2023 Tennessee Code › Title 67 - TAXES AND LICENSES (§§ 67-1-101 — 67-10-107) › Chapter 3 - PETROLEUM PRODUCTS AND ALTERNATIVE FUELS TAX LAW (§§ 67-3-101 — 67-3-1407) › Part 1 - GENERAL PROVISIONS (§§ 67-3-101 — 67-3-103) › Section 67-3-103 - [Effective 1/1/2025] Chapter definitions

As used in this chapter, unless the context otherwise requires:
(1)
"Agricultural purposes" means operating tractors or other farm equipment used exclusively, whether for hire or not, in plowing, planting, harvesting, raising or processing of farm products at a farm, nursery or greenhouse; or operating farm irrigation systems; when such vehicles or equipment are not operated upon the public highways of this state;
(2)
"Alternative fuel" means a liquefied petroleum gas or compressed natural gas product used in an internal combustion engine or motor, or a hydrogen gas product used to power a fuel cell, to propel any form of motor vehicle, machine, or mechanical contrivance. "Alternative fuel" includes all forms of fuel commonly known as butane, propane, or compressed natural gas;
(3)
"Blend stock" means any petroleum product component of gasoline, such as naphtha, reformate, or toluene, that can be blended for use in a motor fuel. However, "blend stock" does not include any substance that will be ultimately used for consumer nonmotor fuel use and is sold or removed in drum quantities of not more than fifty-five gallons (55 gals.) at the time of the removal or sale;
(4)
"Blended fuel" means a mixture composed of gasoline or diesel fuel and another liquid, other than a minimal amount of a product such as carburetor detergent or oxidation inhibitor, that can be used as a fuel in a highway vehicle;
(5)
"Blender" means any person that produces blended motor fuel outside the bulk transfer/terminal system;
(6)
"Blending" means the mixing of one (1) or more petroleum products, with or without another product, regardless of the original character of the product blended, if the product obtained by the blending is capable of use or otherwise sold for use in the generation of power to propel a motor vehicle, an airplane, a motorboat, or other mechanical contrivance. "Blending" does not include blending that occurs in the process of refining by the original refiner of crude petroleum or the blending of products known as lubricating oil and greases;
(7)
"Bonded importer" means a person with a valid bonded importer's license under §
67-3-606
;
(8)
"Bulk end user" means a person who receives into the person's own storage facilities, for the person's own consumption, transport lots of taxable motor fuel;
(9)
"Bulk export" means the movement of petroleum products from a point in Tennessee to another state by means of transport truck, pipeline, marine vessel or rail, including any quantity of petroleum product placed by the manufacturer into the vehicle fuel supply tank of a newly manufactured motor vehicle;
(10)
"Bulk plant" means a motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be removed at a rack;
(11)
"Bulk transfer" means any transfer of a petroleum product within the bulk transfer/terminal system from one location to another by pipeline or marine delivery;
(12)
"Bulk transfer/terminal system" means the motor fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Thus, gasoline in a refinery, pipeline, vessel, or terminal is in the bulk transfer/terminal system. Taxable motor fuel in the fuel supply tank of any engine, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system;
(13)
"Commissioner" means the commissioner of revenue or the commissioner's designated subordinate official;
(14)
"Computer-type pump" means a pump used to dispense fuel, that has meters for registering the total sales price and gallons sold, and displays the price per gallon on the dispenser;
(15)
"Customer-controlled pump" means a pump used for dispensing motor fuel directly to a customer who can access the pump by way of a personal key, an identification number, or a customer card that is assigned to the customer by a licensed wholesaler;
(16)
"Dead storage" means the amount of taxable motor fuel that will not be pumped out of a storage tank because the motor fuel is below the mouth of the draw pipe. For this purpose, a vendor may assume that the amount of motor fuel in dead storage is two hundred gallons (200 gals.) for a tank with a capacity of less than ten thousand gallons (10,000 gals.), and four hundred gallons (400 gals.) for a tank with a capacity of ten thousand gallons (10,000 gals.) or more;
(17)
"Department" means the department of revenue;
(18)
"Destination state" means the state, territory, or foreign country to which petroleum products are directed for resale or use;
(19)
"Diesel fuel" means any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. A liquid meets this requirement if, without further processing or blending, the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle. "Diesel fuel" does not include jet fuel or kerosene unless sold for use in a diesel-powered highway vehicle or used in such vehicles, in which case the fuel shall be deemed diesel fuel for taxation purposes. With regard to jet fuel, it is further provided that the buyer must be registered to purchase jet fuel subject to federal taxes applicable to jet fuel, and the vendor must obtain certification of such fact satisfactory to the department prior to making the sale;
(20)
"Diesel-powered highway vehicle" means a motor vehicle, propelled by a diesel-powered engine, that is operated, or intended to be operated, on a highway;
(21)
"Distributor report" means the report required under §
67-3-701
;
(22)
"Diverted shipment" means any shipment of a petroleum product where the movement of that product by a transporter is changed from the original point of destination to another point of destination;
(23)
"Dyed diesel fuel" means diesel fuel dyed under United States environmental protection agency rules for high sulfur diesel fuel, or dyed under internal revenue service rules for low sulphur fuel, or dyed pursuant to any other requirements subsequently set by the environmental protection agency or internal revenue service, including any invisible marker requirements;
(24)
"Ethanol" means fuel grade ethanol;
(25)
"Export" means to obtain petroleum products in this state for sale, use, or distribution in another state. In applying this definition, the delivery of petroleum products outside Tennessee by or for the vendor constitutes an export by the vendor, and the delivery of petroleum products outside Tennessee by or for the purchaser constitutes an export by the purchaser;
(26)
"Exporter" means any person, other than a supplier, who purchases or otherwise holds title to taxable petroleum products in this state for the purpose of transporting or delivering the products to another state or country;
(27)
"Farm products" means flowers and plants, including cut flowers, flowering plants, potted plants, vegetables and vegetable plants, trees, shrubs, vines, ornamentals, sod, and mushrooms. "Farm products" also means livestock and poultry raised for food, including dairy products;
(28)
"Fuel alcohol" means any alcohol used or intended for use as fuel in a combustion engine or heating oil system;
(29)
"Fuel grade ethanol" means a product that meets the American Society for Testing and Materials (ASTM) standard in effect on January 1, 1995, and any successor rule, as the D-4806 specification for denatured fuel grade ethanol, for blending with gasoline for use as automatic spark-ignition engine fuels;
(30)
"Fuel transportation vehicle" means a vehicle designed for highway use that is also designed or used to transport motor fuels, including transport trucks and tank wagons;
(31)
"Gallon" or "net gallon" means the amount of petroleum product, corrected to a temperature of sixty degrees Fahrenheit (60°F) and a pressure of fourteen and seven-tenths pounds per square inch (14.7 p.s.i.), necessary to completely fill a standard United States gallon liquid measure;
(32)
"Gasohol" means a blended fuel composed of gasoline and ethanol;
(33)
"Gasoline" means all products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel, but does not include any product that is sold as a product other than gasoline and has an ASTM octane number of less than seventy-five (75) as determined by the "motor method"; and does not include aviation gasoline; provided, that the buyer is registered to purchase aviation gasoline free of tax, and the vendor obtains certification of such fact satisfactory to the department prior to making the sale;
(34)
"Governmental agency" means a department of a local, state or federal government, where such department is organized by and accountable to the authority of the executive, legislative, or judicial branch of that government; but does not include a private organization, association, or contractor, whether for profit or not, unless specifically identified in this chapter. For the purpose of this chapter, "governmental agency" includes a rescue squad chartered by the state as a nonprofit corporation or association and that is a member of the Tennessee Association of Rescue Squads, and a volunteer fire department chartered by the state as a nonprofit corporation or association;
(35)
"Gross gallons" means the total measured product, exclusive of any temperature or pressure adjustments, considerations or deductions;
(36)
"Heating oil" means a motor fuel that is burned in a boiler, furnace, or stove for heating or industrial processing purposes;
(37)
"Highway vehicle" means a self-propelled vehicle that is designed for use on a highway;
(38)
"Import" means to bring petroleum products into this state by any means of conveyance other than in the fuel supply tank of a motor vehicle. In applying this definition, the delivery of petroleum products into this state from outside Tennessee by or for the vendor constitutes an import by the vendor, and the delivery of petroleum products into this state from outside Tennessee by or for the purchaser constitutes an import by the purchaser;
(39)
"In this state" means the area inside the boundaries of Tennessee, but does not include the midstream of waterways that border the state;
(40)
"Invoiced gallons" means the gallons actually billed on an invoice from a vendor;
(41)
"K-1 kerosene" means burner fuel designed for unvented space heaters which meets ASTM standard D-3699, in effect on January 1, 1995, and any successor rule, as the specification for K-1 kerosene;
(42)
"Kerosene" has the same meaning as defined by the ASTM standards for kerosene;
(43)
"Liquid" means any substance that is liquid at temperatures in excess of sixty degrees Fahrenheit (60°F) and at a pressure of fourteen and seven-tenths pounds per square inch (14.7 p.s.i.) absolute;
(44)
"Local transit company" means a person that is a scheduled, common carrier, public passenger, land transportation service, serving regular routes within a municipality and the territory adjacent to the municipality, or within a metropolitan government created under title 7, chapters 1-3, and that generates at least sixty percent (60%) of the total passenger fare from such routes; provided, that the operation is supervised, regulated, and controlled as a street railway company, under [former] §
65-16-101
[repealed], and all legislative and statutory provisions applicable thereto;
(45)
"Local transit service" means service furnished by a local transit company;
(46)
"Motor fuel" means gasoline, diesel fuel and blended fuel;
(47)
"Motor fuel transporter" means a person who transports motor fuel by transport truck, railroad tank car, marine vessel or pipeline;
(48)
"Motor vehicle" means a vehicle that is propelled by an internal combustion engine or motor and is designed to permit the vehicle's use on highways. "Motor vehicle" does not include:
(A)
Farm machinery, including machinery designed for off-road use but capable of movement on roads at low speeds;
(B)
A vehicle operated on rails; or
(C)
Machinery designed principally for off-road use, unless such machinery is licensed to operate on Tennessee highways;
(49)
"Permissive supplier" means any person who is not subject to the general taxing jurisdiction of this state, but who:
(A)
Is a position holder in a federally qualified terminal located outside this state;
(B)
Is registered under § 4101 of the Internal Revenue Code (
26 U.S.C. § 4101
) for transactions in taxable motor fuels in the bulk transfer/terminal distribution system; and
(C)
Acquires product in such out-of-state terminals from position holders in transactions that otherwise qualify as two-party exchanges;
(50)
"Person" means a natural person, partnership, firm, association, corporation, limited liability company, court appointed representative, state, political subdivision or any other entity, group, or syndicate;
(51)
"Petroleum products" means all benzol, gasoline, burning oil, distillate, fuel oil, gas oil, kerosene, naphtha, or any other volatile substance, excluding propane, reflecting a gravity of sixteen degrees (16°) or above on the American Petroleum Institute (API) scale; with the exception of those substances with a kinematic viscosity greater than seventy (70) centistokes at one hundred twenty-two degrees Fahrenheit (122°F) and a flash point greater than one hundred fifty degrees Fahrenheit (150°F); produced from petroleum, natural gas, oil shale or coal, by whatever trade name known, or substitutes therefor, including fuel alcohol, sold or used or stored in this state, separately or in combination, for any purpose whatever, by any user or storer, whether or not manufactured in this state;
(52)
"Position holder" means the person who holds the inventory position in petroleum products in a terminal, as reflected on the records of the terminal operator. A person holds the inventory position in petroleum products when that person has a contract with the operator for the use of storage facilities and terminaling services for petroleum products at the terminal. "Position holder" includes a terminal operator who owns petroleum products in the terminal;
(53)
"Public highway" means the entire width between boundary lines of each public-maintained way in this state, including streets and alleys in cities and towns, when any part of the way is open to the public use for vehicle travel;
(54)
"Qualified terminal" means a qualified terminal as defined under the Internal Revenue Code, regulation and practices, that has been assigned a terminal control number (TCN) by the internal revenue service;
(55)
"Rack" means a mechanism for delivering motor fuel from a refinery, terminal, or bulk plant into a railroad tank car, a transport truck or another means of bulk transfer outside of the bulk transfer/terminal system;
(56)
"Refiner" means a person that owns, operates, or otherwise controls a refinery within the United States;
(57)
"Refinery" means a facility used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons, and from which motor fuel may be removed by pipeline, by marine vessel, or at a rack; provided, that "refinery" also means a facility used to produce fuel alcohol;
(58)
"Removal" means any physical transfer other than by evaporation, loss, or destruction, of petroleum products from a terminal, manufacturing plant, customs custody, pipeline, marine vessel (e.g., barge or tanker), refinery or any receptacle that stores petroleum products;
(59)
"Retail station" means any service station, garage, truck stop or other outlet dispensing motor fuel from a container equipped with a computer-type pump that measures fuel passing through it;
(60)
"Retailer" means a person that engages in the business of selling or distributing petroleum products to the end user within this state through a retail station;
(61)
"State" means the state of Tennessee;
(62)
(A)
"Supplier" means a person that meets all the following conditions:
(i)
Is subject to the general taxing jurisdiction of this state;
(ii)
Is registered under § 4101 of the Internal Revenue Code (
26 U.S.C. § 4101
) for transactions in taxable motor fuels in the bulk transfer/terminal system; and
(iii)
Is one (1) of the following:
(a)
Is the "position holder" in a terminal or refinery in this state, or is one who receives fuel or fuel alcohol from a position holder within a terminal or refinery in this state;
(b)
Imports taxable petroleum products into this state from a foreign country;
(c)
Acquires taxable petroleum products from a terminal or refinery outside this state for import into this state on such person's account;
(d)
Produces fuel alcohol or alcohol derivative substances in this state; or
(e)
Is the receiving supplier on a two-party exchange;
(B)
A terminal operator shall not be considered a "supplier" merely because the terminal operator handles taxable petroleum products consigned to it within a terminal. When used in this chapter, other than in this section, "supplier" shall be deemed to also refer to the term "permissive supplier" unless provided otherwise;
(63)
"Tank wagon" means a straight truck having multiple compartments designed or used to carry petroleum products;
(64)
"Taxable motor fuel" means gasoline, diesel fuel, kerosene, and blends thereof, and any other substance blended with any of these fuels;
(65)
"Terminal" means a storage and distribution facility for taxable motor fuel, supplied by pipeline or marine vessel, that is registered as a qualified terminal by the internal revenue service;
(66)
"Terminal bulk transfer" means a transfer of petroleum products in any of the following instances:
(A)
Marine barge movements of fuel from a refinery or terminal to a refinery or terminal;
(B)
Pipeline movements of fuel from a refinery or terminal to a refinery or terminal;
(C)
Rail movements of fuel from a refinery or terminal to a refinery or terminal;
(D)
Book transfers of product within a terminal between suppliers prior to completion of removal across the rack; or
(E)
Two-party exchanges between licensed suppliers within a terminal;
(67)
(A)
"Terminal operator" means a person that:
(i)
Owns, operates, or otherwise controls a terminal; and
(ii)
Does not use a substantial portion of the taxable motor fuel that is transferred through or stored in the terminal for its own use, i.e., for its own consumption or in the manufacture of products other than motor fuel;
(B)
A terminal operator may own the taxable motor fuel that is transferred through or stored in the terminal;
(68)
"Transmix" means the buffer or interface between two (2) different products in a pipeline shipment, or a mix of two (2) different products within a refinery or terminal that results in an off-grade mixture;
(69)
"Transport truck" means a semi-trailer combination rig or tank wagon designed or used for the purpose of transporting petroleum products over the highways;
(70)
"Transporter" means any operator of a pipeline, barge, railroad or transport truck engaged in the business of transporting petroleum products;
(71)
"Two-party exchange" means a transaction in which a petroleum product is transferred from one licensed supplier or licensed permissive supplier to another licensed supplier or licensed permissive supplier pursuant to an exchange agreement:
(A)
Which transaction includes a transfer from the person that holds the inventory position for taxable motor fuel in the terminal as reflected on the records of the terminal operator; and
(B)
The exchange transaction is completed prior to removal of the product from the terminal by the receiving exchange partner;
(72)
"Undyed diesel fuel" means diesel fuel not dyed under United States environmental protection agency rules for high sulfur diesel fuel nor dyed under internal revenue service rules for low sulphur fuel, nor pursuant to any other requirements subsequently set by the environmental protection agency or internal revenue service;
(73)
"Vehicle fuel supply tank" means any receptacle on a motor vehicle designed to supply fuel for the propulsion of the motor vehicle or from which fuel is supplied for the propulsion of the motor vehicle;
(74)
"Vessel" means a barge or other marine conveyance used to transport petroleum products in bulk; and
(75)
"Wholesaler" means a person who acquires petroleum products from a supplier, importer or from another wholesaler, for subsequent sale and distribution at wholesale by tank cars, transport trucks or vessels.
Amended by 2024 Tenn. Acts, ch. 859,s 1, eff. 1/1/2025.
Acts 1997 , ch. 316, § 1; T.C.A., §
67-3-1203
; Acts 2007 , ch. 580, § 1.
This section is set out more than once due to postponed, multiple, or conflicting amendments.