20140730-IR-045140283NRA Information Bulletin #83 Sales Tax June 2014 (Supersedes previously published version) Effective Date: Upon Publication
DEPARTMENT OF STATE REVENUE
Information Bulletin #83 Sales Tax June 2014 (Supersedes previously published version) Effective Date: Upon Publication
SUBJECT: Gasoline Use Tax
REFERENCES:IC 6-2.5-3.5
DISCLAIMER: Information bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules, and court decisions. Any information that is not consistent with the law, regulations, or court decisions is not binding on either the department or the taxpayer. Therefore, the information provided herein should serve only as a foundation for further investigation and study of the current law and procedures related to the subject matter covered herein.
SUMMARYP.L227-2013 provides for the imposition of a new gasoline use tax. This new gasoline use tax replaces the previous sales tax, which will no longer be imposed on the sale of gasoline. This bulletin provides guidance as to how the gasoline use tax rate is calculated, how retail merchants file their returns, and how refunds or exemptions may be claimed.
INTRODUCTION
IC 6-2.5-3.5 provides for the imposition of a gasoline use tax effective for gasoline purchases on or after July 1, 2014. The gross retail tax otherwise imposed underIC 6-2.5 is not imposed on gasoline sales. Exemptions available to taxpayers underIC 6-2.5-5 (other than the sale for resale exemption underIC 6-2.5-5-8 ) are also available to taxpayers for gasoline use tax.
DEFINITIONS
The term "gasoline" has the same meaning as set forth underIC 6-6-1.1-103 (g).
The term "federal gasoline tax" means the excise tax imposed on gasoline under Section 4081 of the Internal Revenue Code.
The term "Indiana gasoline tax" means the tax imposed underIC 6-6-1.1 .
The term "qualified distributor" means a distributor that:(1) Is a licensed distributor underIC 6-6-1.1 ; and(2) Holds an uncanceled gasoline use tax permit issued underIC 6-2.5-3.5-17 .
The term "refiner" means a person or entity who manufactures or produces gasoline by any process involving substantially more than the blending of gasoline.
The term "terminal operator" means a person or entity that:(1) Stores gasoline in tanks and equipment used in receiving and storing gasoline from interstate or intrastate pipelines pending wholesale bulk reshipment; or(2) Stores gasoline at a boat terminal transfer that is a dock or tank or equipment contiguous to a dock or tank, including equipment used in the unloading of gasoline from a ship or barge and used in transferring the gasoline to a tank pending wholesale bulk reshipment.
CALCULATING THE MONTHLY GASOLINE USE TAX RATE
The gasoline use tax rate is computed monthly by the department and will be published on the Indiana Department of Revenue's website no later than the 22nd day of the month prior to the tax rate becoming effective. The following is the methodology used to compute the gasoline use tax rate:
Step 1a: The gasoline use tax rate is calculated by determining the average retail price per gallon for all grades of gasoline for each day from the 16th day of the previous month to the 15th day of the current month, inclusive of federal gasoline tax, Indiana gasoline tax, and Indiana gross retail tax or gasoline use tax. The price per grade will be weighted by the percentage of all sales by grade to determine the average retail price.
Step 1b: Subtract the per-gallon federal gasoline excise tax rate and the per-gallon Indiana gasoline excise tax rate from the amounts determined in Step 1a.
Step 1c:• For the period from May 16, 2014, to June 30, 2014, multiply the amount determined in Step 1b by 93.46% (0.9346) in order to subtract the sales tax included in the gasoline price.• For July 1, 2014, and later, subtract the gasoline use tax in effect on that day from the amount determined in Step 1b.
Step 1d: Determine the arithmetic average of the Step 1c amounts determined for each day from the 16th day of the prior month to the 15th day of the current month. For instance, to determine the average price for July, add the average retail price minus taxes (Step 1c) for each of the 31 days from May 16 to June 15 and then divide the sum by 31.
Step 2: Multiply the amount determined in Step 1d by 7% (0.07) and round to the nearest one-tenth of one cent ($0.001). This is the gasoline use tax rate for the following month.
GASOLINE USE TAX INVENTORY REPORTING
Each retail gasoline station or unlicensed bulk plant operator will be required to file the GT-Inventory Report to report the gasoline use tax on gasoline in inventory as of July 1, 2014. This paper form is a one-time reconciliation for the gasoline use tax on gasoline in inventory as of business open on July 1, 2014. The department will mail the GT-Inventory Report to retail stations. If a station or an operator required to file the GT-Inventory Report does not receive a form, they should call (317) 615-2630 or email fetax@dor.in.gov. The GT-Inventory Report must be filed by Aug. 1, 2014, along with payment for the gasoline use tax on gasoline in inventory as of July 1, 2014.
PAYMENT OF THE GASOLINE USE TAX
Whenever a refiner, terminal operator, or qualified distributor (seller) sells gasoline to a distributor that does not meet the definition of a qualified distributor for gasoline use tax purposes as defined previously or sells to a retail merchant (buyer), that seller shall collect the gasoline use tax from the buyer.
In addition, if a refiner, terminal operator, or qualified distributor transfers gasoline to a location for purposes of the retail sale of that gasoline, that refiner, terminal operator, or qualified distributor is subject to gasoline use tax upon the transfer of the gasoline. The consumer of gasoline (i.e., the retail customer) shall have no liability for the Indiana gross retail or use taxes on any gasoline purchases.
The gasoline use tax is also imposed on distributors (other than qualified distributors) who import gasoline from outside Indiana for shipment into and sale or use in Indiana. A distributor importing gasoline into Indiana must obtain a permit from the department as defined inIC 6-2.5-3.5-17 .
A refiner, terminal operator, qualified distributor, or distributor responsible for remitting the gasoline use tax shall file its returns and remit its taxes via the department's online tax filing system (INtax). Payments are due on the 25th day of the month for all gasoline sold from the 1st day of the month to the 15th day of the month (i.e., tax on sales from July 1 to July 15 are due on July 25). Payments are due on the 10th day of the following month for all gasoline sold from the 16th day of the month to the last day of the month (i.e., tax on sales from July 16 to July 31 are due on August 10).
A refiner, terminal operator, or qualified distributor must also file a monthly report reporting exempt gallons sold and the tax paid by each purchaser or recipient. This report is due at the end of the month after the gallons of gasoline are sold (for instance, the July monthly report is due August 31). On the report, the refiner, terminal operator, or qualified distributor should provide the data on an aggregate per-customer basis, as opposed to providing separate entries for each purchase made by a single customer. For example, if during any given month a terminal operator makes five exempt sales to "Purchaser," where each of the five sales involve 10,000 gallons, the terminal operator's monthly report of exempt sales should list a single entry for Purchaser of 50,000 gallons instead of five entries of 10,000 gallon sales.
BONDING AND FINANCIAL REPORTING
A refiner, terminal operator, or qualified distributor that has a surety bond for gasoline tax as provided underIC 6-6-1.1-406 et seq. will also be required to have a surety bond for the payment of gasoline use tax. The department shall determine the amount of the bond; however, any bond shall not be less than $2,000 and not greater than an amount equal to a three-month gasoline use tax liability for the refiner, terminal operator, or qualified distributor, as estimated by the department.
A refiner, terminal operator, or qualified distributor may be asked to provide financial records sufficient to demonstrate their revenues, expenses, assets, and liabilities for purposes of determining bonding requirements. A current financial statement, beginning balance sheet, or year-end report, similar to what is required by the department for fuel tax license applications (Form FT-1) will be sufficient to meet the financial reporting requirements.
EXEMPT TRANSACTIONS AND REFUNDS
As a general matter, the sales tax exemptions set forth inIC 6-2.5-5 apply to the gasoline use tax. Accordingly, a purchase of gasoline will be exempt from use tax to the same extent that transaction would be exempt from sales tax underIC 6-2.5-5 . The more notable exemptions include: sales to public utilities (IC 6-2.5-5-14 ); sales to state or local governments (IC 6-2.5-5-16 ); sales to the United States government (IC 6-2.5-5-24 ); sales to a nonprofit (IC 6-2.5-5-25 ); and sales for use in public transportation (IC 6-2.5-5-27 ).
If a purchase or shipment of gasoline is made within Indiana for shipment and subsequent sale outside Indiana, the purchase or shipment is exempt from the gasoline use tax. In such a case, if the gasoline use tax has already been paid, a distributor (including a qualified distributor) may claim a refund for the gasoline use tax paid on the gallons purchased. This refund may be claimed by completing Form GA-110L and providing all supporting documentation.
A qualified distributor may be allowed to make an adjustment on Form GT-103 when they are notified by a retail merchant that the retail merchant was not fully reimbursed by a customer's credit card company. For example, the retail merchant sold gasoline to an exempt customer, as defined byIC 6-2.5-5 , who paid using a credit card. Due to the agreement by the credit card company, the retail merchant was not fully reimbursed for the gasoline use tax when the gasoline was sold to an exempt customer. The tax that was paid by the retail merchant but not collected from the exempt customer can be claimed by a qualified distributor on the "Adjustments" line on Form GT-103. However, the qualified distributor must have a copy of all exemption certificates (Form ST-105) provided to the retail merchant available upon request by the department. Furthermore, the department will request proof that the distributor reimbursed the retail merchant for the gasoline use tax paid by the retail merchant. A copy of the credit card statement showing the difference in reimbursement to the retail merchant due to the gasoline use tax exemptions must also be provided.
In addition, a qualified distributor shall be allowed to make an adjustment on Form GT-103 to reflect any gasoline use tax imposed on purchases by the qualified distributor when the qualified distributor purchases gasoline from another distributor who has previously paid gasoline use tax on the gallons sold to the qualified distributor. Any information related to the payment of the gasoline use tax on gasoline purchased by the qualified distributor must be provided to the department upon request. A customer who has paid the gasoline use tax on gasoline that is used for an exempt purpose, as defined byIC 6-2.5-5 , may request a refund. The refund may be claimed by completing Form GA-110L and providing all supporting documentation._________________________Michael J. AlleyCommissioner
Posted: 07/30/2014 by Legislative Services Agency
DIN: 20140730-IR-045140283NRAComposed: Nov 01,2016 1:51:57AM EDTA PDF version of this document.
