DAR File No. 32334

Tax Commission, Auditing

R865-4D-2

Refund Procedures for Undyed Diesel Fuel Used Off-Highway or to Operate a Power Take-Off Unit, and Sales Tax Liability Pursuant to Utah Code Ann. Sections 59-13-301 and 59-13-304

NOTICE OF PROPOSED RULE

DAR File No.: 32334
Filed: 01/29/2009, 12:09
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

H.B. 106 (2008 General Session) imposed a special fuels tax on compressed natural gas (CNG) effective 01/01/2009. (DAR NOTE: H.B. 106 (2008) is found at Chapter 153, Laws of Utah 2008, and was effective 01/01/2009.)

Summary of the rule or change:

The proposed amendment broadens the section to bring in CNG, since that fuel is subject to a special fuels tax; and includes definition and refund language that was previously in Section R865-4D-24, which is being removed. (DAR NOTE: The proposed amendment to Section R865-4D-24 is under DAR No. 32336 in this issue, February 15, 2009, of the Bulletin.)

State statutory or constitutional authorization for this rule:

Sections 59-13-301 and 59-13-304

Anticipated cost or savings to:

the state budget:

None--Any fiscal impact was taken into account in H.B. 106 (2008).

local governments:

None--Any fiscal impact was taken into account in H.B. 106 (2008).

small businesses and persons other than businesses:

None--Any fiscal impact was taken into account in H.B. 106 (2008).

Compliance costs for affected persons:

None--Sellers of CNG will now be required to collect a special fuels tax on that fuel.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no anticipated fiscal impacts. All possible impacts should have been taken into account in H.B. 106 (2008). D'Arcy Dixon, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Tax Commission
Auditing
210 N 1950 W
SALT LAKE CITY UT 84134

Direct questions regarding this rule to:

Cheryl Lee at the above address, by phone at 801-297-3900, by FAX at 801-297-3919, or by Internet E-mail at clee@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

03/17/2009

This rule may become effective on:

03/24/2009

Authorized by:

D'Arcy Dixon, Commissioner

R865. Tax Commission, Auditing.

R865-4D. Special Fuel Tax.

R865-4D-2. Refund Procedures for [Undyed Diesel]Special Fuel Used Off-Highway or to Operate a Power Take-Off Unit, and Sales Tax Liability Pursuant to Utah Code Ann. Sections 59-13-301 and 59-13-304.

(1)(a) "Off-highway," for purposes of determining whether special fuel is used in a vehicle off-highway, means every way or place, of whatever nature, that is not generally open to the use of the public for the purpose of vehicular travel.

(b) "Off-highway" does not include:

(i) a parking lot that the public may use; or

(ii) the curbside of a highway.

[(1)](2) Fuel used in a vehicle off-highway is calculated by taking off-highway miles divided by the average number of miles per gallon. Any other method of calculating [undyed diesel]special fuel used off-highway must be supported by on-board computer information or other information that shows the number of gallons used off-highway with accuracy equal or comparable to on-board computers.

[(2)](3) Where a power take-off unit is driven by the main engine of the vehicle and used to operate auxiliary equipment, a quantity, as enumerated below, of the total [undyed diesel]special fuel delivered into the service tank of the vehicle shall be deemed to be used to operate the power take-off unit. The allowances for power take-off units are as follows:

(a) concrete mixer trucks - 20 percent;

(b) garbage trucks with trash compactor - 20 percent;

(c) vehicles with powered pumps, conveyors or other loading or unloading devices may be individually negotiated but shall not exceed:

(i) 3/4 gallon per 1000 gallons pumped; or

(ii) 3/4 gallon per 6000 pounds of commodities, such as coal, grain, and potatoes, loaded or unloaded.

(d) Any other method of calculating the amount of [undyed diesel]special fuel used to operate a power take-off unit must be supported by documentation and records, including on-board computer printouts or other logs showing daily power take-off activity, that establish the actual amount of power take-off activity and fuel consumption.

[(3)](4) Allowances provided for in Subsections [(1)](2) and [(2)](3) will be recognized only if adequate records are maintained to support the amount claimed.

[(4)](5) In the case of users filing form TC-922, Fuel Tax Return For International Fuel Tax Agreement (IFTA) And Special Fuel User Tax, or form TC-922C, Refund of Tax Paid on Exempt Fuel for Non-Utah Based Carriers, the allowance provided for in Subsection [(2)] will be refunded to the extent total gallons allocated to Utah through IFTA exceed the actual taxable gallons used in Utah, except that in no case will refunds be allowed for power take-off use that does not occur in Utah.

[(5)](6) [Undyed diesel]Special fuel used on-highway for the purpose of idling a vehicle does not qualify for a refund on special fuel tax paid since the fuel is used in the operation of a motor vehicle.

(7) The following documentation must accompany a refund request for special fuel tax paid on special fuel used in a vehicle off-highway:

(a) evidence that clearly indicates that the special fuel was used in a vehicle off-highway;

(b) the specific address of the off-highway use with a detailed description of the off-highway nature of the location;

(c) the amount of time in which the vehicle used the fuel off-highway;

(d) the amount of fuel the vehicle used off-highway; and

(e) the make and model, weight, and miles per gallon of the vehicle used off-highway.

[(6)](8) [Diesel]Special fuel that is purchased exempt from the special fuel tax or for which the special fuel tax has been refunded is subject to sales and use tax, unless specifically exempted under the sales and use tax statutes.

 

KEY: taxation, fuel, special fuel

Date of Enactment or Last Substantive Amendment: [January 1], 2009

Notice of Continuation: February 26, 2007

Authorizing, and Implemented or Interpreted Law: 59-13-301; 59-13-304