Motor Vehicle Fuel and Diesel Fuel Tax
In California, the state collects excise taxes from gasoline and diesel suppliers before they deliver fuel to retail stations. An excise tax is a tax directly levied on certain goods by a state or federal government.
How To Use This Guide
The Getting Started page provides information about the licenses required, registration, returns (including forms, schedules, reports, and templates), account maintenance, and other fuel information businesses may need.
The Diesel Fuel & Motor Vehicle Fuel Supplier, Ultimate Vendor, Exempt Bus Operator & Government Entity and Biofuels pages provide detailed information specific to each person involved in the diesel fuel supply chain.
See the Industry Topics page for helpful information and references.
The Refund Claims page contains information specific to diesel fuel and MVF refund claims.
Please see the Resources page for resources related to the fuel industry.
Imposition of Tax—Diesel Fuel & Motor Vehicle Fuel (MVF)
The Motor Vehicle Fuel Tax Law (MVFTL) and the Diesel Fuel Tax Law impose excise taxes on gasoline and diesel fuel when any of the following events occur:
- Removal at the refinery or terminal rack.
- Entry into the state.
- Sale to an unlicensed person.
- The removal or sale of blended motor vehicle fuel or diesel fuel in this state by the blender thereof.
See the Diesel Fuel & Motor Vehicle Fuel Suppliers page for more information on the imposition of tax to the various categories of suppliers.
The Diesel Fuel Tax and Motor Vehicle Fuel Tax Laws also contain a backup tax.
The Diesel Fuel backup tax is imposed on the delivery into the fuel tank of a diesel-powered highway vehicle of: any diesel fuel that contains dye; any diesel fuel on which a claim for refund has been allowed; or any liquid on which tax has not been imposed by the Diesel Fuel Tax Law, MVF tax law, or Use Fuel Tax Law. The Diesel Fuel backup tax is also imposed on the sale of any diesel fuel on which a claim for refund has been allowed.
The MVF backup tax is imposed on the delivery into the fuel tank of a motor vehicle fuel-powered highway vehicle of: any motor vehicle fuel on which a claim for refund has been allowed; or any liquid on which tax has not been previously imposed under the MVF tax law, Diesel Fuel Tax Law or Use Fuel Tax Law. The MVF backup tax is also imposed on the sale of any motor vehicle fuel on which a claim for refund has been allowed.
How the Revenue is Used
The diesel fuel tax revenue is deposited into the Motor Vehicle Fuel Account in the Transportation Tax Fund to pay the refunds authorized by the Diesel Fuel Tax Law. The balance of the revenue is transferred by the Controller to the Highway Users Tax Account, which is then transferred to the State Highway Account, and local shares are transferred to the city and county road funds to construct and maintain public roads and mass transit systems. For further information regarding transportation funding and apportionments, visit the California Department of Transportation's Transportation Funding in California webpage.
The motor vehicle fuel tax revenue is also deposited into the State Transportation Fund. Allocations are made from the fund to the Aeronautics Account, Harbors and Watercraft Revolving Fund, Off-Highway Vehicle Trust Fund, Highway Users Tax Account, and Department of Food and Agriculture Fund. Revenues from this program are used to construct and maintain public roads and mass transit systems, airports, and waterways.