Subdivision 1.Tax imposed.

(a) There is imposed an excise tax on all special fuel at the rates specified in subdivision 2. For purposes of this section, “owner or operator” means the operation of licensed motor vehicles, whether loaded or empty, whether for compensation or not for compensation, and whether owned by or leased to the motor carrier who operates them or causes them to be operated.

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Terms Used In Minnesota Statutes 296A.08

  • Adult: means an individual 18 years of age or older. See Minnesota Statutes 645.451
  • Aircraft: means any contrivance, now or hereafter invented, used or designed for navigation of or flight in the air. See Minnesota Statutes 296A.01
  • Bulk purchaser: means any person not principally engaged in buying and selling petroleum products or combustible gases who receives special fuel for storage and subsequent delivery into the supply tank of an aircraft or a licensed motor vehicle operated by the person. See Minnesota Statutes 296A.01
  • Commissioner: means the commissioner of revenue. See Minnesota Statutes 296A.01
  • Dealer: means any person, except a distributor, engaged in the business of buying and selling gasoline and other petroleum products in this state. See Minnesota Statutes 296A.01
  • Distributor: means any person who (1) receives petroleum products in this state for storage and subsequent distribution by tank car or tank truck or both, (2) produces, manufactures, or refines petroleum products in this state, or (3) imports petroleum products into this state via boat, barge, or pipeline for storage and subsequent delivery at or further transportation from boat, barge, or pipe line terminals in this state. See Minnesota Statutes 296A.01
  • Dyed fuel: means motor fuel to which indelible dye has been added, either before or upon withdrawal at a terminal or refinery rack, and which may be sold for exempt purposes. See Minnesota Statutes 296A.01
  • Gasoline: means :

    (1) all products commonly or commercially known or sold as gasoline regardless of their classification or uses, except casinghead gasoline, absorption gasoline, condensation gasoline, drip gasoline, or natural gasoline that under the requirements of section 239. See Minnesota Statutes 296A.01

  • Kerosene: means a refined petroleum distillate consisting of a homogeneous mixture of hydrocarbons essentially free of water, inorganic acidic and basic compounds, and excessive amounts of particulate contaminants and that meets the specifications in ASTM specification D3699-08. See Minnesota Statutes 296A.01
  • Licensed motor vehicle: means (1) any vehicle subject to a motor vehicle registration in which the power is produced with any fuel in an internal combustion engine, and (2) any motor vehicle not subject to a motor vehicle registration on which is mounted a corn shelling, feed grinding, well drilling, or sawing machine. See Minnesota Statutes 296A.01
  • Person: means any individual, firm, trust, estate, partnership, association, cooperative association, joint stock company or corporation, public or private, or any representative appointed by order of any court; or an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform any act prescribed by this chapter. See Minnesota Statutes 296A.01
  • Petroleum products: means all of the products defined in subdivisions 2, 7, 8, 8a, 8b, 10, 14, 16, 19, 20, 22 to 26, 28, 32, and 35. See Minnesota Statutes 296A.01
  • propane: means a product made of short hydrocarbon chains and containing primarily propane and butane that is stored in specialized tanks at moderate pressure. See Minnesota Statutes 296A.01
  • Special fuel: means :

    (1) all combustible gases and liquid petroleum products or substitutes including undyed diesel fuel, except gasoline, gasoline blended with ethanol, and agricultural alcohol gasoline which are delivered into the supply tank of a licensed motor vehicle or into storage tanks maintained by an owner or operator of a licensed motor vehicle as a source of supply for such vehicle;

    (2) all combustible gases and liquid petroleum products or substitutes, except gasoline, gasoline blended with ethanol, and agricultural alcohol gasoline, when delivered to a licensed special fuel dealer or to the retail service station storage of a distributor who has elected to pay the special fuel excise tax as provided in this chapter;

    (3) all combustible gases and liquid petroleum products or substitutes, except gasoline, which are used as aviation fuel; or

    (4) dyed fuel that is being used illegally in a licensed motor vehicle. See Minnesota Statutes 296A.01

  • state: extends to and includes the District of Columbia and the several territories. See Minnesota Statutes 645.44
  • Tax: means any fee, charge, exaction, or assessment imposed by a governmental entity on an individual, person, entity, transaction, good, service, or other thing. See Minnesota Statutes 645.44
  • terminal: means any petroleum refinery, pipeline terminal, river terminal, storage facility, or other point of origin where petroleum products are manufactured, or imported by rail, truck, barge, or pipe; and held, stored, transferred, offered for distribution, distributed, offered for sale, or sold. See Minnesota Statutes 296A.01

(b) For undyed diesel fuel and undyed kerosene, the tax is imposed on the first licensed distributor who received the product in Minnesota.

(c) For dyed fuel being used illegally in a licensed motor vehicle, the tax is imposed on the owner or operator of the motor vehicle.

(d) For dyed fuel used in a motor vehicle but subject to a federal exemption, although no federal tax may be imposed, the owner or operator of the vehicle is liable for the state tax.

(e) For other fuels, including jet fuel, propane, and compressed natural gas, the tax is imposed on the distributor, special fuel dealer, or bulk purchaser.

(f) Any person delivering special fuel on which the excise tax has not previously been paid, into the supply tank of an aircraft or a licensed motor vehicle shall report such delivery and shall pay, or collect and pay the excise tax on the special fuel so delivered to the commissioner.

Subd. 2.Rate of tax.

(a) Subject to paragraph (b), the special fuel excise tax is imposed at the following rates:

(1) liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon;

(2) liquefied natural gas is taxed at the rate of 15 cents per gallon;

(3) compressed natural gas is taxed at the rate of $1.974 per thousand cubic feet or 25 cents per gasoline equivalent; and

(4) all other special fuel is taxed at the same rate as the gasoline excise tax as specified in section 296A.07, subdivision 2.

(b) Annually on August 1, the commissioner must determine the tax rate applicable to the sale of E85, M85, and all other gasoline subject to tax under this section for the upcoming 12-month period beginning on January 1. The rate must be adjusted as provided in section 296A.07, subdivision 3, paragraph (b). The tax rate must be rounded to the nearest tenth of a cent. Each of the tax rates for liquefied natural gas or propane, liquefied natural gas, compressed natural gas, and all other special fuel must not be lower than the respective rates specified in paragraph (a).

(c) The tax is payable in the form and manner prescribed by the commissioner.

(d) For purposes of this subdivision, “gasoline equivalent,” as defined by the National Conference on Weights and Measures, is 5.66 pounds of natural gas or 126.67 cubic feet.

Subd. 3.Exemptions.

The provisions of subdivisions 1 and 2 do not apply to special fuel or alternative fuels purchased by:

(1) a transit system or transit provider receiving financial assistance or reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384;

(2) providers of transportation to recipients of medical assistance home and community-based services waivers enrolled in day programs, including adult day care, family adult day care, day treatment and habilitation, prevocational services, and structured day services;

(3) an ambulance service licensed under chapter 144E;

(4) providers of medical or dental services by a federally qualified health center, as defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a mobile medical unit; or

(5) a licensed distributor to be delivered to a terminal for use in blending.

Subd. 4.Tax imposed on use.

If it is determined by the commissioner from an examination of any records pertaining to the operation of any licensed motor vehicle which uses special fuel, that the special fuel tax on the special fuel used in this state has not been paid to this state, or to any other state if purchased in such other state, there is hereby imposed an excise tax at the same rate per gallon as the gasoline tax, on all such special fuel. All assessments of tax made under this subdivision shall be paid by the user to the commissioner upon demand. For purposes of this subdivision, “special fuel” means any fuel other than gasoline used in a licensed motor vehicle in this state.

Subd. 5.Intended use.

All special fuel except that used for aviation fuel shall be deemed to be intended for use in a licensed motor vehicle in this state at the time of sale or delivery.

Subd. 6.Liability for failure to keep adequate records.

If adequate records are not kept, or if the sales are not adequately accounted for, then all sales of combustible gases and liquid petroleum products, except gasoline, are deemed to be sales of special fuel. In such cases, there is imposed an excise tax of the same rate per gallon as the gasoline excise tax on all such products, and the vendor is liable for the tax.