Fuel Tax Compliance

Fuel Tax Compliance....

Avalon Petroleum has distributed petroleum products in the Midwest since 1925, and offers total compliance for EPA and fuel tax regulations. It is imperative that all fuel vendors use the legal calculation for charging various fuel taxes; recently, in several instances, this has not been the case, and in one instance our former customer became embroiled in a tax dispute with the Excise Tax Division of the IRS and the Illinois Department of Revenue. In many cases the fuel purchaser can be required to pay the appropriate taxing authority directly if the fuel vendor hasn't charged the proper taxes. The legal calculation for various products delivered to Cook County is as follows:

Invoice Component	Gasoline	On Road Diesel	Off Road Diesel
Base price of product	.679	.679	.679
Federal Excise Tax	.184	.244	-0-
State Motor Fuel Tax	.19	.215	-0-
State EIF Fee	.008	.008	.008
State UST tax	.003	.003	.003
Cook County Tax	.06	.06	.06
State Sales Tax (Avalon's rate)	5%	6.25%	6.25%
Calculated as follows (Base + Federal + UST + EIF) X Tax Rate
Total Price per Gallon	$1.1677	$1.2674	$.7931

Several Items are of Note, specifically:

Cartage should be included in the sales tax calculation in most cases, as well as the Federal Tax and State UST and EIF Taxes,
Cook County Tax is owed on any use in an internal combustion engine, including off road use of any kinds.
State Motor Fuel Tax must be paid on undyed diesel fuel, regardless of the use.
There are still refund procedures allowed for PTO use and other specific items.
Fuel storage tanks and dispensing equipment for dyed diesel fuel clearly marked as such in order to avoid fines.

If there are large differences in fuel quotations, fuel tax calculations are often the culprit. Non compliance can result in large, unmanageable problems even though the difference is only a few cents per gallon. Don't assume that the taxes are right, or you have no liablity if taxes are uncharged. If you have a question about how your invoices are calculated by Avalon or any other fuel vendor, please call us at 708-720-3060. We offer total compliance in fuel tax issues. Thanks again for your consideration.