As your trusted fuel supplier, we want to ensure you’re aware of potential tax savings available for clear diesel fuel used in off-road operations. We’ve gathered some important information that could lead to significant savings, but we encourage you to consult with your tax professional to confirm eligibility.
What You Need to Know:
- Tax Exemptions/Refunds Overview If you use clear diesel fuel for off-road purposes, you may be eligible for tax exemptions and refunds. This could apply to industries such as construction, mining, and other off-highway uses. For Ag related exemptions, click here. Keep in mind, dyed diesel does not have any additional off-road tax exemptions available. If you are using dyed diesel, you do not need to complete this form.
- Exemption Rates The exemption rates for clear diesel used off-road can vary, so please consult your tax professional. However, as of August 2024, typical exemption/refund rates are as follows:
- Sales Tax = 5.75% exemption (from the full 13.00%) for a net tax due of 7.25%. This is before district taxes for your area are added to that rate.
- CA Excise Tax Exemption = 45.4 cents per gallon
- Fed Excise Tax Refund = 24.4 cents per gallon
- Documentation for Your Tax Professional To determine if you qualify for these exemptions, you’ll need to provide your tax professional with the following:
- Proof of diesel purchases used in off-road equipment
- Documentation of the specific usage of the diesel fuel
- Any relevant invoices or receipts
- Details on the equipment or machinery where the diesel was used
- Forms Your Tax Professional Will Use If you qualify for these exemptions & refunds, your tax professional will help you complete the following:
- CA Sales Tax Exemption Form #CDTFA-230-R1. (This will be completed and returned to Greg’s Petroleum Service).
- CA Excise Tax Exemption Form for Off-Road Purchases from Greg’s Petroleum Service. (This will be completed and returned to Greg’s Petroleum Service.)
- Federal Excise Tax Refund Request Form #8849. (This will be completed by your tax professional and submitted to the IRS. The IRS will then send the refund directly to you.)
Why Act Now? Maximizing your savings is important, and we want to ensure you’re not leaving money on the table. By reviewing your diesel usage and confirming your eligibility, you could benefit from these exemptions.
Next Steps:
- Gather the necessary documentation listed above.
- Schedule a meeting with your tax professional to discuss potential eligibility.
- Act quickly to take advantage of these savings.
Please remember that while we’re providing this information to assist you, it’s crucial that you verify everything with your tax professional to ensure compliance and accuracy.
Thank you for your continued partnership. If you have any further questions, please consult your tax professional directly.
Click the links below to download the following forms:
- 2024 Certification of Off-Road Use for Clear Diesel Purchases – CA Excise Tax
- CDTFA 230-R-1 – CA Sales Tax Exemption for Off-Highway Use
- IRS Form 8849 – Claim for Refund of Federal Excise Taxes
- IRS Form 8849, Schedule 1 – Nontaxable Use of Fuels
For information on CDTFA’s tax programs, see CDTFA’s website at https://www.cdtfa.ca.gov/ or call 1-800-400-7115.
*All information provided in this document was gathered from the CDTFA & IRS websites and forms. Greg’s Petroleum Service is not responsible for customer tax decisions. Again, please consult with your tax professional to determine your eligibility.