Search Category: Fuels Tax
Fuels Tax Exceptions Racing Fuels
Racing fuel is high-octane gasoline (over 100 octane) used in motor vehicles designed for racing.
When tax is charged
If leaded
Leaded gasoline can’t legally be used in any vehicle that requires licensing and is driven on roads. Since Idaho doesn’t recognize leaded racing gasoline as a motor fuel, it isn’t taxed as a motor fuel.
Leaded racing fuel and sales and use taxes
Motor fuel is exempt from Idaho sales tax when sold with the fuels tax included in the price of the fuel. Leaded racing fuel doesn’t include fuels tax in its price, so the retail sale of racing gasoline is subject to sales tax. See the Fuels Tax Refunds guide for more information.
If unleaded
Unleaded gasoline can legally be used in any vehicle that requires licensing and is driven on roads. The first licensed distributor to receive the unleaded racing gasoline in Idaho must report and pay the Idaho motor fuels tax. See the Fuel Distributor guide for more information.
Transfer fee
All racing fuel is subject to the transfer fee. See the Distributors and the Transfer Fee guide for more information.
Fuels Tax Exceptions Gaseous Fuels
Gaseous special fuels are gases at a standard temperature and pressure. The most common gaseous special fuels are propane and natural gas. Hydrogen is also a gaseous special fuel (see Idaho Code section 63-2401).
Types
Propane
Propane is delivered in a compressed state.
Natural gas
Natural gas is delivered as either:
- CNG – under pressure as compressed natural gas
- LNG – in a super cold state as liquefied natural gas
Hydrogen
The most common taxable use of hydrogen is generating electricity from a hydrogen fuel cell to power a vehicle.
When tax is due
Only licensed distributors pay motor fuels tax on traditional motor fuels like gasoline and diesel. (See the Fuels Distributor guide for more information.) However, either the licensed distributor or the consumer pays motor fuels tax on nontraditional motor fuels like gaseous special fuels.
Motor fuels tax is due on gaseous special fuels used in motor vehicles that are licensed or required to be licensed motor vehicles.
- At a retail outlet, distributors charge motor fuels tax when the gaseous special fuel goes into the main supply tank of the motor vehicle.
- When sold into a consumer’s bulk tank, motor fuels tax is due when the fuel goes into the motor vehicle. Tax must be paid in one of these ways:
- The consumer pays the fuel tax using a
Form 75 – Fuels Use Report and Instructions. - The consumer can ask the licensed distributor to charge the tax on the fuel the distributor delivered. The licensed distributor collects and pays the tax.
- The consumer pays the fuel tax using a
Transfer fee
Gaseous special fuels aren’t subject to the Petroleum Clean Water Trust transfer fee. They’re not liquid at standard temperature and pressure.
When tax isn’t due
Consumers don’t owe motor fuels tax when distributors sell them gaseous special fuels for nontaxable uses, like heating fuel. If consumers use tax-paid gaseous special fuels in nontaxable ways, they can file for a refund of the motor fuels tax. For more information about nontaxable uses of special fuels, go to the Fuels Consumers guide.
Distributors shouldn’t charge the motor fuels tax on special gaseous fuels they put in vehicles that the federal government or a political subdivision of the State of Idaho owns or leases and operates. These government agencies are exempt. The distributor must keep records showing:
- Into which government vehicles they put the gaseous special fuel
- When they put the gaseous special fuel into the main supply tank of the government vehicle
For more information, see Motor Fuels Tax Rule 132.
Distributors must be licensed
People selling gaseous special fuels as a motor fuel must be licensed distributors, and they must collect and pay tax as required. They can become licensed distributors by getting one of these licenses:
- Motor fuels distributor license. This license allows distributors to buy for resale any type of untaxed motor fuels, including gaseous special fuels.
- Gaseous special fuels distributor license. This license is for distributors selling gaseous special fuels as a motor fuel. All other fuel they purchase must include the motor fuels tax and transfer fee in the purchase price.
Use Form IBR-3 – Idaho Fuel Distributor License Application and Instructions, to apply for the license you want.
Fuels Tax Exceptions Dyed Diesel
Consumers who buy dyed diesel are buying it without federal or Idaho motor fuels taxes included in the price. It’s dyed red to mark it as untaxed fuel. Dyeing diesel is a federal program adopted by Idaho. The IRS requires mechanically dyeing diesel at an approved terminal registered with the IRS.
If Idaho fuels tax is included in the price, Idaho law exempts that fuel from the Idaho sales tax. But if it’s not included in the price, you could owe sales tax on the fuel unless an exemption applies.
Dyed diesel uses
It isn’t allowed in a vehicle that requires licensing. You can use dyed diesel for nontaxable use only. Some examples include:
- Farming equipment such as combines, tractors, and other unlicensed equipment used off-road
- Construction equipment such as welders and front-end loaders,
- Home heating
- Refrigeration units on trailers with a separate supply tank
Tax and penalties
Vehicle operators found using dyed diesel in the main fuel supply tank of a licensed or required to be licensed motor vehicle must pay motor fuels tax and will receive a fine. Penalties start at $250. Additional federal penalties may also apply.
Approved uses of dyed diesel in a motor vehicle
Federal and Idaho law allows federal government agencies and state and local government agencies to use dyed diesel in motor vehicles:
- Owned or leased, and
- Operated by a federal agency or state and local government agencies.
These vehicles include, but aren’t limited to:
- School buses operated by school districts
- Highway maintenance trucks
- Fire trucks
Reporting fraud
Not paying motor fuels tax is tax fraud. This places an unfair burden on taxpayers who follow the laws passed by their representatives.
You can report tax fraud online.
What to do if you accidentally put dyed diesel in the tank of your licensed vehicle:
- Drain the dyed diesel from the main supply tank of the licensed vehicle,
- Replace the fuel filter,
- Clean the main supply tank and fuel supply lines, and
- Pay fuels tax on any dyed diesel used on a taxable road with the Form 75 – Fuels Use Report and Instructions.
Undyed diesel
Undyed diesel, also called clear diesel, includes state and federal taxes in the price. These taxes help fund highway construction and maintenance in Idaho.
Fuel Consumers Exceptions
Consumers usually pay Idaho fuels tax when they buy fuel from a retail dealer in Idaho. The price paid usually includes the cost of the fuels tax.
Exceptions
- Dyed diesel
This diesel fuel is meant for off-road use only. It’s dyed red to distinguish it from diesel for road use. - Gaseous fuels
Tax is included only if it’s put directly into the supply tank of a licensed motor vehicle. - Racing fuels
High-octane, leaded gasoline used in motor vehicles designed for racing isn’t taxed as a motor fuel. - Buying from an Idaho Indian tribe or member
The fuel sold by these retailers won’t include Idaho fuels tax, but will include a tribal fuel tax.
Fuel Distributors Laws & Rules
Fuel Distributors Paying
Paying motor fuels tax
Payment options for distributors
You can pay your motor fuels tax in one of these ways:
- Include payment when mailing your Form 1450.
- Pay securely online with an electronic payment:
- You can use your Taxpayer Access Point (TAP) account. Visit TAP availability for the dates you can pay your fuels tax.
- You can use Quick Pay if you don’t have a TAP account.
- You can use any of the options on our E-Pay page.
- Pay in person at any of our offices. Visit our Office Hours and Locations page.
We recommend you don’t leave cash in a drop box.
For payments of $100,000 or more
You must use ACH debit or ACH credit.
Transfer fee
Distributors are required to pay a 1¢ per-gallon transfer fee. The fee is on the delivery or storage of petroleum or petroleum products in Idaho.
Fuel Distributors Filing
Distributors must file a monthly report with the Tax Commission — Form 1450, Distributor’s Fuel Tax Report. The report is due the last day of the month following the tax period.
Form 1450
The form 1450 isn’t available on this website. We mail it with personalized information for each distributor. Here’s a sample of the form and the instructions:
- Idaho Fuel Distributor’s Fuel Tax Report and Schedules SAMPLE
- Form 1450 INSTRUCTIONS – Distributor’s Fuel Tax Report
Codes for reporting
| Product code | Product | Description |
|---|---|---|
| E00 | Ethanol | Denatured ethanol. Usually contains less than 3% denaturing agent (naphthas). |
| E01-E99 | Ethanol blend | The actual blend of gasoline with denatured ethanol. The actual percentage of ethanol is indicated by the number (E10 = 10%, etc.) |
| B00 | Biodiesel | 100% biodiesel agricultural product with no diesel added. |
| B01-B99 | Biodiesel blend | Biodiesel blended with diesel. The actual percentage of biodiesel is indicated by the number (B10 = 10%, etc.) |
| 122 | Blending component | Additives to biodiesel, diesel, or used oils |
| 126 | Naphthas, natural gasoline | Denaturing agents added to ethanol |
| 175 | Residual fuel, Other distillates | Products subject to the transfer fee, including: transmix, motor oil, lubricants, etc. |
- For biodiesel, ethanol, and biodiesel or ethanol blends, see the Idaho Production Plants guide.
- For a full list of codes, read Product Code List (for use with Form 1450).
If you’re a distributor with 25 or more transactions, you must file your monthly report electronically. Contact our electronic filing group for more information.
License validation
Taxpayer Access Point (TAP) can help distributors validate suppliers’ and customers’ identities. You must register with TAP and be logged in to access this confidential information.
Transfer fee
Distributors are required to pay a 1¢ per-gallon transfer fee. The fee is on the delivery or storage of petroleum or petroleum products in Idaho.
How to file Form 1450 through TAP
You have three options for filing your Form 1450 through TAP:
- XML
- Excel Template
- Manual Data Entry
XML
You can use your usual software vendor if your vendor supports fuels tax reporting and can produce a correctly formatted XML file that follows Idaho’s requirements. You can also create your own XML solution. See below for the latest Schema and Change Log.
TAP’s verification process reviews your file for these items:
- Does the file match Idaho’s XML schema? TAP will highlight errors for specific line numbers.
- Does the report’s filing period match the selected filing period?
- Does the account number in the report match the TAP account? (The account number may also be called “permit number” or “state license number.”)
- Does the taxpayer’s tax ID number (EIN or SSN) in the report match the one associated with the TAP account?
- Your filing will undergo more reviews as it processes.
Excel Template
You can find a copy of the Form 1450 Excel template on TAP by selecting the File Return link for the desired reporting period. The template has one sheet of instructions and three sheets of data that you must fill out. Don’t change or rearrange the columns when copying data into the Excel template.
Manual Data Entry
Fuel Distributor Tax Return forms include:
- Distributor Report Details
- Schedule of Disbursements
- Schedule of Receipts
The forms allow manual data entry through the TAP filing process. You can enter data manually for an entire form or make adjustments to the Excel template after you’ve uploaded it.
For a more detailed look at the submission types, watch the video below.
Contact
Contact us if you have any questions.
Fuel Distributors Tax Rate
Tax Rates for Fuels Taxes
Gasoline and alcohol blends
| Fuel type | Rate per gallon | Effective date |
|---|---|---|
| Gasoline and gasohol, including ethanol (E00) and ethanol blends (E01 to E99), methanol and M-85 | $.32 | 07-01-2015 |
| High-octane racing fuel containing lead | $.00 | |
| Unleaded high-octane racing fuel | $.32 | 07-01-2015 |
Special fuels
| Fuel type | Rate per gallon | Effective date |
|---|---|---|
| Diesel, including biodiesel (B00) and biodiesel blends (B01 to B99) | $.32 | 07-01-2015 |
| A55 | $.32 | 07-01-2015 |
| Propane (4.25 pounds = 1 gallon) | $.232 | 07-01-2015 |
| Liquefied Natural Gas (per DGE) 1 Diesel Gallon Equivalent (DGE) = 6.06 pounds | $.349 | 07-01-2015 |
| Compressed Natural Gas (per GGE) 1 Gasoline Gallon Equivalent (GGE) = 126.67 cubic feet or 5.66 pounds | $.32 | 07-01-2015 |
| Hydrogen (per GGE) 1 Gasoline Gallon Equivalent (GGE) = 1 kilogram (kg) | $.32 | 3-20-2020 |
Aircraft engine fuels
| Fuel type | Rate per gallon | Effective date |
|---|---|---|
| Aviation Gasoline | $.07 | 07-01-2008 |
| Jet Fuel | $.06 | 07-01-2008 |
Fees
| Fuel type | Rate per gallon | Effective date |
|---|---|---|
| Transfer Fee | $.01 | 03-23-1990 |
Fuel Distributors Guide
In Idaho, licensed distributors pay the Idaho motor fuels tax and a transfer fee to the state of Idaho. They must pay Idaho fuels tax on most taxable motor fuels. The tax is included in the price of the fuel when sold to the consumer.
Distributor types
Idaho has four types of fuels distributors.
- Licensed motor fuels distributors
These distributors can buy any type of product at an Idaho terminal before the motor fuel tax, aircraft engine fuel tax, or transfer fee is included in the price. - Licensed gaseous fuels distributors
These distributors can sell gaseous special fuels and pay the tax on gaseous special fuels when sold for a taxable use. (See Gaseous Special Fuels.) All other products they buy must include the motor fuels tax, aircraft engine fuels tax, and transfer fee in the price. - Licensed limited distributors
These distributors can buy product at an Idaho terminal that’s only subject to the transfer fee, without the transfer fee included in the price. All other products they buy must include the motor fuels tax, aircraft engine fuels tax, and transfer fee in the price. - Unlicensed distributors
All products these distributors buy must include the motor fuels tax, aircraft engine fuels tax, and transfer fee in the price.
Applying for a license
Complete and send in Form IBR-3, Idaho Fuel Distributor License Application and Instructions, to apply for an Idaho motor fuels distributor license.
You’ll need to be bonded. Read more in our Fuel Tax Bonding Options guide.
Receiving motor fuels
Distributors must pay tax when they receive motor fuels in Idaho. The fuels tax then becomes part of the purchase price paid by each subsequent purchaser until the final purchaser pays at the pump or upon delivery.
Motor fuels are received in Idaho when the distributor who owns the fuel does one of the following:
- Removes it from an Idaho terminal or production plant
- Imports the fuel into Idaho
The ownership of the fuel is established at the point of origin. Ownership doesn’t change when it crosses the Idaho border.
Gaseous special fuels
Propane and natural gas aren’t received until they’re put in the main supply tank of a licensed or required to be licensed motor vehicle. See the Gaseous Special Fuels guide.