Motor Fuels Tax Minute, Episode 62: Transmix

In this week’s episode of Motor Fuels Tax Minute, our hosts delve into a frequently discussed topic: transmix.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 62

00:00:00
Leanne: Hi everyone, welcome to Weaver’s Motor Fuels Tax Minute, the vlog where we talk all things motor fuel. If you’re a regular viewer, you will have seen me talk for weeks about licensing. You know, I want to take a break from that. I’m not the only one on this team. We have a fabulous team doing lots of great work. So, Kelly, what are you seeing? If I’m seeing all the licensing, you’ve got to be seeing something different.

00:00:22
Kelly: Oh, I was loving those license topics, and I definitely do not mind you taking the lead on that, Leanne. Thank you for covering that.

A topic that does come up a lot is actually transmix. And I think it’s important to understand how the IRS really defines transmix, because that definition gets a little bit mixed up at times. So, we have this great diagram that was put together. As you can see, transmix is where you have gasoline coming into the pipeline, diesel coming into the pipeline and then they meet. That creates what is traditionally known as transmix. It’s a byproduct of two refined products that meet in the pipeline. This is different than fuel contamination, according to the IRS, because that occurs outside of the pipeline.

00:01:05
Leanne: Kelly, it’s an interesting definition how the two come together. And I know that it is a product that comes up for discussion every so often, but not a lot. But when it does come up, it’s complicated. So maybe something we can get into at some point is how does the IRS treat it? And do you have any insight on whether federal and state would count it the same way or define it the same way?

00:01:28
Kelly: Well, some states do, and some states don’t. And that’s going to be a topic that we’re going to cover next time  — we’re going to dig into Tennessee. We’re going to see how they’re a little bit different than how federal treats it.

00:01:38
Leanne: All right, well that sounds good. You know, and let’s maybe circle back. I’m sure our listeners  have questions. I’m guessing some of them might be, do I need to be licensed? How do the states and the federal treat it for tax purposes? So, these are all issues that we’ll come back to at a later time.

That’s this week’s Motor Fuels Tax Minute. Thank you.