Tax 4.11(2)(a)(a) All fuel dyed in accordance with the federal internal revenue service temporary regulations, 26 CFR 48.4082-1T, 2T, 3T and 4T, is treated as destined for exempt use and is exempt from the motor vehicle fuel tax. Tax 4.11(2)(b)(b) Dyed diesel fuel shall only be used for exempt purposes. Tax 4.11 NoteExamples: 1) Diesel fuel used as heating oil has an exempt purpose.
Tax 4.11 Note2) Diesel fuel used for nonhighway use has an exempt purpose.
Tax 4.11 Note3) Diesel fuel used in trains has an exempt purpose.
Tax 4.11 NoteNote: This section interprets s. 78.01 (2p), Stats. Tax 4.11 HistoryHistory: Emerg. cr. eff. 4-1-94; cr. Register, November, 1994, No. 467, eff. 12-1-94. Tax 4.12Tax 4.12 Uncollected motor vehicle fuel taxes and repossessions. Tax 4.12(1)(1) Purpose. This section clarifies when and how a supplier required to be licensed by the department may recover the motor vehicle fuel tax from the department when a purchaser is unable to pay the tax to the supplier. This section also clarifies when and how a wholesaler distributor may recover the motor vehicle fuel tax from the department when the wholesaler distributor is unable to collect the tax from another wholesaler distributor or a retail dealer. Tax 4.12(2)(2) Statutes. Under s. 78.01 (2s), Stats., a supplier is not liable for the tax on motor vehicle fuel when the supplier is unable to recover the tax from a purchaser. With proper documentation, the supplier may claim a tax deduction on a later remittance of taxes. A wholesaler distributor may file a refund claim with the department to recover the tax on uncollectable accounts covering sales to other wholesaler distributors and retail dealers. Tax 4.12(3)(a)(a) Tax imposed. A supplier shall pay the motor vehicle fuel tax to the department by the 15th day of the month after the month in which the fuel is received, as described in s. 78.07, Stats., irrespective of whether the sale is for cash or credit. Tax 4.12(3)(b)1.1. ‘Deduction from measure of tax.’ A supplier is relieved from the liability for motor vehicle fuel tax on accounts which have become worthless and which have met the requirements to be charged off for income or franchise tax purposes. The bad debt tax deduction shall be reported and claimed on the supplier’s monthly tax report for the month in which the account becomes worthless. However, if a supplier is out of business when the account becomes worthless, a bad debt deduction may be claimed on the last return filed by that business or through a refund claim filed with the department. A wholesaler distributor may claim a bad debt tax deduction for the amount of tax liability for motor vehicle fuel tax on sales to other wholesaler distributors or retail dealers on accounts which have become worthless and which have met the requirements to be charged off for income or franchise tax purposes by filing a refund claim with the department. A claim for refund relating to a worthless account must be filed within 4 years of the 15th day of the 4th month following the close of the supplier’s or wholesaler distributor’s calendar or fiscal year within which the account becomes worthless. Tax 4.12 NoteExamples: 1) An account of a supplier who is still in business becomes worthless and meets the requirements to be charged off for income or franchise tax purposes on January 10, 2011. The supplier may claim a bad debt deduction on the motor vehicle fuel tax return, form MF-002, filed for the month of January 2011, even though the bad debt deduction may not be claimed for income or franchise tax purposes until the 2011 income or franchise tax return is filed in 2012.
Tax 4.12 Note2) Assume the same facts as in Example 1, except the account is that of a wholesaler distributor. Irrespective of when the wholesaler distributor files the income or franchise tax return on which the bad debt deduction is claimed, the wholesaler distributor may file a claim for refund to recover the uncollected motor vehicle fuel tax any time between January 10, 2011 and April 15, 2016.
Tax 4.12(3)(b)2.2. ‘Recovery of bad debts charged off.’ If a bad debt deduction has been claimed by a supplier or wholesaler distributor for an account found worthless and charged off and the account is thereafter in whole or in part collected by the supplier or wholesaler distributor, the bad debt deduction shall be repaid to the department. A supplier shall report the amount so collected in the first tax report, form MF-002, filed after the collection, and the tax on the amount collected shall be paid with the report. A wholesaler distributor shall file a corrected refund claim and pay the tax collected within 30 days of collection. Tax 4.12(3)(b)3.a.a. A deduction may only be claimed for the unpaid amount of tax on an account found worthless and charged off. The total amount charged off may include the cost of the fuel, interest, financing or insurance costs in addition to the tax amount. To determine the unpaid amount of tax to be deducted, all payments and credits to the account shall be prorated to the various components of the total amount that the purchaser contracted to pay. Tax 4.12 NoteExample: At the time when the tax rate is 30.9¢ per gallon, Supplier A sells 8,000 gallons of gasoline to Company B. Company B has an agreement with Supplier A to delay payment of the tax. The amount of the contract is $12,942, consisting of tax, $2,472, and the cost of fuel, $10,470. Company B defaults and discontinues operations, leaving a balance due Supplier A of $2,100, which includes interest of $200 not included in the contract amount. The deductible tax loss is $363, computed as follows:
Tax 4.12(3)(b)3.b.b. No deduction may be allowed for expenses incurred by a supplier or wholesaler distributor in attempting to collect any account receivable, or for that portion of a debt recovered that is reclaimed by or paid to a third party as compensation for services rendered in collecting the account. Tax 4.12(3)(b)4.4. ‘Special situations.’ A purchaser of receivables may not claim a bad debt deduction for the motor vehicle fuel tax on receivables that subsequently become worthless. Tax 4.12(3)(b)5.5. ‘Repossessions.’ When motor vehicle fuel is repossessed a tax deduction may be allowed only to the extent that the supplier or wholesaler distributor sustains a net loss upon which tax was paid. Tax 4.12(3)(c)(c) Tax rate change. If a deduction for uncollectible tax is claimed in a period when the tax rate is different from the tax rate in effect when the tax was reported on the tax report, an adjustment to the gallons claimed shall be made to compensate for the tax rate differential. The number of gallons to claim is computed by dividing the old tax rate by the new tax rate and multiplying that percentage by the gallons sold. Tax 4.12 NoteExample: If tax was reported on an 8,000 gallon sale when the tax rate was 23.2¢ per gallon and a deduction was taken at a 24¢ rate, only 7,733 gallons may be claimed on the monthly supplier’s tax report; [23.2 24] x 8,000 = 7,733.
Tax 4.12 HistoryHistory: Emerg. cr. 4-1-94; cr. Register, November, 1994, No. 467, eff. 12-1-94. Tax 4.50Tax 4.50 Assignment, use and reporting of document number. Each shipment, transfer, purchase or sale of a petroleum product which is reportable to the department in accordance with ch. 78, Stats., shall bear a “document number.” In this section “document number” means the number provided for in subs. (1) through (4), as follows: Tax 4.50(1)(1) Assignment. Except as provided in sub. (4), the assignment of a document number shall originate with and be assigned by the refiner, terminal operator or place of manufacture where the fuel is loaded. All subsequent transactions, invoices and reports regarding each respective shipment shall use and make reference to this number. Tax 4.50(2)(2) Railway tank car shipments. On all railway tank car shipments the tank car initials and number shall become the document number. Tax 4.50(3)(3) Truck transport shipments. On all truck transport shipments the manifest number shall become the document number. Tax 4.50(4)(4) Other shipments. On all other types of shipments, which do not originate at a refinery, terminal or place of manufacture, the shipper shall assign the invoice number as the document number. An invoice number may not be assigned by a shipper as the document number in any case where tank car initials and number or a truck transport manifest number is involved. Tax 4.50 NoteNote: This section interprets ss. 78.77, Stats. Tax 4.50 HistoryHistory: 1-2-56; am. Register, June, 1975, No. 234, eff. 7-1-75; renum. to be (intro.) and am., cr. (1), (2), (3) and (4), Register, June, 1983, No. 330, eff. 7-1-83; emerg. am. eff. 4-1-94; am. Register, November, 1994, No. 467, eff. 12-1-94. Tax 4.51Tax 4.51 Measuring withdrawals. All withdrawals of motor vehicle fuel from Wisconsin refineries, marine terminals or pipeline terminals shall be measured in liquid gallons by accurate meters; however, it is not necessary to meter withdrawals into railway tank cars. Tax 4.51 NoteNote: This section interprets ss. 78.12, Stats. Tax 4.51 HistoryHistory: 1-2-56; emerg. am. eff. 4-1-94; am. Register, November, 1994, No. 467, eff. 12-1-94. Tax 4.52Tax 4.52 Separate schedules. Separate schedules shall be filed for each Wisconsin refinery, marine terminal or pipeline terminal. Tax 4.52 NoteNote: This section interprets ss. 78.12, Stats. Tax 4.52 HistoryHistory: 1-2-56; emerg. am. eff. 4-1-94; am. Register, November, 1994, No. 467, eff. 12-1-94. Tax 4.53Tax 4.53 Certificate of authorization. Tax 4.53(1)(1) Statutes. An alternate fuel dealer may be authorized by an alternate fuel user, if the alternate fuel dealer agrees, to report and pay the tax on alternate fuel delivered into a bulk storage facility of the user. The user then is not required to obtain an alternate fuel license from the department. Tax 4.53(2)(a)(a) A certificate of authorization, form MF-207, may be executed by a purchaser of alternate fuel to request a supplier of alternate fuel to bill the purchaser for both the alternate fuel and the alternate fuel tax. Tax 4.53(2)(b)(b) A certificate of authorization executed by a supplier of alternate fuel indicates the supplier’s acceptance of the purchaser’s request to bill the alternate fuel tax on bulk deliveries and remit it to the department. Tax 4.53(3)(a)(a) If a purchaser and seller of alternate fuel agree that the seller will collect the alternate fuel tax from the purchaser and remit it to the department, the purchaser is not required to obtain an alternate fuel license from the department nor to submit monthly reports of tax liability. Tax 4.53(3)(b)(b) The supplier shall compute the monthly tax liability by adding the number of gallons of alternate fuel placed in storage facilities where purchasers have executed certificates of authorization to the number of gallons of alternate fuel placed in fuel supply tanks of motor vehicles. Tax 4.53 HistoryHistory: Cr. Register, December, 1980, No. 300, eff. 1-1-81; emerg. am. eff. 4-1-94; am. Register, November, 1994, No. 467, eff. 12-1-94. Tax 4.54(1)(1) General. Under ss. 78.11, 78.48 (9) and 78.57 (9), Stats., the department may require motor vehicle fuel, alternate fuel and general aviation fuel taxpayers to deposit security with the department. This security may be required before or after the fuel tax license is issued. The amount of security determination shall be made by the department. If any person fails or refuses to place the security, the department may refuse to issue the license or may revoke the license. Tax 4.54(2)(a)(a) In determining whether security shall be required and the amount of security to be required, the department shall consider all relevant factors, including: Tax 4.54(2)(a)1.1. Evidence of adequate financial responsibility. The evidence may include a person’s assets and liabilities, liquidity of assets, estimated expenditures and potential fuel tax liability. Tax 4.54(2)(a)2.2. The person’s prior record of filing tax returns and paying taxes of any kind with the department. Tax 4.54(2)(a)3.3. Type of entity making the sales of motor vehicle fuel, alternate fuel and general aviation fuel. Tax 4.54 NoteExample: A sole proprietor or partner having nonbusiness financial resources may be a better risk than a corporation having limited assets.
Tax 4.54(2)(b)(b) Although the individual factors listed in par. (a) shall be considered in determining security requirements, each case shall be determined on its merits as evaluated by the department. Protection of the fuel tax revenues shall be the major consideration in determining security requirements. However, due consideration shall be given to reasonable evidence that security is not necessary. Tax 4.54(2)(c)(c) In instances in which the department determines security in excess of $1,000 is required, notification of this requirement shall include a written statement clearly describing the reasons for the requirement and a description or calculation showing how the amount of the security requirement was determined. Tax 4.54(3)(3) Types of security. Acceptable types of security include noninterest-bearing cash, certified check, money order, or surety bonds issued by authorized underwriters. Tax 4.54(4)(a)(a) If security is required, the amount shall be equal to the depositor’s average quarterly Wisconsin fuel tax liability increased to the next highest even $100 amount, unless the department determines under sub. (2) that for good cause a higher amount is appropriate. The estimate of the depositor’s average quarterly fuel tax liability shall be based on whichever of the following the department considers most appropriate in the circumstances: Tax 4.54(4)(a)3.3. The estimated tax liability shown on the application for a license. Tax 4.54(4)(a)4.4. Other factors, such as the department’s estimate of tax liability based on its experience with other similar activities. Tax 4.54(4)(b)(b) If at the time of the security review the person has an outstanding fuel tax delinquency, the delinquent amount shall be added to the estimated average quarterly fuel tax liability and the sum of the two shall be the amount of security required. Tax 4.54(5)(a)(a) Any security deposited shall be returned to the taxpayer if the taxpayer has, for 24 consecutive months, complied with all the requirements of ch. 78, Stats. Tax 4.54(5)(b)(b) The 24-month compliance requirement described in par. (a) shall begin on the day the deposit is received by the department. Tax 4.54(5)(c)(c) Within 30 days after the conclusion of the 24-month period described in par. (a), the department shall review the taxpayer’s compliance record. If the taxpayer has complied with ch. 78, Stats., the department shall within 60 days after the expiration of the 24-month period certify the deposit for refund. Tax 4.54(5)(d)3.3. No penalties due to negligence or fraud are assessed for filing periods within the 24-month compliance period. Tax 4.54(5)(d)4.4. No assessment of additional tax, interest or other charges for filing periods within the 24-month compliance period is unpaid at the end of the period. Tax 4.54(5)(d)5.5. No delinquencies of fuel tax, interest or other charges imposed under ch. 78, Stats., exist with the department. Tax 4.54(5)(e)(e) If a taxpayer does not meet the compliance requirements set forth in par. (d), the deposit shall be retained by the department until the taxpayer is in compliance for 24 consecutive months from the date of the latest incident of noncompliance. Tax 4.54 HistoryHistory: Cr. Register, September, 1991, No. 429, eff. 10-1-91; emerg. am. (1), (2) (a) (intro.) and 3., (b), (3) (b), (4) (a) (intro.), (5) (b), (c), (d) 3. to 5., eff. 4-1-94; am. (1), (2) (a) (intro.) and 3., (b), (3) (b), (4) (a) (intro.), (5) (b), (c), (d) 3. to 5., Register, November, 1994, No. 467, eff. 12-1-94; CR 22-044: am. (2) (c), consol. (3) (intro.) and (a) and renum. to (3) and am., r. (3) (b) Register June 2023 No. 810, eff. 7-1-23. Tax 4.55Tax 4.55 Ownership and name changes. Tax 4.55(1)(1) General. Under ss. 78.10 (6), 78.48 (6) and 78.57 (6), Stats., a fuel tax license is not transferable to another person or to another place of business. This section clarifies when a change in ownership or name of a business requires a new fuel tax license. Tax 4.55(2)(a)(a) When there is a change in ownership of a business, the new owner shall apply for a new license using form MF-100, except as provided in par. (c). The new owner shall notify the department no later than 10 days prior to the change. Security may be required as provided in s. Tax 4.54. Tax 4.55 NoteNote: Form MF-100 is available on the department’s web site at www.revenue.wi.gov.
