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Petroleum Taxes FAQs
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Frequently asked questions about petroleum taxes.
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Yes. You must file a return for each month that your license is in effect. If you have no liability, you still need to file a return with zero gallons reported by the due date.
You must report gasoline purchases by gross volume (and not net volume). View the statute, M.S. 296A.15.
You must also report the following types of fuel by gross volume (except for sales or transfers between fuel refineries and/or terminals): No. 1 and No. 2 diesel fuel oil or heating fuel oil, kerosene, denatured ethanol, and biodiesel. View the statute, M.S. 239.79.
Report all other fuel as listed on your original invoice.
Fuel terminals must keep records of receipts, disbursements, and inventories. For more information, see MN Rules 8125.0200.
Distributors, dealers, bulk purchasers, special fuel dealers and users of special fuel must keep records of all purchases, transfers, sales, and use of petroleum products and special fuel. This includes copies of all sales tickets, customer activity reports, and supplemental reports to verify all credits and deductions taken. Accurate inventories should be available as reported on Form PDA-78, Petroleum Product Reconciliation. For more information, see MN Rule 8125.0400
You must keep and maintain records for at least 3 1/2 years. View the MN Statute 296A.19.
If you file a monthly EDI file through the e-Data Exchange system, you must submit a new (amended) EDI file for the month you wish to amend. Depending on the changes you may have a new credit or liability. If you have a new liability you will have to pay the additional tax when you amend your file by your normal payment method.
If you don't file an EDI file monthly, you will have to amend your previously filed returns in our e-Services system. After you login to e-Services, open ("view") the return you want to amend and click the "change" button. This lets you change your tax inputs and will result in either a new credit or liability. You must also submit an amended monthly detail file for that reporting period.
It depends on how long it's been since the original return was filed and which specific tax or fee is involved, as outlined below.
Prior period adjustments are not allowed for periods following a tax rate or surcharge change.
For the Gasoline Tax, Special Fuel Tax and the Petroleum Inspection Fee:
- You may report transactions from the previous month on your current return as a "prior period" adjustment.
- You may report transactions from two months prior on your current return, as long as such adjustments aren't made regularly. Otherwise, submit an amended return.
- To report transactions from more than two months ago, you must always submit an amended return.
- Amended returns must include all the original and amended transactions.
For the Petroleum Tank Release Cleanup Fund Fee:
- You may report transactions from prior periods on your current return, subject to the same limitations as listed above.
- However, you must submit an amended return in the following situations:
- If you forgot to report a load of fuel on a return while the fee was inactive, and the fee becomes active the next month, you must amend the return.
- If you didn't include the fee for a load of fuel while the fee is active, and you realized after filing your return that the fee should have been included, you must amend the return.
- Amended returns must include all original and amended transactions.
You will receive either a refund check or an EFT refund if you overpaid a tax on your return, or if the Department of Revenue made a change to your return that reduces your tax. The refund may also be the result of an audit that recently took place on your Petroleum Tax returns. You should keep copies of any tax form or refund claim you file for your reference and in case you are ever audited.
If you have checked your records and are still unsure why you received a refund, contact our Petroleum Tax unit at 651-296-0889 and we can review your account with you.
You qualify for a distributor's license if you meet one of the following requirements:
- You receive petroleum products in Minnesota that are consigned to you from a terminal or refinery for storage and subsequent distribution by tank car or tank truck
- You produce, manufacture or refine petroleum products (including ethanol and/or biodiesel products) in Minnesota
- You import petroleum products into Minnesota by boat, barge, pipeline or train car for storage and subsequent delivery
- You hold a license and perform a function in an adjoining state equivalent to that of a distributor under Minnesota law
It depends on if the fuel is dyed or undyed, as outlined below:
- B00 (100% biodiesel)- Report as an undyed diesel product, using product code 284.
- D00 (100% dyed biodiesel)- Report as a dyed diesel product, using product code 290.
You qualify for a Minnesota Special Fuel Dealer license if you meet one of the following requirements:
- You are a state or local government agency
- You sell LPG, CNG or LNG for use as a motor fuel
- You sell or use jet fuel for aviation purposes
To apply for or renew a license:
Licenses must be renewed annually. Distributor licenses are valid July 1- June 30. Special Fuel Dealer licenses are valid Dec 1-Nov 30. Licenses can be issued mid-year, but they will expire June 30 (for distributors) or Nov. 30 (for dealers).
No, the bond is not required for your licenses. You do not have to submit any corporate financial statements with your application and fee.
B00 follows the same tax and reporting rules as undyed diesel fuel. The first licensed distributor must report and pay the Petroleum Tax on all purchase of this product.
The Department of Revenue corrects minor errors we find on refund claims. Also, our computer system automatically rounds the gallons on your claim form to the nearest gallon. Either of these may result in a different refund amount.
If you submit multiple claims at the same time they may be combined into a single total check. If you believe your refund is too large, add up the individual claim amounts to see if it was possibly combined to a larger total amount.
Your refund may have potentially been used to offset another tax liability. In this case, you will receive a refund offset letter.
Motor fuel refund claims must be filed within 14 months (425 days) from the date of purchase. The postmark date is considered the filing date. For more information on motor fuel refunds, see Form PDR-1, Minnesota Motor Fuel Claim for Refund.
Transit and ambulance refund claims must be filed within 3 and a half years from the date of purchase. The postmark date is considered the filing date. For more information on transit and ambulance refunds, see
Form PDR-1T, Transit and Ambulance Claim for Refund.
Call our Petroleum Tax unit at 651-296-0889 and ask to speak to an auditor.
To help reduce tax cheating. Dyed fuel indicates that no Motor Fuel Excise Tax has been paid on the fuel. It may only be used in non-licensed vehicles or equipment for specific, tax-exempt activities. Anyone using dyed fuel on public roads or for non-exempt purposes is evading the excise tax and will be penalized if caught.
When dyed fuel is used in a licensed motor vehicle, the vehicle's registered owner can be penalized $10 per gallon or $1,000 per violation, which ever is greater. The Internal Revenue Service also may penalize the vehicle owner, separately from any Minnesota penalties. View the statute, M.S. 296A.22, subd. 4.
Yes, as long as the dyed fuel is stored in a separate tank that isn't connected to the tank that is used to propel the vehicle.
Dyed fuel can also be used off-road in non licensed vehicles.
Anyone selling dyed fuel for use on public roads is breaking the law. Please report them to the proper authorities by calling the Department of Revenue tip line at 651-297-5195 or 1-800-657-3500.
IRS officials have been monitoring possible supply problems with undyed diesel fuel and will announce any remedial actions taken.
Please report supply problems to the IRS. If you have questions or see any evidence of violations, call the nearest IRS office or the Minnesota Petroleum Tax Unit at 651-556-6354.
It normally takes up to six weeks to receive a refund after you file a claim. We will review your claim and notify you in writing if your claim is denied. If you haven't heard from us or received your refund after six weeks, you may contact our Petroleum Tax unit at 651-296-0889.
The Petroleum Inspection Fee helps cover the state's cost to oversee the sales and supply of petroleum products in Minnesota.
Most of the revenue from this fee (81 percent) goes to the Department of Commerce to pay for regulation of fuel sellers, fuel supply monitoring and a state program that helps replace or upgrade oil-burning furnaces to increase energy efficiency. The remainder is deposited into the state's General fund.
The inspection fee is paid by fuel distributors in Minnesota. They must report and pay the fee on their monthly Gasoline Tax Return.
LPG (Propane), CNG (Compressed Natural Gas) and LNG (Liquefied Natural Gas) are the only products that aren't subject to the inspection fee.
The fee is 2 cents per gallon- $20 per 1,000 gallons- on all petroleum products received in this state by a licensed fuel distributor.
The first licensed distributor who is responsible for reporting the gallons to the Minnesota Department of Revenue must pay this fee when it is in effect. The fee is based on all gallons received into Minnesota and that are placed into storage for use in this state.
Revenue from this fee goes to the state Petroleum Tank Fund, which helps pay for the prevention and cleanup of leaks from petroleum storage tanks. The fee is temporarily imposed for a 4-month period whenever the balance of the fund falls below $4 million.
The Petroleum Tank Cleanup Fee is in effect when a committee decides it should go into effect after the state Petroleum Tank Fund drops below $4 million.
You will receive notification in a letter from the Petroleum Tax unit when the cleanup fee is set to be active. You will also be able to see a notification on the Department of Revenue website under the Petroleum Tax type.
A notification is always included in the Minnesota Petroleum Marketers magazine as well.
If you have received a Petroleum Tax bill from the Department of Revenue, you must log in to our e-Services system to make a payment. You may pay the bill by accessing your Petroleum Tax account, or by using the "Make a Payment" link and entering the Letter ID on the bill.
Refer to the appeal information that was included with the Tax Order. For more information, see the Taxpayer Rights.
You can change your payment information when making a payment through our e-Services system. For step-by-step payment instructions click the "Help" button on the e-Services home page.
