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 3 - Diesel Fuel Tax › Article 2 - Imposition of Tax › Section 1420 - Supplier

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Returns. All
				  suppliers must prepare and file returns with the Board to report tax on diesel
				  fuel. Returns are due at the end of the month following the calendar month in
				  which the diesel fuel was removed, entered, or sold, unless the Board requires
				  that a return be filed for a different period. A terminal operator who also is
				  a position holder in diesel fuel within the terminal or is jointly and
				  severally liable for the tax is required to file both the terminal operator
				  return and the supplier return.
(b)
				  Imposition of Tax. Tax applies to each supplier as follows:
(1) Blender. A blender is required to pay the
				  tax on the removal or sale of diesel fuel blended outside the bulk
				  transfer/terminal system. The number of gallons of blended diesel fuel subject
				  to the tax is the difference between the total number of gallons of blended
				  diesel fuel removed or sold and the number of gallons of tax-paid diesel fuel
				  used to produce the blended fuel.
(2) Enterer.
(A) An enterer is required to pay the tax
				  when the enterer imports diesel fuel into the state by means outside of the
				  bulk transfer/terminal system.
(B)
				  An enterer is required to pay the tax when the enterer removes or sells diesel
				  fuel within a pipeline or terminal to an unlicensed person.
(C) An enterer is required to pay the tax
				  when the entry is by bulk transfer and the enterer is not a licensed
				  supplier.
(D) For purposes of
				  proper imposition of tax, entry occurs when fuel is brought into the state,
				  provided, however, that when entry is by bulk transfer, entry occurs as
				  follows:
(1) When fuel is received at a
				  marine terminal, entry occurs at the landslide of the flange.
(2) When fuel is removed from a vessel in
				  this state to a lighter for the purpose of lightering, entry occurs at the
				  vessel side of the flange upon the removal of fuel from a vessel in this state
				  to the lighter; provided, however, that if the lighter unloads or discharges
				  the fuel at a marine terminal, then entry occurs at the land side of the flange
				  as to the fuel received at the marine terminal. As used herein, "lightering" is
				  the use of small, shallow-draft boats in transshipment to shore of oil or other
				  fuel from a large, deep-draft vessel unable to dock at shore facilities because
				  of shallow water. The small boats are called lighters.
(3) When fuel is removed from a vessel in
				  this state to another vessel in this state, and the fuel is not unloaded or
				  discharged at a marine terminal, then entry occurs when the fuel is brought
				  into the state.
(3) Position
				  Holder.
(A) A position holder that holds an
				  inventory position in the diesel fuel as reflected on the records of the
				  terminal operator is required to pay the tax when the diesel fuel is removed
				  from the terminal rack.
(B) A
				  position holder is required to pay the tax when the position holder removes or
				  sells diesel fuel within or without the bulk transfer/terminal system to an
				  unlicensed person.
(C) For
				  reporting periods commencing on or after January 1, 2007, a position holder
				  that delivers diesel fuel to a receiving supplier under a two-party exchange
				  contract shall remain liable for the tax due on the removal of diesel fuel from
				  the terminal rack unless all Regulation 1423 requirements are
				  met.
(4) Refiner.
(A) A refiner is required to pay the tax when
				  the diesel fuel is removed at a terminal rack located at a refinery.
(B) A refiner is required to pay the tax when
				  the removal of diesel fuel is by bulk transfer (e.g., transfer by pipeline or
				  vessel) and the refiner or the owner of the diesel fuel immediately before the
				  removal is not a licensed supplier.
(C) A refiner is required to pay the tax when
				  the refiner removes or sells diesel fuel within or without the bulk
				  transfer/terminal system to an unlicensed person.
(D) For reporting periods commencing on or
				  after January 1, 2007, a refiner that delivers diesel fuel to a receiving
				  supplier under a two-party exchange contract shall remain liable for the tax
				  due on the removal of diesel fuel from the terminal rack located at a refinery
				  unless all Regulation 1423 requirements are met.
(5) Terminal Operator. A terminal operator is
				  jointly and severally liable for and may be required to pay the tax when the
				  diesel fuel is removed at the rack if both subsections (A) and (B) below apply,
				  or if subsection (C) applies:
(A) The
				  position holder with respect to the diesel fuel is a person other than the
				  terminal operator and is not a licensed supplier.
(B) The terminal operator is not a licensed
				  supplier and either (i) does not have an unexpired notification certificate
				  from the position holder as required by the Internal Revenue Service or (ii)
				  has an unexpired notification certificate from the position holder, but has
				  reason to believe or knows that any information in the certificate is
				  false.
(C) The terminal operator
				  provides any person with a bill of lading, shipping paper, or similar document
				  which falsely indicates that the undyed or unmarked diesel fuel which is
				  removed from the terminal is dyed or marked in accordance with the United
				  States Environmental Protection Agency or the Internal Revenue Service
				  requirements.
(6)
				  Throughputter. A throughputter is required to pay the tax when the
				  throughputter removes or sells diesel fuel within or without the bulk
				  transfer/terminal system to a person who is not a licensed
				  supplier.