ultimate responsibility for filings and payments. Contractual agreement between parties cannot alter this responsibility. (A hold harmless agreement will not relieve the licensed party from ultimate responsibility for filing returns and payment of tax).

Enclosed please find a copy of Letter Ruling 84-82 relative to the administration of the Massachusetts fuel tax.

Very truly yours,

/s/Ira A. Jackson

Ira A. Jackson
Commissioner of Revenue

IAJ:SFR:mf

LR 85-10