Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-20 - Excise tax rules › Section 458-20-126 - Sales of motor vehicle fuel, special fuel, and nonpolluting fuel

Current through Register Vol. 24-14, July 15, 2024
(1)
Introduction.
This rule explains the retail sales and use taxes
			 for motor vehicle fuel, special fuel, and fuels commonly referred to as
			 liquefied natural gas, compressed natural gas, or propane. This rule also
			 provides documentation requirements to buyers and sellers of fuel for both on
			 and off highway use.
(2)
What
			 are motor vehicle fuel and special fuel, and how are they taxed?
"Motor
			 vehicle fuel" as used in this rule means gasoline or any other inflammable gas
			 or liquid the chief use of which is as fuel for the propulsion of motor
			 vehicles. (See
			 RCW
			 82.36.010.) "Special fuel" as used in this
			 rule means all combustible gases and liquids suitable for the generation of
			 power for propulsion of motor vehicles, except that it does not include motor
			 vehicle fuel as defined above. (See
			 RCW
			 82.38.020.) Diesel fuel is an example of a
			 special fuel.
Retail sales tax or use tax applies to sales and uses of motor
				vehicle fuel or special fuel, unless an exemption applies, when the taxes of
				chapter 82.36 or 82.38 RCW have not been paid or have been refunded. Generally,
				fuel taxes apply to sales of fuel for highway consumption and retail sales or
				use tax applies to fuel sold for consumption off the highways (e.g., boat fuel,
				or fuel for farm machinery or construction equipment, etc.).
(3)
What motor vehicle fuel and special
			 fuel exemptions are available?
(a)
Passenger-only ferries.
RCW
			 82.08.0255 and
			 82.12.0256 provide retail sales
			 tax and use tax exemptions for motor vehicle fuel or special fuel for use in
			 passenger-only ferry vessels. These exemptions apply only to fuel purchased by
			 public transportation benefit areas created under chapter 36.57A RCW, county
			 owned ferries, or county ferry districts created under chapter 36.54
			 RCW.
(b)
Nonprofit
			 transportation providers.
RCW
			 82.08.0255 and
			 82.12.0256 provide retail sales
			 tax and use tax exemptions for motor vehicle fuel or special fuel purchased or
			 used by private, nonprofit transportation providers certified under chapter
			 81.66 RCW, if the purchaser is entitled to fuel tax refund or exemption under
			 chapter 82.36 or 82.38 RCW.
(c)
Public transportation.
RCW
			 82.08.0255 and
			 82.12.0256 provide retail sales
			 tax and use tax exemptions for motor vehicle fuel or special fuel purchased or
			 used for the purpose of public transportation, if the purchaser is entitled to
			 a refund or an exemption under
			 RCW
			 82.36.275 or
			 82.38.080.
(d)
Special fuel used in interstate
			 commerce.
RCW
			 82.08.0255 provides a retail sales tax credit
			 or refund for sales of special fuel that is delivered in this state but later
			 transported and used outside this state by persons engaged in interstate
			 commerce. The credit or refund also applies to persons hauling their own goods
			 in interstate commerce.
Certificate.
Persons selling special fuel to
				interstate carriers must obtain a completed "Certificate of Special Fuel Sales
				to Interstate Carriers" from the purchaser to document entitlement to the
				credit or refund. The certificate may be obtained from the department of
				revenue (department) on the internet at
http://www.dor.wa.gov/
, or by contacting
				the department's taxpayer services division at:
Taxpayer Services
Department of Revenue
P.O. Box 47478
Olympia, WA 98504-7478
360-705-6705
The provisions of the certificate may be limited to a single
				sales transaction, or may apply to all sales transactions as long as the seller
				has a recurring business relationship with the buyer. A "recurring business
				relationship" means at least one sale transaction within a period of 12
				consecutive months.
(e)
Farm fuel users of diesel or aircraft fuels.
For the purpose of
			 this rule, a "farm fuel user" means either a farmer or a person who provides
			 horticultural services for farmers, such as soil preparation, crop cultivation,
			 or crop harvesting services.
(i)
										RCW
			 82.08.865 and
			 82.12.865 provided retail sales
			 tax and use tax exemptions to farm fuel users for diesel, biodiesel, and
			 aircraft fuel purchased for nonhighway use.
(ii) These exemptions also apply to a fuel
			 blend if all the component fuels of the blend would otherwise be exempt under
			 RCW
			 82.08.865 and
			 82.12.865 if the component fuels
			 were sold as separate products. The exemptions do not apply to fuel used for
			 residential heating purposes.
(iii)
			 When purchasing an eligible fuel, a farm fuel user must provide the seller with
			 a completed "Farmers' Retail Sales Tax Exemption Certificate," which may be
			 obtained from the department using the contact information described in (d) of
			 this subsection.
Sellers of eligible fuels to farm fuel users must document the
				tax exempt sales of red-dyed diesel, biodiesel, or aircraft fuel by accepting
				the certificate mentioned above and retaining it in their records for five
				years.