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 1 - Motor Vehicle Fuel Tax › Article 2 - Imposition of Tax › Section 1123 - 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 motor
				  vehicle fuel. Returns are due at the end of the month following the calendar
				  month in which the motor vehicle 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 motor vehicle fuel within the
				  terminal or is jointly and severally liable for the tax is required to file
				  both the terminal operator report 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 motor vehicle fuel blended
				  outside the bulk transfer/terminal system. The number of gallons of blended
				  motor vehicle fuel subject to the tax is the difference between the total
				  number of gallons of blended motor vehicle fuel removed or sold and the number
				  of gallons of tax-paid motor vehicle fuel used to produce the blended motor
				  vehicle fuel.
(2) Enterer.
(A) An enterer is required to pay the tax
				  when the enterer imports motor vehicle 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 motor vehicle 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 landside 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 motor vehicle fuel as reflected on the records of the terminal
				  operator is required to pay the tax when the motor vehicle fuel is removed from
				  the terminal rack.
(B) A position
				  holder is required to pay the tax when the position holder removes or sells
				  motor vehicle 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 motor vehicle fuel to a receiving supplier under a two-party
				  exchange contract shall remain liable for the tax due on the removal of motor
				  vehicle fuel from the terminal rack unless all Regulation 1125 requirements are
				  met.
(4) Refiner.
(A) A refiner is required to pay the tax when
				  the motor vehicle fuel is removed at a terminal rack located at a
				  refinery.
(B) A refiner is also
				  required to pay the tax when the removal of motor vehicle fuel is by bulk
				  transfer (e.g., transfer by pipeline or vessel) and the refiner or the owner of
				  the motor vehicle 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 motor vehicle 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 motor vehicle fuel to a
				  receiving supplier under a two-party exchange contract shall remain liable for
				  the tax due on the removal of motor vehicle fuel from the terminal rack located
				  at a refinery unless all Regulation 1125 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 motor vehicle fuel is removed at the rack if
				  both subsections (A) and (B) below apply:
(A)
				  The position holder with respect to the motor vehicle 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.
(6) Throughputter.
				  A throughputter is required to pay the tax when the throughputter removes or
				  sells motor vehicle fuel within or without the bulk transfer/terminal system to
				  a person who is not a licensed supplier.