Information Release

CAT 2005-18 - Commercial Activity Tax: Temporary Motor Fuel Exemptions from the Commercial Activity Tax - Issued November 2005; Revised February 2006; Revised July 2007

The purpose of the July 2007 revision is to address the impact of Am. Sub. H.B. 119 on temporary motor fuel exemptions from commercial activity tax (in red, below). No other revisions were made to the release.

This rule addresses the temporary motor fuel exemptions from the commercial activity tax that were granted in Am. Sub. H.B. 66. This rule is now final and effective. Please direct any questions to the Commercial Activity Tax Division of the Ohio Department of Taxation at 1-888-722-8829.

Please note that Am. Sub. H.B. 119 did not extend the temporary commercial activity tax exemption for receipts from the sale of certain motor fuel. Therefore, this temporary exemption does not apply to receipts from motor fuel sold on or after July 1, 2007.

Rule 5703-29-12 Temporary motor fuel exemptions from the commercial activity tax.

(A) Gross receipts received prior to July 1, 2007 from the sale of motor fuels are exempt from the commercial activity tax.  For purposes of this rule, “motor fuel” means “motor fuel” as defined in section 5735.01 of the Revised Code that is also intended to be used on the public highways. This rule provides guidance to refineries, terminals and motor fuel dealers as to the types of gross receipts that are taxable and exempt under the commercial activity tax. This rule provides a prima facie procedure that all refineries, terminals, and motor fuel dealers shall use to determine the types of taxable gross receipts that are temporarily exempt from the commercial activity tax. This burden may be rebutted based on the refinery, terminal, or motor fuel dealer showing evidence to the contrary.

(B) Some otherwise-exempt products sold by a refinery are used in a taxable manner, i.e. not intended to be used as motor fuel. The tax commissioner shall use the following percentages as indicative of the exempt amounts of taxable gross receipts for the corresponding products for commercial activity tax purposes. These exemptions include the following percentages:

(1) All octanes of gasoline, including gasoline blends: Ninety-nine and eighty-nine hundredths per cent (99.89%)

(2) Kerosene (number one fuel): Eight and forty-eight one-hundredths per cent (8.48%)

(3) Number two diesel fuel: Ninety-six and sixty-four one-hundredths per cent (96.64%)

(4) Gasoline used as aviation fuel: Eleven one-hundredths of a per cent (0.11%)

(C) Gross receipts from the following products sold by a refinery are subject to the commercial activity tax:

(1) Liquefied petroleum gasoline (propane)

(2) Jet fuel

(3) Heavy fuel oil (number six)

(4) Asphalt

(5) Coke

(6) Any other product not intended to be used as a motor fuel on the public highways

(D) Some otherwise-exempt products sold by a terminal to a motor fuel dealer licensed under Chapter 5735. of the Revised Code are used in a taxable manner, i.e. not intended to be used as motor fuel. The tax commissioner shall use the following percentages as indicative of the exempt amounts of taxable gross receipts for the corresponding products for commercial activity tax purposes. These exemptions include the following percentages:

(1) All octanes gasoline, including gasoline blends: Ninety-nine and eighty-nine one-hundredths per cent (99.89%)

(2) Kerosene (number one fuel): Eight and forty-eight one-hundredths per cent (8.48%)

(3) Number two diesel fuel: Ninety-six and sixty-four one-hundredths per cent (96.64%)

(E) Gross receipts from the following products sold by a terminal are subject to the commercial activity tax:

(1) Liquefied petroleum gasoline (propane)

(2) Jet fuel

(3) Heavy Fuel Oil (number six)

(4) Asphalt

(5) Coke

(6) Any other product not intended to be used as a motor fuel on the public highways

(F) Gross receipts from the following products sold by a motor fuel dealer licensed under Chapter 5735. of the Revised Code are exempt from the commercial activity tax:

(1) All octanes of gasoline, including gasoline blends sold for use as a motor fuel

(2) Kerosene (number one fuel) sold for use or blended and sold for use as a motor fuel

(3) Number two diesel fuel or diesel blends sold for use as a motor fuel

(4) Any other liquid product intended to be used as a motor fuel on the public highways

(G) Anything on which tax is imposed by retail motor fuel dealers intended for use as motor fuel is exempt, regardless of whether the consumer may file a refund. Gross receipts from the following products sold by a motor fuel dealer licensed under Chapter 5735. of the Revised Code are subject to the commercial activity tax:

(1) Liquefied petroleum gasoline (propane)

(2) Jet fuel

(3) Heavy fuel oil (number six)

(4) Fuel oil (number two)

(5) Kerosene sold for use off the highway

(6) Asphalt

(7) Coke

(8) Any other product not intended to be used as a motor fuel on the public highways

(H) Anything on which tax has been imposed for use as motor fuel is exempt, regardless of whether the consumer may file a refund. Gross receipts from the following products sold by a motor fuel retailer licensed under Chapter 5735. of the Revised Code are exempt from the commercial activity tax:

(1) All octanes of gasoline, including gasoline blends       

(2) Number two diesel fuel

(3) Any other product intended to be used as a motor fuel on the public highways