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Last Updated: 4/20/2017

Organic Oils Used as Motor Fuel

​Organic oils and other unrefined products are derived from plants or animals and not chemically processed or refined. This includes, but is not limited to, any new or used organic oils, such as waste oil, used fryer oils, fish oils, unprocessed corn oils, soybean oils and other organic oils.

These products are subject to the state Motor Fuel Excise Tax if they are:

  • Used as motor fuel to propel a licensed motor vehicle; or

  • Blended with either dyed or undyed diesel fuel

Who pays the tax

The tax is paid by the distributor, retailer or- in some cases- the individual who uses the fuel as outlined below.

Unlicensed distributors or retailers

If you distribute or sell organic oils for use as a motor fuel in a licensed vehicle, you are responsible for paying the tax. Complete Form ORG-1, Organic Oil Motor Fuel Tax, and submit it to the Minnesota Department of Revenue along with your payment.

Licensed distributors

If you use, sell or blend organic oils for use as motor fuel in a licensed vehicle, you must report the product on the Minnesota Gasoline Tax Return and Special Fuel Tax Return.

Individuals

If you use organic oils as motor fuel in a licensed vehicle, you are responsible for the tax, unless you paid it when you purchased or received the product. If you paid the tax at purchase, keep your receipt for 3 1/2 years as proof the tax was paid.

If you did not pay the tax at the time you purchased or received the product, you must pay the tax. Complete Form ORG-1, Organic Oil Motor Fuel Tax Return, and submit it to the Department of Revenue along with your payment.

For information on how to pay your organic fuel return by phone, follow these step by step instructions.