Diesel User Claim for Refund – Frequently Asked Questions (FAQs) – Filing Claims for RefundOpen All Close All
I. Licensing and Forms
Do I need to have an account number with the CDTFA to file a claim for refund of tax paid on diesel fuel used for nontaxable purposes?
Yes. You must apply for a diesel user (DU) account number before you can file a claim for refund. In addition, first-time DU filers will be asked to submit a completed form CDTFA-32, Diesel Fuel Tax Claim for Refund Questionnaire. Diesel fuel suppliers and ultimate vendors may also claim a credit/refund on Schedule S03A that is filed with form CDTFA-501-DD, Supplier of Diesel Fuel Tax Return, and form BOE-770-DV, Diesel Fuel Ultimate Vendor Report/Claim for Refund, respectively.
You can register for a DU account using the CDTFA online registration system.
What form do I use to file a claim for refund of tax paid on diesel fuel used for nontaxable purposes?
You must use form BOE-770-DU, Diesel Fuel Claim for Refund on Nontaxable Uses.
The records you are required to provide depends on the reason for the claim. Generally, you must be able to show that you paid tax on the diesel fuel and used the fuel in a nontaxable manner. Examples of acceptable documentation include inventory records, fuel logs, purchase receipts or invoices, tank or meter readings, and worksheets showing the calculations or formulas used to determine claimed nontaxable usage. We may request additional information when we review your claim for refund.
No. However, please submit copies of purchase invoices with the first claim you file. After that, we generally ask for copies as needed. In order to receive a refund, you must provide invoices upon request.
I have a bulk tank that I use to fuel my vehicles and equipment. Do I need to provide an inventory reconciliation worksheet with my claims?
Yes, you will need to submit a diesel fuel inventory reconciliation worksheet. You must provide the beginning inventory measurement as of the beginning of the claim period, the gallons placed into the tank during the claim period, the gallons dispensed from the tank during the claim period, the book ending inventory, and the actual ending inventory measurement. You may use your own format for presenting the information. Make sure to include the date and time that the inventory measurements were taken.
III. Types of Claims
No. You do not pay the diesel fuel tax when purchasing dyed diesel fuel. However, dyed diesel fuel may only be used to operate vehicles or equipment off-highway. You will owe tax on the dyed diesel gallons and may be subject to a dyed diesel fuel penalty if you operate a motor vehicle on a highway in California with dyed diesel fuel in the fuel tank.
Yes. Diesel fuel consumed to operate reefer units is a nontaxable use. However, you must provide detailed documentation of the fuel placed in a reefer unit that has a separate fuel tank and records of hour meter readings for a reefer unit that shares a fuel tank with the vehicle.
I lease diesel-powered vehicles for periods greater than 30 days to owner-operators. Why can't I include the owner-operators' off-highway and auxiliary equipment gallons in my DU claim for refund when I can include these gallons in my International Fuel Tax Agreement (IFTA) return?
Diesel fuel tax can be refunded only to the person or entity that purchased and used the fuel. If your owner-operators pay for their own diesel fuel, either directly or by way of settlement, you are not eligible to claim a refund of the tax. Since owner-operator gallons are paid for and used by the owner-operators themselves, these operators must file a claim for refund for their nontaxable uses. Payment of the IFTA taxes is governed by the IFTA Articles of Agreement section R530.200, which provides that, under long-term leases, the lessor and the lessee may designate which party will report and pay the tax. The IFTA agreement does not extend to DU claims for refund.
How will California's Commercial Vehicle Idling Regulations' "five-minute idle" rule affect my DU claims for off-road idling?
Off-highway idle claims will be limited to five minutes per event unless the event is documented as waiting in line to load/unload. If safe-harbor percentages are used to calculate the amount of the refund, no additional refund will be allowed for diesel fuel used to operate auxiliary equipment while idling. Additional information on the "five-minute idle" rule is available at the California Air Resources Board Website.
No. However, we will refund the tax paid on diesel fuel that is lost in the course of handling, transportation, or storage under certain circumstances. See Regulation 1433 Refund of Tax on Diesel Fuel Lost in the Course of Handling, Transportation, or Storage.
I own a rental company and charge my customers a daily rental plus a charge to refill the equipment fuel tank when the equipment is returned. May I claim a refund for the tax on fuel used in this off-road equipment?
No. You may not claim a refund for the tax, but your customers can. The refund is due to the person that paid for the fuel and used the fuel off-highway.
IV. Types of Claims
Yes. For transactions occurring on and after April 1, 2016, Regulation 1432, Other Nontaxable Uses of Diesel Fuel in a Motor Vehicle provides safe-harbor percentages, which are presumed amounts of diesel fuel used to operate auxiliary equipment. Safe-harbor percentages must be applied to diesel fuel consumption by auxiliary equipment type. Off-highway use is included in the safe-harbor percentages.
If your claim for refund is not based on safe-harbor percentages as provided in Regulation 1432, you must submit a specific fuel consumption test conducted by you and approved by the CDTFA. See Regulation 1432 for further information.
I need to conduct a fuel consumption test to support my nontaxable usage. What steps do I have to take before I can begin testing?
The CDTFA recommends that you submit a written test proposal for review and approval before you begin testing. The CDTFA advises that you do not conduct your test until you receive approval from the CDTFA.
For transactions occurring on and after April 1, 2016, you may claim exempt diesel fuel consumption without conducting a fuel consumption test. See BOE-496, Safe Harbor Percentage Table, for safe-harbor percentages allowed.
You may send your test proposal to: California Department of Tax and Fee Administration, Appeals & Data Analysis Branch, MIC: 33, P.O. Box 942879, Sacramento, CA 94279-0033.
Test proposals should be very detailed and include, but not be limited to, the following: (a) description of the nontaxable use or activity to be tested; (b) test methodology; (c) list of vehicles to be tested and explanation as to why the selected vehicles are representative of the company's fleet; (d) test duration; (e) seasonal fluctuations that may affect the test periods, if applicable; (f) list of routes to be tested and description of route density variations, if applicable; (g) fueling method and list of locations where vehicles will be fueled; (h) explanation as to why the proposed tests are representative of the company's business operations; (i) sample of daily test log that will be used to record test data; and (j) description of how the test results will be applied in the calculation of nontaxable percentages.
If you have any questions regarding the information you need to include in your test proposal, please call the Appeals & Data Analysis Branch at 1-916-445-2988, open on weekdays from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.