Motor Fuels Tax Minute, Episode 59: 637 Re-Registration

In this week’s episode of Motor Fuels Tax Minute, our hosts focus on a question regarding 637 re-registration.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 59

00:00:00
Kelly: Welcome to our Motor Fuels Tax Minute where we talk all things motor fuel. Leanne, today I think you have an interesting topic that we run into a lot with 637s.

00:00:10
Leanne: Yeah, I’m on this licensing kick. We’ve been doing a lot of work with licenses and something that comes up quite a lot as we see changes in the industry is the question of re-registration. You know, I previously spoke about, do licenses last continuously or do they need to be renewed? And I really focused on the state side.

On the federal side, the 637 is typically continuous unless you have a change in ownership. And a change in ownership requires a re-registration of that 637.

Then we get the question, well, what’s a change in ownership? A change in ownership is a change in 50% or more of the beneficial ownership of the company. If you have a change just in officers, such as if somebody is purchasing a 10% stake, you need to notify the IRS, but you don’t need to re-register. But if somebody is buying 50% or more of the entity or, and this is important, a parent company of the registered entity. So, you may see that your parent company is purchased and you still stay in the org chart. The IRS has told me that that is considered a change in ownership.

So anytime there’s a 50% change in ownership, whether it’s the company who has the 637 registration itself or a parent company of that where the entire flow is going to the new owner, then you do need to re-register. It is an entire new re-registration.

We hope that it takes less than nine months. I am seeing them move a little faster than brand new registrations, but that’s not inevitable, so plan accordingly. Be prepared to send that re-registration in as soon as that transaction, that acquisition, closes and then it’s in the hands of the IRS. But we can certainly assist in trying to move them along a little bit faster.

00:02:00
Kelly: I think another good thing to note that we just ran into is, how do you notify the IRS? They’re actually, correct me if I’m wrong, Leanne, there’s no official form to really notify them. It’s just write them a letter and send it in with a copy of your application or with your 637 registration.

00:02:17
Leanne: That’s right. If you’re doing the notification situation where you have less than 50% change, you have to do it within ten days and you have to send it to the address that is on your 637-registration letter. It’s the letter you received when you first became registered, so hopefully everybody has that. It can be a multiple of different addresses depending on which office it was issued from.

So yeah, to your point, there’s no standard form and no standard place to send it. But if you get it in and if you send it in a way that you can track it, certified mail, priority mail, then you’ve done what you need to do. You’ve discharged your obligation as long as it’s postmarked by that ten-day time period. And it’s the same for re-registration. You have to get it in within ten days. You can fax in a re-registration.

So again, just make sure that that fax is in and you’ve got the confirmation within the ten days, and then you won’t get penalized on that portion.

00:03:12
Kelly: Excellent. Well, thank you so much, Leanne. And thank you to our listeners. If you’re running into issues with these changes in ownership or changes in address, feel free to reach out to us. We are always here to help here at Weaver.

Thank you for joining us.