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Ext. PublicationMotor Fuels Tax Minute, Episode 84: Racing Fuel Taxability and Compliance
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In this episode of Motor Fuels Tax Minute, our hosts discuss the taxability of racing fuel.
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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 84
00:00:00
Leanne: Welcome to Weaver’s Motor Fuels Tax Minute, the vlog where we talk all things motor fuel. Today, we’re going to round out our short series on racing fuel. And having talked about some definitions, federal and state, and debated whether the Las Vegas Grand Prix is on a track or on the streets around the strip, today we’re going to talk about whether or not it is actually taxable.
And I think, Kelly, what it’s important to note is that while it’s not subject to these off-highway business use exemptions, it is not necessarily subject to the fuel tax. Correct?
00:00:30
Kelly: That is correct. And it, of course, goes back to it all depending on the state. California, for example, actually lists out if the motor fuel excise tax does not apply to racing fuel, then it could actually switch over to the sales and use tax, which we see a lot with dyed diesel if the states are not treating it as off-road exempt, then it gets subject to the fuel tax. But, if it is off-road, then it could be subject to the sales tax.
Some of the states, going back to our buddies at Arizona, they actually require an exemption certificate from a licensed registered distributor, essentially saying that this racing fuel will be used at a racetrack. If they’re not willing to supply that exemption certificate or they don’t have it, then they’ll be charged the regular fuel tax rate. Same as if the racing fuel, going back to your example, that was sold at a retail gas station, then it could also be subject to the fuel tax rate.
One more thing to think about when it comes to racing fuel is diversions, which happen all the time from my experience with racing fuel, because they’ll go to like a racetrack in Arizona. Arizona will not need all the fuel. Racing fuel is expensive. It sure as heck is going to be trucked to the next state that needs it.
So, racing fuel, things to keep in mind. Just a quick recap. Specific definitions in order to meet the definition of racing fuel use is looked at a lot. Make sure if an exemption certificate is required to get one, it could be subject to sales tax and keep an eye on those diversions.
00:02:01
Leanne: Well, thank you, Kelly, and thank you everyone for bearing with us for racing fuel.
In the next few episodes, we’re going to introduce you to some of the newer members of our team that you, if you’re clients of ours, have seen in emails, or if you do watch the Motor Fuels Tax Minute, you may well have seen on our holiday special. And then after that, we’ll return with some more specific topics.
If there’s anything you want us to discuss that we haven’t discussed yet, or maybe it’s something that we have and it’s been a couple of years and you’d just like to see it as a refresher, please drop it in the comments, and you could win some Weaver swag.
And that was this week’s Motor Fuels Tax Minute.
