California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 2 - Use Fuel Tax › Article 2 - Imposition of Tax › Section 1318 - Vendor's Liability for the Tax

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) General. The vendor is required to
				  collect and is liable for the amount of the tax on fuel sold and delivered into
				  fuel tanks of motor vehicles, except any vehicle (a) operated by the Government
				  of the United States or any instrumentality thereof, (b) operated interstate as
				  authorized by regulation 1319, (c) operated by a user who qualifies for the
				  exemption provided in Revenue and Taxation Code section
				  8655
				  as authorized by regulation 1319, or (d) operated exclusively on private
				  property as authorized by regulation 1320. A vendor is not authorized to
				  collect the tax on fuel delivered into a storage container other than a vehicle
				  fuel tank. The amount of tax required to be collected constitutes a debt owed
				  by the vendor to the state.
Except as may otherwise be provided by the board, a vendor
					 who sells and delivers fuel into the fuel tank of a motor vehicle shall collect
					 the tax notwithstanding that the user may claim exemption from the tax in his
					 returns to the board for any nontaxable use of the fuel.
As respects a vendor's tax reporting, the tax is deemed to
					 have been collected at the time of the sale irrespective of when payment for
					 the amount of the invoice, including the tax, is received by the vendor.
					 Failure to collect the tax from the purchaser (user) does not relieve the
					 vendor from his liability to pay to the state the amount of the tax required to
					 be collected, except that bad debt losses are deductible under circumstances
					 described in section
					 8732.5
					 of the Revenue and Taxation Code and regulation 1331.6.
(b) Fuel Sold Through Keylock or Other
				  Unattended Mechanisms. When fuel is sold through a keylock mechanism or other
				  unattended mechanism it shall be presumed that the vendor delivered the fuel
				  into the fuel tank of a motor vehicle and the vendor must collect the tax from
				  the user. Farm and construction equipment are motor vehicles if they are
				  suitable for operation on the highway. This includes most equipment running on
				  rubber tires. Section
				  8652
				  of the Revenue and Taxation Code provides an exemption to farm and construction
				  equipment users, but not to vendors delivering fuel into the fuel tanks of such
				  vehicles. Customers fueling such equipment as rubber-tired backhoes, road
				  graders, or farm tractors must pay the use fuel tax to the vendor when delivery
				  is made through keylock pumps even if the equipment is hauled into the station
				  on a trailer and the ultimate use of the fuel is exempt.
The presumption that fuel sold through a keylock or other
					 unattended mechanism is delivered into the fuel tank of a motor vehicle shall
					 be rebutted and the vendor shall not collect the tax if the user certifies in
					 writing to the vendor that all fuel delivered to him through a specific
					 mechanism will be delivered into bulk containers. If a customer puts fuel into
					 the fuel tank of a motor vehicle and places fuel into drums or other bulk
					 containers at the same keylock station, the vendor should assign the customer
					 two meter registers. The customer then may furnish the vendor with a
					 certificate that all fuel delivered through a specified meter register will be
					 delivered into bulk containers. Regulation 1320 may not be applied to fuel
					 deliveries through keylock or other unattended mechanisms unless the mechanism
					 is located where the vehicle is operated exclusively off the highway.
					 Regulation 1319 is applicable to keylock deliveries only in situations
					 specified in that regulation and to the same extent as if the vendor made the
					 delivery into the fuel tank of the vehicle personally.
(c) Sales to Persons Who Paid the Annual Flat
				  Rate Tax. Any vendor who sells and delivers liquefied petroleum gas, liquid
				  natural gas or compressed natural gas into the fuel tank of a vehicle with
				  respect to which the owner or operator has paid the annual flat rate fuel tax
				  and which bears the current year's identification emblem provided for in
				  regulation 1325 is not required to collect the tax with respect to such fuel.
				  The vendor must retain for each sale or delivery claimed to be exempt records
				  showing (a) the type and quantity of fuel sold or delivered, (b) the date of
				  the sale or delivery, (c) the serial number of the identification emblem
				  affixed to the vehicle pursuant to regulation 1325 and (d) and license number
				  of the vehicle.
(d) Overcollections
				  by Vendor. If with respect to fuel tank deliveries the vendor collects from any
				  user a greater amount of tax than that which is required to be collected, he
				  shall remit the full amount collected to the board, since the user is entitled
				  to a credit or a refund from the state. If the vendor improperly collects the
				  tax on deliveries of fuel into storage facilities other than vehicle fuel
				  tanks, the amount of tax so collected shall be refunded by the vendor to the
				  user purchasing the fuel.
1. Amendment
					 filed 12-2-75; designated effective 1-1-76 (Register 75, No. 49). For prior
					 history, see Register 70, No. 51.
2. Amendment filed 2-28-80;
					 effective thirtieth day thereafter (Register 80, No.
					 9).
Note: Authority cited: Section
						9251,
						Revenue and Taxation Code. Reference: Sections
						8651,
						8652,
						8732,
						8732.5,
						8733,
						Revenue and Taxation Code.