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Exemptions

As part of a comprehensive effort to provide information and resources to aid in the identification and elimination of motor fuel tax evasion, in 2007, States were asked to provide a list of exemptions from motor fuel taxation in their State. This list was updated in 2013, with the exceptions of the States footnoted.

Please Note: This list is not meant to be used as a legal reference but just for general information. Please contact the individual States for more information. There are likely other instances in which refunds may be issued for certain uses, but this list reflects instances where fuel taxes would not be charged.

Alabama

  • All Motor Fuel exported by a Supplier who is licensed in the destination state or motor fuel that is sold by a supplier to a licensed exporter for immediate export for which the applicable destination state motor fuel excise tax has been collected. (Exempt)
  • All sales of dyed diesel fuel. (Exempt)
  • All K-1 kerosene or aviation jet fuel that is produced at a refinery in this state and is either exported from this state directly by the operator of that refinery or is sold for immediate export by the operator to a licensed exporter. (Exempt)
  • All motor fuel sold by a licensed supplier or permissive supplier to a licensed exempt entity. (Exempt)
  • Taxes paid on the gallons of motor fuel sold by a licensed distributor to a licensed exempt entity. (Refund monthly basis)
  • Taxes paid on gallons of jet fuel sold to a certificated or licensed air carrier by a licensed aviation fuel purchaser within this state and used to propel aircraft powered by jet or turbine engines operated in scheduled all-cargo operations being conducted on international flights or in international commerce. - (Refund monthly basis)
  • Taxes paid to a vendor on motor fuel purchased by the United States government or any agency thereof, any county governing body of this state, any incorporated municipal governing body of this state or any city and county boards of education of this state. (Refund quarterly basis)
  • Taxes paid to a vendor on motor fuel purchased by the Alabama Institute for the Deaf and Blind, the Department of Youth Services school district, and private and church school systems as defined in Section 16-28-1, and which offer essentially the same curriculum as offered in grades K-12 in the public schools of this state. - (Refund quarterly basis)
  • Sales of taxable motor fuel to licensed exempt entities occurring at a fixed retail pump available to the general public and is charged to a credit card issued to the licensed exempt entity, the issuer of the card, having billed the licensed exempt entity without the tax, may apply for a refund of the motor fuel on a quarterly basis. (Refund quarterly basis)
  • Tax paid purchases of jet fuel used to propel an aircraft by a licensed air carrier with a hub operation within this state. (Refund quarterly basis)

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Alaska

  • Fuel for export
  • Fuel used by Federal Government
  • Fuel used by charitable institutions
  • Diesel fuel used as heating oil
  • Diesel fuel used by state and local government highway vehicles

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Arizona

  • Fuel for export
  • Motor fuel used on a farm for farming purposes
  • Diesel fuel used by state and local government highway vehicles (they pay only .18 cents/gallon even for heavy vehicles)
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs (exempt from use-class rate they pay only .18 cents per gallon)
  • Fuel sold to the United States or agency of the United States
  • Fuel sold within an Indian reservation to an enrolled member of the tribe living on the Indian reservation and not used outside of reservation on highways
  • Fuel to operate a motor vehicle on highways if operated for the sole benefit of an Indian tribe for governmental purposes only

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Arkansas

  • Fuel for export
  • Diesel fuel used as heating oil
  • Dyed Diesel fuel is permitted for the operation of equipment attached to a motor vehicle and charged the Dyed Diesel Tax Rate of 6% per gallon
  • State and local government highway vehicles are permitted to use Dyed Diesel in licensed vehicles and charged the Dyed Diesel Tax Rate of 6% per gallon
  • Dyed Diesel fuel used in trains is exempt

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California

  • Any entry or removal from a terminal or refinery transferred in bulk to a refinery or terminal if the persons involved (including the terminal operator) are licensed suppliers.
  • Exports.
  • Fuel sold by credit card to a consulate officer or employee.
  • Diesel fuel sold to a farm for farming purposes.
  • Diesel fuel sold to exempt bus operators.
  • Diesel fuel sold to a train operator.
  • Sales of dyed diesel fuel.
  • Diesel fuel used sold to the United States and it agencies and instrumentalities.
  • Motor vehicle fuel sold to the United States armed forces for use in ships or aircraft, or for use outside this state.
  • Gasoline blendstocks sold to a licensed industrial user removed from a pipeline or vessel.
  • Gasoline blendstocks sold by a licensed supplier to a purchaser who has provided an exemption certificate under Revenue and Taxation Code section 7402.

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Colorado

  • Fuel reported, then exported by Colorado licensed distributors;
  • Fuel sold to the United States government; and
  • Fuel sold to state and local governments, who have been issued a Colorado fuel exemption certificate, used exclusively by the government entity in performing its governmental functions.

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Connecticut

  • Motor fuel sold to the United States, this state or a municipality of this state
  • Motor fuel sold to a person licensed as a distributor in this state
  • Motor fuel sold for export
  • Motor fuel sold to a farmer with the prescribed affidavit
  • Motor fuel sold exclusively for heating purposes
  • Motor fuel sold exclusively to furnish gas, water, steam or electricity, if delivered to consumers through mains, lines or pipes
  • Motor fuel sold exclusively for aviation purposes
  • Diesel fuel sold exclusively for use in portable power system generators that are larger than 150 kilowatts

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Delaware

  • Fuel for export.
  • Sales made to other licensed Delaware motor fuel distributors and special fuel suppliers within the state.
  • Kerosene, jet fuel, dyed diesel, propane, CNG, LNG (as long as they are used in cooking, heating, or off road applications).
  • Motor fuel and special fuel used in Federal, State, and local government vehicles as well as volunteer fire company vehicles and ambulances. An exemption registration must first be issued.
  • Gasoline used in off road applications (airplanes, boats, construction or landscaping equipment) is taxable but may qualify for a refund with proper documentation.
  • Gasoline used in taxicabs is taxable but may qualify for a refund with proper documentation.

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District of Columbia1

  • Fuel for export
  • Kerosene
  • Diesel fuel used as heating oil
  • Motor fuel used on a farm for farming purposes (Gasoline only & 100 gallon quantities)
  • Diesel fuel used by state and local government highway vehicles
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs
  • Diesel fuel used in trains
  • Diesel fuel used for other non-highway purposes

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Florida

Motor fuel/Diesel Fuel is exempt from tax, when the fuel is:

  • Sold by terminal suppliers or wholesalers to the United States government, its departments or agencies, in quantities of 500 gallons or more, for exclusive use by the U.S. government, its departments or agencies.
  • In the supply tank of a vehicle entering this state where the motor fuel is used to propel the vehicle.
  • Contained in the supply tank of a new and untitled vehicle, if the vehicle manufacturer supplies the fuel.
  • Exported from a point in Florida to a point outside Florida (assuming the exporter is licensed and has the proper documentation). Aviation fuel is exempt from tax, when the fuel is used:
  • Sold by terminal suppliers or wholesalers to the United States Government, its departments or agencies, for use in a government aircraft. Terminal suppliers or wholesalers/importers can take an ultimate vendor credit on their monthly returns or apply for a refund if they sell tax-paid motor fuel to the U.S. government. Note - Fixed base operators will not collect fuel tax on sales of aviation fuel to the U.S. government, its departments, or its agencies for use in a governmental aircraft. Instead, fixed base operators may apply for a refund from the Department of the taxes paid to their supplier.
  • Removed from a foreign trade zone/Customs bonded storage facility and placed into aircraft that is used in international flights.
  • Sold by terminal suppliers or wholesalers to the United States Government, its departments or agencies, in quantities of 500 gallons or more, for exclusive use by the U.S. government, its departments or agencies.
  • Note: This exemption does not apply to aviation fuel sold to post exchanges or other outlets on the base if the fuel is for resale. These entities may be privately owned and sell fuel for purposes unrelated to government business.
  • Exported from a point in Florida to a point outside Florida (assuming the exporter is licensed and has the proper documentation).
  • Sold to Farmers - Terminal suppliers and wholesalers who sell aviation jet fuel or undyed kerosene to farmers are exempt from the tax imposed under this section if:
    • The fuel is used in farm equipment on a farm; and
    • The farmer provides written documentation to the supplier identifying the number of gallons purchased that will be used exclusively on a farm.
  • Sold to Qualified Air Carriers Offering Transcontinental Jet Service - Any licensed wholesaler or terminal supplier that delivers aviation fuel to an air carrier offering transcontinental jet service and that, after January 1, 1996, increases their Florida workforce by more than 1000 percent and by 250 or more full-time equivalent employee positions, may receive a credit or refund as the ultimate vendor of the aviation fuel for the 6.9 cents excise tax previously paid, provided that the air carrier has no facility for fueling highway vehicles from the tank in which the aviation fuel is stored.
  • Sold for Home Heating or Cooking (Kerosene)

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Georgia

  • Bulk sales to a duly licensed distributor.
  • Sales of motor fuel for export from the State of Georgia when exempted by any provisions of the Constitutions of the United States or this state.
  • Sales of motor fuel to a licensed distributor for export from Georgia.
  • Sales of motor fuel to the United States for the exclusive use of the United States when the motor fuel is purchased and paid for directly by the United States.
  • Sales of aviation gasoline to a duly licensed aviation gasoline dealer, except for 1 cent per gallon of the $0.075 Excise Tax
  • Bulk sales of compressed petroleum gas or special fuel to a duly licensed consumer distributor
  • Sales of compressed petroleum gas or special fuel to a consumer who has no highway use of the fuel at the time of the sale and does not resell the fuel. Consumers of compressed petroleum gas or special fuel who have both highway and nonhighway use of the fuel and resellers of such fuel must be licensed as distributors in order for sales of the fuel to be tax exempt. Each type of motor fuel is to be considered separately under this exemption.
  • Sales of fuel oils, compressed petroleum gas, or special fuel directly to an ultimate consumer to be used for heating purposes only. The delivery of fuel oils, compressed petroleum gas, or special fuel directly to an ultimate consumer to be used for heating purposes only shall be made directly into the storage receptacle of the heating unit of the consumer by the licensed distributor. To qualify for this exemption, sales must be delivered into storage receptacles that are not equipped with any secondary withdrawal outlets for the motor fuel.
  • Sales of dyed diesel to a consumer for other than highway use.
  • During the period of July 1, 2012, through June 30, 2015, sales of motor fuel, as defined in paragraph (9) of Code Section 48-9-2, for public mass transit vehicles which are owned by public transportation systems which receive or are eligible to receive funds pursuant to 49 U.S.C. Sections 5307 and 5311 for which passenger fares are routinely charged and which vehicles are used exclusively for revenue generating purposes which motor fuel sales occur at bulk purchase facilities approved by the department. The term "vehicle" or "vehicles" means buses, vans, minibuses, or other vehicles which have the capacity to transport seven or more passengers.
  • During the period of July 1, 2012, through June 30, 2015, sales of motor fuel, as defined in paragraph (9) of Code Section 48-9-2, for vehicles operated by a public campus transportation system, provided that such system has a policy which provides for free transfer of passengers from the public transportation system operated by the jurisdiction in which the campus is located; makes the general public aware of such free transfer policy; and receives no state or federal funding to assist in the operation of such public campus transportation system and which motor fuel sales occur at bulk purchase facilities approved by the department. The term "vehicle" or "vehicles" means buses, vans, minibuses, or other vehicles which have the capacity to transport seven or more passengers.
  • Fuel oils, compressed petroleum gas, or special fuel used by a duly licensed distributor for nonhighway purposes.
  • For the period of time beginning July 1, 2013, and ending June 30, 2015, sales of motor fuel to Georgia public school systems for the exclusive use of the school system in operating school buses when the motor fuel is purchased and paid for by the school system directly.

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Hawaii1

  • Fuel for export
  • Fuel sold to the United States government or any department thereof for official use of the government

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Idaho

  • Dyed Diesel fuel used as heating oil
  • Dyed Diesel fuel used by state and local government highway vehicles
  • Dyed Diesel fuel used in trains

Below are not exempt, but are eligible for a refund:

  • Fuel for export
  • Diesel fuel used for the operation of equipment attached to a motor vehicle
  • Motor fuel used on a farm for farming purposes (Gasoline only & 100 gallon quantities)
  • Gasoline used in commercial fishing boats (100 gallon quantities)
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs
  • Diesel fuel used for other non-highway purposes

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Illinois

  • Fuel for export (if the company holds a valid motor fuel license in Illinois)
  • Kerosene (if dyed)
  • Diesel fuel used as heating oil (if dyed)
  • Motor fuel used on a farm for farming purposes (if dyed diesel)
  • Diesel fuel used in trains (if dyed)
  • Diesel fuel used for other non-highway purposes (if dyed)
  • 1-K if used for non-highway purposes
  • Gasoline used for non-highway purposes may be considered for a motor fuel refund (with supporting documentation)
  • Clear Diesel fuel (used for non-highway purposes, addressed in informational bulletin FY 2001-29) may also be considered for a motor fuel refund

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Indiana1

  • Fuel for export
  • Diesel fuel used as heating oil
  • Diesel fuel used for the operation of equipment attached to a motor vehicle
  • Motor fuel used on a farm for farming purposes (Gasoline only & 100 gallon quantities)
  • Diesel fuel used in trains
  • Diesel fuel used for other non-highway purposes

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Iowa

  • Fuel for export
  • Kerosene

Fuel is taxed then if applicable a refund can be requested if a $60.00 minimum is met

  • Clear Diesel fuel used as heating oil (refund)
  • Clear Diesel fuel used for the operation of equipment attached to a motor vehicle (refund)
  • Motor fuel used on a farm for farming purposes (refund)
  • Clear Diesel fuel used by state and local government highway vehicles (refund)
  • Gasoline used in commercial fishing boats (refund)
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs (refund)
  • Clear Diesel fuel used in trains (refund)
  • Clear Diesel fuel used for other non-highway purposes (refund)
  • Motor fuel sold to the United States government (refund)
  • Motor fuel sold to and used by an Iowa urban or regional transit system (refund)
  • Racing fuel (refund)
  • Clear special fuel used in watercraft (refund)
  • Fuel used for producing denatured alcohol (refund)
  • Fuel used in extraction and processing of natural deposits (refund)

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Kansas

  • Fuel for export
  • Motor fuel sold to the United States of America and such of its agencies
  • Kerosene (not blended)
  • Sale of kerosene used as a fuel only to power antique steam motor vehicles first manufactured prior to 1940.
  • Dyed diesel
  • Motor fuel used in state-owned school buses not required by state law to be tagged and in state-owned administration and service vehicles and are used in the pupil transportation programs can use dyed diesel. (School buses that are required to be tagged must burn clear fuel and use the refund process)
  • Diesel fuel used in trains (if dyed, otherwise refund)
  • Motor fuel used for non-highway purposes (may qualify for fuel tax refund)

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Kentucky

  • Fuel for export
  • Diesel fuel used as heating oil
  • Motor fuel used on a farm for farming purposes
  • Diesel fuel used in trains
  • Diesel fuel used for other non-highway purposes
  • Diesel fuel used by state and local government nonhighway purposes
  • Diesel fuel used as heating oil, farm purposes, and other non-highway purposes is taxable unless the purchaser is in compliance with statutes allowing the tax-exempt purchase

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Louisiana

  • Fuel for export
  • Bulk gasoline sales to US government
  • Gasoline sold to US armed forces for propelling ships or for aviation purposes
  • Aviation fuel used for propelling aircraft
  • Dyed diesel is exempt if used for off-road purposes
  • Gasoline or undyed diesel fuel exported to another state, as long as tax of the destination state remitted to supplier
  • Gasoline or undyed diesel fuel exported to a foreign country

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Maine

  • Fuel for export
  • Kerosene*
  • Diesel fuel used as heating oil
  • Diesel fuel used for the operation of equipment attached to a motor vehicle**
  • Motor fuel used on a farm for farming purposes
    (Gasoline only & 100 gallon quantities)**
  • Diesel fuel used by state and local government highway vehicles
  • Gasoline used in commercial fishing boats (100 gallon quantities)
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs
  • Diesel fuel used for other non-highway purposes**
  • Sales to Federal Government, Jet Fuel for International Flights, Fuel Used in Power Generation

*Prepackaged for home use
**Gasoline must be used for a commercial purpose. Distillates are exempt if used off-highway

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Maryland

  • Fuel for export (Gasoline & distillate with proper license only)
  • Fuel used as heating oil
  • Fuel used for the operation of equipment attached to a motor vehicle
  • Motor fuel used on a farm for farming purposes (for special fuels, exemption certificate and user license is required). Gasoline use on farm is refundable.
  • Gasoline used in commercial fishing boats (100 gallon quantities) (Must apply for refund)
  • Diesel fuel used in trains (Dyed only)
  • Diesel fuel used for other non-highway purposes (Dyed only)

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Massachusetts1

  • Kerosene (business use still subject in some cases)
  • Motor fuel used on a farm for farming purposes (Gasoline only & 100 gallon quantities) (refund)
  • Gasoline used in commercial fishing boats (100 gallon quantities) (refund)
  • Diesel fuel used for other non-highway purposes (refund)
  • Fuel sold to and used by the Federal Government
  • Fuel sold to and used by the Regional Transit Authorities
  • Fuel sold to and used by the Water Resources Authority, the Port Authority, and the MBTA
  • Gasoline and special fuels used in the MA Turnpike (refund)
  • Aircraft Fuel used in an untaxed manner (refund)
  • Gasoline used in watercraft (refund)

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Michigan

  • Fuel for export
  • Kerosene (if dyed)
  • Gasoline and Diesel fuel used on a farm for farming purposes
  • Gasoline and Diesel fuel used by state and local government highway vehicles
  • Gasoline and Diesel fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs (as well as for nonprofit, private, parochial or denominational school and college or university buses)
  • Gasoline and Diesel fuel used for other non-highway purposes (refund, excluding fuel used in a snowmobile, off-road vehicle, or vessel as defined in the natural resources and environmental protection act)
  • Gasoline and Diesel fuel sold directly to the federal or state government
  • Gasoline removed from a pipeline or marine vessel by a taxable fuel registrant with the Internal Revenue Service as a fuel feedstock user

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Minnesota

  • Fuel for export
  • Diesel fuel used as heating oil
  • Diesel fuel used for the operation of equipment attached to a motor vehicle
  • Motor fuel used on a farm for farming purposes (Gasoline only & 100 gallon quantities)
  • Gasoline used in commercial fishing boats (100 gallon quantities)
  • Diesel fuel used in trains
  • Diesel fuel used for other non-highway purposes
  • Motor fuels used in qualifying mass transit systems
  • Motor Fuels used by providers of transportation to recipients of medical assistance home and community-based services waivers enrolled in day programs, including adult day care, family adult day care, day treatment and habilitation, prevocational services, and structured day services
  • Motor fuels used by qualifying ambulance services
  • Motor fuel used by providers of medical or dental services by a federally qualified health center, as defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit;
  • Motor fuel by a licensed distributor to be delivered to a terminal for use in blending
  • Diesel fuel used by clearly marked emergency vehicles that are owned by city, county or municipality

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Mississippi1

  • Fuel for export
  • Special Fuel used in boilers etc. & Marine Use

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Missouri

  • Motor Fuel for export (exempt if destination tax paid to supplier, otherwise refund)
  • Diesel fuel used as heating oil (if dyed, otherwise refund)
  • Motor fuel used for the operation of equipment attached to a motor vehicle (refund if not dyed)
  • Motor fuel used on a farm for agricultural purpose (Vendor may sell gasoline in 100 gallon or gallon quantities without tax, vendor applies for refund) or (if dyed, otherwise refund)
  • Motor fuel sold to United States government (exempt or refund)
  • Diesel fuel used in trains (if dyed, otherwise refund)
  • Dyed diesel fuel or dyed kerosene for exempt purpose (exempt)
  • Motor fuel used for other non-highway purposes (if dyed, otherwise refund)
  • Kerosene (jet fuel) used as fuel in aircraft (exempt)
  • Undyed kerosene sold through barricaded pumps or from non-barricaded pumps in quantities of 21 gallons or less (exempt)
  • Undyed kerosene used for non-highway purposes purchased in quantities greater than 21 gallons from non-barricaded pumps (refund)
  • Motor fuel used solely and exclusively as fuel to propel motor vehicles on the public roads and highways of this state when leased or owned and when being operated by a federally recognized Indian tribe (refund)
  • Motor fuel which was purchased tax-paid and which was lost or destroyed as a direct result of a sudden and unexpected casualty or which had been accidentally contaminated so as to be unsalable as highway fuel (refund)
  • Motor fuel sold to be used to operate public mass transportation service by a city transit authority, a city utilities board, or an interstate transportation authority (exempt or refund)

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Montana

  • Fuel for export - Person exporting must be licensed as a distributor under the exporter option. Required is a minimum bond of $25,000 and monthly tax reporting.
  • Diesel fuel used as heating oil Person can use dyed fuel with no payment of tax or buy clear fuel with taxes included and apply for a refund of the state tax. Refund form for heating fuel is on MDT's website at: http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/mf-27h_heating_oil.pdf
  • Diesel fuel used for the operation of equipment attached to a motor vehicle - Person can apply for a refund of the state taxes paid on fuel. Refund form for PTO is on MDT's website at: http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/pto_refund_form.pdf
  • Motor fuel used on a farm for farming purposes- A person who uses gasoline off the public roads and highways or for any commercial use other than operating vehicles upon any of the public highways or streets in Montana may apply for a refund of the state tax paid. A form for an off-road refund is on MDT's website at; http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/offroad_refund_form.pdf. This is for both gasoline and diesel fuel. Specifically for farmers/ranchers, a person whose use qualifies as agricultural use may apply for a refund of the state tax paid on gasoline purchased in bulk quantities. (no minimum quantity). Purchases through a keylock or cardtrol system also qualify as bulk purchases for the purpose of the refund for agriculture. The form to apply for an agricultural refund is on MDT's website at: http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/ag_refund_form.pdf. This is for both gasoline and diesel fuel.
  • Diesel fuel used by state and local government highway vehicles Governmental entities may use dyed diesel in Montana or apply for a refund of the state tax paid on fuel they used in the government owned vehicles. A form for government use is on MDT's website at: http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/mf-27g_govt.pdf
  • Gasoline used in commercial fishing boats There is nothing in Montana's law that is specific to commercial fishing boats. A person who uses gasoline off the public roads and highways or for any commercial use other than operating vehicles upon any of the public highways or streets in Montana may apply for a refund of the state tax paid. A form for an off-road refund is on MDT's website at; http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/offroad_refund_form.pdf.
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs Governmental entities may use dyed diesel in Montana or apply for a refund of the state tax paid on fuel they used in the government owned vehicles. A form for government use is on MDT's website at: http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/mf-27g_govt.pdf
  • Diesel fuel used for other non-highway purposes - A person who uses diesel fuel off the public roads and highways or for any commercial use other than operating vehicles upon any of the public highways or streets in Montana may apply for a refund of the state tax paid. A form for an off-road refund is on MDT's website at; http://www.mdt.mt.gov/other/fueltax/external/fueltax_forms/pdf/offroad_refund_form.pdf. (This form for both gasoline and diesel).

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Nebraska

  • Fuel for export
  • Kerosene (unless blended with clear diesel)
  • Diesel fuel used as heating oil (exempt if dyed, subject to refund if clear diesel)
  • Motor vehicle fuels used on a farm for farming purposes (subject to refund if used in "unlicensed" vehicle or equipment)
  • Gasoline used in commercial fishing boats (via refund)
  • Diesel fuel used in trains (dyed diesel, clear diesel subject to refund)
  • Diesel fuel used for other non-highway purposes (exempt if dyed, subject to refund if clear is placed into "unlicensed" vehicle or equipment)
  • Federal agencies
  • Clear diesel of 50 gals or less placed directly into reefer unit or PTO unit (exempt certificate required for gallons sold for reefer or PTO unit)

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Nevada

  • Fuel for export
  • Kerosene (clear kerosene for home heating only)
  • Diesel fuel used as heating oil
  • Diesel fuel used for the operation of equipment attached to a motor vehicle (NOTE: Taxpayer must pay tax upfront and request a refund for the eligible exempt portion of fuel used in auxiliary equipment)
  • Diesel fuel used by state and local government highway vehicles
  • Motor vehicle fuel-sales made to active duty military
  • Sales made to any person to be used to propel a motor vehicle which is dedicated for exclusive use as part of a system which:
    • Operates motor vehicles for public transportation in an urban area;
    • Transports persons who pay the established fare; and
    • Uses public money to operate the system or acquire new equipment
    • Diesel fuel used in trains
  • Diesel fuel and motor vehicle fule used for other non-highway purposes (NOTE: Taxpayer must pay tax upfront and request a refund for the eligible exempt fuel used for non-highway purposes)
  • Motor fuel used on a farm for farming purposes (NOTE: Farmer and ranchers must pay all excise taxes and then file a claim for a refund based upon 80% of fuel purchased)
  • Sales made to Indian Tribes with an Interlocal agreement on file, receive exempt fuel. However, they must remit taxes on all sales made to non-tribal members

NOTE: MC-45 is the refund form (for fuel used in auxiliary equipment, power take off, or an off-road manner)

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New Hampshire

  • Fuel for export (exempt) Note: Must be exported by a licensed distributor. If an unlicensed entity or person exports fuel the tax has already been collected at the Distributor level.
  • Diesel fuel used as heating oil (refund if not dyed)
  • Diesel fuel or gasoline used for the operation of equipment attached to a motor vehicle (refund)
  • Motor fuel used on a farm for farming purposes (Gasoline and Diesel through a refund application)
  • Diesel fuel used by state and local government vehicles (exempt if purchased from a licensed distributor or through a refund if tax was already collected on the product)
  • Gasoline used in commercial fishing boats (refund)
  • Motor fuel used in state-owned and or municipal or school district owed school buses and in state-owned administration and service vehicles used in the pupil transportation programs (exempt or refund)
  • Diesel fuel and gasoline used for other non-highway purposes (refund)

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New Jersey

  • Motor fuel for export
  • Motor fuel purchased by a governmental entity or any instrumentality thereof
  • Motor fuel used for heating and lighting
  • Motor fuel used in farm machinery and farm tractors not used on-road
  • Motor fuel used in commercial fishing boats
  • Motor fuel used in trains
  • Motor fuel used in ambulances and volunteer first-aid/rescue squads
  • Motor fuel used for any non-highway purpose
  • Motor fuel used on private property
  • Motor fuel used in aircraft
  • Motor fuel used for cleaning
  • Motor fuel used in fire engines or a fire-fighting apparatus
  • Motor fuel used in busses whose routes are either under NJ Transit contract, Regular Routes, or commuter routes.

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New Mexico

  • Gasoline & Special Fuel for export
  • Gasoline & Special Fuel sold for exclusive use of United States government
  • Gasoline & Special Fuel sold for exclusive use of Indian government
  • Gasoline sold by a Registered Indian Tribal Distributor
  • Kerosene for aircraft
  • Special Fuel used as heating oil
  • Special Fuel used for the operation of equipment attached to a motor vehicle (refund)
  • Special Fuel used by a bus company contracted to transport students
  • Special Fuel used in trains
  • Special fuel sold to the state of New Mexico or any political subdivision
  • Special Fuel dyed
  • B99 or B100 sold and delivered to a New Mexico terminal for blending

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New York

  • Non-highway diesel motor fuel sold for residential heating/cooling
  • Non-highway diesel motor fuel sold for use in manufacturing
  • Non-highway diesel motor fuel sold to exempt organizations
  • Non-highway diesel motor fuel sold for use in farming
  • Kero-jet fuel sold to airlines and for self-use by airlines in aircrafts
  • Water-white kerosene sold to consumers or filling stations
  • Inter-distributor sales of highway diesel motor fuel above the terminal rack
  • Non-highway diesel motor fuel or untaxed qualified biodiesel to persons registered as a distributor of diesel motor fuel
  • Non-highway kerosene for nonresidential heating or production for sale
  • Fuel sold in New York State for immediate export
  • Fuel sold to New York State and its municipalities or to the US government
  • Motor fuel sold to exempt diplomats and missions
  • E85 sold to filling stations
  • Sales of compressed natural gas or liquefied natural gas

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North Carolina

EXEMPTIONS (General Statutes - 105-449.88)

  • Motor Fuel for export
  • Motor Fuel sold to the federal government for its use
  • Motor Fuel sold to the State for its use
  • Motor Fuel sold to a local board of education for use in the public school system
  • Kerosene sold to an airport
  • Motor Fuel sold to a charter school for its use
  • Motor Fuel sold to a community college for use for community college purposes
  • Motor Fuel sold to a county or a municipal corporation for its use
  • Biodiesel that is produced by an individual for use in that individual's private passenger vehicle

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North Dakota

  • Motor fuel sold to the US Government
  • All exported motor fuels are exempt
  • Motor vehicle fuel refunds for agricultural use (refund of $.16 of total $.23 tax paid)
  • Motor vehicle fuel refunds for industrial use (refund of $.22 of total $.23 tax paid)
  • Motor vehicle fuel refunds for local government use (total refund)
  • Special fuel refund for use in a refrigeration unit (refund of $.19 of total $.23 tax paid)
  • All motor fuels used for emergency medical services (total refund)
  • All motor fuels used by Federal or Tribal Agencies (total refund)

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Ohio

  • Fuel for export
  • Sales to a licensed Ohio Motor Fuel Dealer.
  • Kerosene (only if non-highway use)
  • Dyed diesel fuel used for off-road purposes (equipment, farm use, or other non-highway purposes).
  • Operation of aircraft.
  • Sales to the U.S. Government.

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Oklahoma

  • Fuel for export (exempt if they are licensed exporters or if exported by a supplier who is licensed in the destination state)
  • Motor fuel exported out of a bulk plant in this state in a tank wagon if the destination of that vehicle does not exceed twenty-five (25) miles from the border of this state in which the tax has been previously paid or accrued.
  • K-1 kerosene sold at retail through dispensers which have been designed and constructed to prevent delivery directly into a vehicle supply tank, and K-1 kerosene sold at retail through non-barricaded dispensers in quantities of not more than twenty-one (21) gallons for use other than highway purposes.
  • Motor fuel sold to the United States or any agency or instrumentality thereof
  • Diesel fuel used as heating oil
  • Diesel fuel used for the operation of equipment attached to a motor vehicle or while the vehicle is parked off the highways of this state.
  • Motor fuel used on a farm for farming purposes (exempt except as to $0.0208 per gallon of gasoline)
  • Motor fuel used in district-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs
  • Motor fuel used solely and exclusively to propel motor vehicles that are owned or leased by a city, county, town, a volunteer fire department with a state certification and r rating, rural electric cooperatives, rural water and sewer districts, rural irrigation districts organized under the Oklahoma Irrigation District Act, conservancy districts and m master conservancy districts organized under the Conservancy Act of Oklahoma, rural ambulance service districts or federally recognized Indian Tribes.
  • Gasoline, diesel fuel and kerosene sold for use as fuel to generate power in aircraft engines, whether in aircraft or for training or testing or research purposes of aircraft engines (exempt except for $0.0008 per gallon)
  • Motor fuel sold within an Indian reservation or within Indian country by a federally recognized tribe to a member of that tribe and used in motor vehicles owned by that member of the tribe. This exemption does not apply to sales within an Indian reservation or within Indian county by a federally recognized Indian tribe to non-Indian consumers or to Indian consumers who are not members of the tribe selling the motor fuel.
  • Diesel fuel used in railroad locomotives or any other motorized flanged-wheel rail equipment.
  • Diesel fuel used for other non-highway purposes
  • Motor fuel acquired by a consumer out of state and carried into this state, retained within and consumed from the same vehicle fuel supply tank within which it was imported.
  • Motor fuel which was lost or destroyed as a direct result of a sudden and unexpected casualty.
  • Taxable diesel which has been accidentally contaminated by dye so as to be un-saleable as highway fuel as proved by proper documentation.
  • Dyed diesel fuel
  • Motor fuel sold to the Oklahoma Space Industry Development Authority or any spaceport user as defined in the Oklahoma Space Industry Development Act.
  • Biofuels or biodiesel produced by an individual with crops grown on properly owned by the same individual and used in a vehicle owned by the same individual on the public roads and highways of this state.

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Oregon

  • Kerosene
  • Diesel fuel used as heating oil
  • Diesel fuel used by state and local government highway vehicles
  • Fuel for export (licensed dealers only)

  • Gasoline used in commercial boating operations

  • Diesel used for non-highway purposes

  • Diesel used by a school district, education service district, or their contractors for vehicles being used to transport students

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Pennsylvania

  • Delivered to the Federal Government on presentation of an authorized Federal Government exemption certificate or other evidence satisfactory to the department.
  • Used or sold and delivered which are not within the taxing power of the Commonwealth under the Commerce Clause of the Constitution of the United States.
  • Used as fuel in aircraft or aircraft engines, except for the tax imposed under subsection (c) of Pennsylvania Code, Title 75, Chapter 90, Section 9004.
  • Delivered to this Commonwealth, a political subdivision, a volunteer fire company, a volunteer ambulance service, a volunteer rescue squad, a second class county port authority or a nonpublic school not operated for profit on presentation of evidence satisfactory to the department.

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Rhode Island1

  • Fuel for export
  • Kerosene (if sold to an airport)
  • Diesel fuel used by state and local government highway vehicles
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs

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South Carolina

  • Fuel for export
  • Kerosene
  • Diesel fuel used as heating oil
  • Motor fuel used in farming equipment
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs
  • Diesel fuel used in trains
  • Diesel fuel used for other non-highway purposes
  • Motor fuel sold to the United States Government

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South Dakota

  • Kerosene (if dyed)
  • Diesel fuel used as heating oil (if dyed)
  • Motor fuel used on a farm for farming purposes (Gasoline only)
  • Sales of fuel to the federal government
  • Sales of fuel to licensed Indian schools
  • Fuel used as reefer fuel
  • Fuel taxed at retail stations on Native American reservations is refunded to the tribes based on tribal consumption calculations

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Tennessee

  • Fuel for export
  • Kerosene, unless used in a motor vehicle
  • Diesel fuel used as heating oil
  • Diesel fuel or gasoline used in auxiliary engines or power take-off units in certain specified motor vehicles
  • Motor fuel used on a farm for farming purposes (Gasoline only & 50 gallon quantities)
  • Diesel fuel used by state, federal, and local government highway vehicles
  • Motor fuel used in state-owned school buses and in state-owned administration and service vehicles used in the pupil transportation programs
  • Diesel fuel used in trains
  • Diesel fuel used for other non-highway purposes

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Texas

  • Diesel fuel, gasoline, LG, CNG, or LNG sold to the federal government for its exclusive use.
  • Diesel fuel, gasoline, LG, CNG, or LNG sold to a Texas public school district for its exclusive use.
  • Diesel fuel, gasoline, LG, CNG, or LNG sold to a commercial transportation company or a metropolitan rapid transit authority and used exclusively to provide public school transportation.
  • Gasoline or diesel fuel exported by either a licensed supplier or a licensed exporter from this state provided that the bill of lading indicates the destination state and the supplier collects the destination state's tax and if not, Texas tax is collected.
  • Gasoline or diesel fuel moved by truck or railcar between IRS-registered terminals by licensed suppliers or licensed permissive suppliers.
  • Diesel fuel, gasoline, LG, CNG, or LNG delivered or sold into a storage facility of a licensed aviation fuel dealer and delivered solely into the fuel supply tanks of aircraft or aircraft servicing equipment.
  • Gasoline or diesel fuel exported to a foreign country if the bill of lading indicates the foreign destination and the fuel is exported to the foreign country.
  • Diesel fuel, gasoline, LG, CNG, or LNG sold to a Texas volunteer fire department for its exclusive use.
  • LG, CNG, or LNG sold to a Texas county for its exclusive use.
  • Diesel fuel, gasoline, LG, CNG, or LNG sold to a Texas non-profit telephone or electric cooperative organized in Texas Utilities Code Chapters 161 and 162.
  • Dyed diesel fuel sold or delivered by a licensed supplier to a person licensed to purchase dyed diesel fuel.
  • The volume of water, fuel ethanol, renewable diesel, or biodiesel blended with diesel fuel when identified on the retail pump, storage tank, and sales invoice.
  • Dyed diesel fuel, CNG, or LNG delivered by a license holder into the fuel supply tanks of off-highway equipment or other stationary equipment. LG delivered into bulk storage tanks and into fuel supply tanks of off-highway or stationary equipment.
  • Dyed kerosene delivered by a license supplier, permissive supplier, distributor, or importer into a storage facility at a retail business and used exclusively for heating, cooking, lighting, or similar non-highway use.

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Utah

Entity based exemptions (who the user is)

  • Foreign diplomats authorized as exempt by the U.S. State Department;
  • Federal government agencies;
  • Utah state and Utah local government agencies;
  • Ute Indian tribe - for fuel sold on reservation to tribal members; and
  • Navajo Indian nation - is not completely exempt but the Utah tax is reduced by the amount of any Navajo nation fuel tax imposed on the same fuel

Use based exemptions (how it is used)

  • Agricultural use of fuel;
  • Fuel exported from Utah;
  • Special fuels not used in motor vehicles on public roads - such as fuels used buildings, generators, ATVs, construction and mining equipment, etc.;
  • Special fuels used in motor vehicles on public roads but to power auxiliary equipment - such as PTOs, reefers, hydraulics, etc.; and
  • Large volumes of lost fuel - such as in a fire, flood, accident, crime, or bankruptcy

Product based exemptions (what the fuel is)

  • Dyed diesel - dyed diesel is not intended for use on public roads except in very limited cases allowed by federal law such as in government owned school buses, use of dyed diesel on public roads by a non-qualified vehicle is subject to both the special fuel tax and additional penalties;
  • Natural gas - both liquefied and compressed natural gas are not completely exempt but have a reduced tax rate of 8.5c per gasoline gallon equivalent;
  • Propane;
  • Electricity; and
  • Fuel manufactured from Utah solid hydrocarbons

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Vermont

  • Fuel for export
  • Kerosene
  • Diesel Fuel used as heating fuel
  • Agricultural purposes not used on the highway, vehicles registered as a farm truck
  • State, municipal, school districts, fire districts and other governmentally owned vehicle for official purposes
  • Diesel fuel used by any vehicle off the highways of the state
  • Non-profit public transit

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Virginia

  • Motor fuel sold and delivered to a governmental entity for the exclusive use by the governmental entity. This exemption shall not apply with respect to fuel sold or delivered to any person operating under contract with the governmental entity;
  • Motor fuel sold and delivered to a nonprofit charitable organization which is exempt from taxation under § 501(c)(3) of the Internal Revenue Code and which is organized and operated exclusively for the purpose of providing charitable, long-distance, advanced life-support, air ambulance services for low-income medical patients in the Commonwealth, for the exclusive use of such organization in the operation of an aircraft;
  • Bonded aviation jet fuel;
  • Dyed diesel fuel, except as provided in subdivision A 1 of § 58.1-2225 of the Virginia Code;
  • Motor fuel removed, by transport truck or another means of transfer outside the terminal transfer system, from a terminal for export, if the supplier of the motor fuel collects tax on the fuel at the rate of the motor fuel's destination state; or
  • Heating oil, as defined in § 58.1-2201 of the Virginia Code

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Washington

  • Fuel for export can be exempt or refundable. Licensed exporters are exempt, unlicensed companies can file for refund.
  • Most dyed diesel fuel is tax exempt. Exceptions are primarily state / local government entities that are exempt federal taxes (allowed to use dyed diesel) but are not exempt state fuel tax. (Ex. school buses)
  • Heating oil is exempt. Dyed diesel is the most common used product. Clear diesel users must file for a refund of fuel taxes
  • Diesel fuel used for the operation of equipment attached to a motor vehicle (PTO Refundable)
  • Motor fuel used for farming purposes (refundable)
  • Gasoline used in fishing boats (Refundable)
  • Railroad use of dyed fuel. Railroad use of clear diesel is refundable.
  • Diesel fuel used for other non-highway purposes may be refundable

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West Virginia

  • Fuel for export
  • West Virginia Motor Fuel Excise Tax consists of a flat rate and a variable rate component. Exports, Dyed Fuel, and Propane sales are exempt from the flat rate - some other uses are Refundable

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Wisconsin

  • Gasoline and undyed diesel fuel sold to the United States government or its agencies. (Sales to Wisconsin municipalities and school districts are not exempt.)
  • Gasoline sold on or after July 1, 1998, for off-road use in mobile machinery and equipment, provided the fuel is delivered into the customer's bulk storage tank in an amount not less than 100 gallons. Caution: Gasoline cannot be sold tax-exempt if it will be placed into the fuel supply tank of a licensed motor vehicle (except an urban mass transportation vehicle), snowmobile, recreational motorboat, or an all-terrain vehicle (unless the ATV is registered for private use).
  • Gasoline and undyed diesel fuel sold to a common carrier for urban mass transportation of passengers.
  • Gasoline and undyed diesel fuel exported from Wisconsin.
  • Gasoline sold to a general aviation fuel dealer licensed with the department for use in aircraft, provided the gasoline is delivered directly into the dealer's storage tank in an amount not less than 100 gallons.
  • Undyed diesel fuel sold as heating oil.
  • Undyed diesel fuel sold for use in trains.
  • Gasoline and undyed diesel fuel sold on a tribal reservation to a Native American who is an enrolled member of the Tribe.
  • Dyed diesel fuel (may only be used for off-highway purposes).
  • The first 1,000 gallons of renewable fuel produced or converted from another purpose each year by an individual and used by that individual in his or her personal motor vehicle provided the individual does not sell any such renewable fuel during that year. [sec. 78.01(2n), Wis. Stats.].

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Wyoming

  • Fuel for export
  • Non-highway use of undyed diesel is subject to refund

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1Updates were not received for, District of Columbia, Hawaii, Indiana, Massachusetts, Mississippi, and Rhode Island during 2013. That information should not be considered current.

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