links to road tax forms for wmo or biodiesel

[Uglydog56]

A while back Scott had mentioned running WMO in his bus.  It was discussed that road tax needed to be paid somehow.  Here's what I found:  First, you have to register with the feds using this form:

http://www.irs.gov/pub/irs-pdf/f637.pdf

It's free but you have to send them quarterly paperwork showing amount of fuel mixed and used and some other stuff I'm still researching.  I THINK you use form 2290 for that, but I'm still looking into it.  You may have to register a sole proprietorship business in order to do this.  Once again, I'll have more later on this.

Once you get your federal fuel blender's license, you apply for the state license.  You need the federal one to get the state one.  Here's Washington's, which is also free, however you have to pay $50 per person in your company for a background check on each fuel blending individual:

http://www.dol.wa.gov/forms/441750.pdf

Scott, here's is North Carolina's.  My understanding is they are really cracking down on this and taxed weight stuff to generate revenue:

http://www.dornc.com/downloads/gas1262_mfapp.pdf

Here is Carolina monthly form with instructions:

http://www.dornc.com/downloads/gas1260.pdf

In Carolina you have to send the state paperwork off monthly by the 22nd, even if you use or produce no fuel that month.  In Washington it's the 25th.

So a bit of a paperwork hassle.  But not impossible.

Also, I understand there are several opinions on the viability of wmo.  This post was not created to debate that.  It was to help people who chose to use it stay legal.

As far as my "additives" loophole - if it doesn't look green when the inspector dips the tank, it's not an additive, it's fuel.  You have to pay the fine first, then prove you weren't liable somehow later and hope for a refund.  So you are better off having a good set of books and to register for the blender license first.

The WA excise tax department owes me a call with answers on what happens when we cross state lines with wmo/wvo/biodiesel in the tank, and how to fill out the forms if we aren't a business.  Will follow up with updates as I learn more.

Also there is a federal tax credit of .50 per gallon for biodiesel.  Also, some states don't tax biodiesel if usage is under a certain amount, 500 gal/qtr was a number I saw a few different places on the internet (and we all know if it's on the internet, it true, right?)  So check your state's requirements.

[buswarrior]

Excellent research work!

As frustrating as it might be to find out, ignorance is not bliss when it goes wrong.

Best a newbie blender busnut knows the consequences, if certain paths are followed.

happy coaching!
buswarrior

[Jeremy]

I know less than nothing about the US situation on this of course, but for what it's worth I understand that the equivalent regulations here have now been relaxed to exempt people covering below a certain annual mileage. And it's quite a generous mileage allowance I believe. I just mention it in case there may be some similar exemption in your scheme, or maybe one coming.

Jeremy

[Uglydog56]

I just got off the phone with the WA excise tax auditor.  She said since I'm using the fuel myself, and not selling, and was not a business, that I didn't need to register with them since they have no way of collecting at this time.  She said the amount of revenue not collected by an rv on wmo was so low she wasn't going to pursue it either, so I didn't need to worry about it.  However, the EPA may have something to say about wmo as fuel and whether it meets fuel standards, so I have left a message with the diesel emissions coordinator for western Washington and we will see what he has to say next.

I do know that North Carolina (which I am personally interested in since I am moving there next spring) does require you to register and pay the fiddler and whatnot whether you are a business or not.

[Uglydog56]

Here is the correct federal form for reporting quarterly fuel tax liability:

http://www.irs.gov/pub/irs-pdf/f720.pdf

Here are instructions.  There is an efile option available to "simplify":

http://www.irs.gov/pub/irs-pdf/i720.pdf

[Sean]

Since exemptions were mentioned, I can tell you that the feds allow you the first 400 gallons annually of personally made biofuel tax-free.  After that, you pay the tax.  AFAIK, there is no such exemption for WMO or other waste oils, only bio fuels such as WVO.

States are all over the map.  Some follow along with the federal exemption, some have no exemption at all, and others have no way to collect for personally made fuels, as Rick discovered with WA.

FWIW.

BTW, this "pay the unpaid road tax" thing works both ways.  If you end up burning taxed (undyed) diesel fuel in something other than a highway engine, you can apply on your federal return to get the tax back.  We have only a single diesel tank which feeds not only the Detroit but also the generator and the Webasto.  I have hour meters on both and I submit paperwork to get the federal (but not state) tax back on all the diesel I burn in those each year.

-Sean
http://OurOdyssey.BlogSpot.com

[Uglydog56]

Amplification of procedure for federal fuel tax procedure.  I know not a lot of people here are terrifically interested in this, I'm just putting all the information in one place.

IRS Pub 510 explains everything about the fuel tax process and it's requirements.  It tells you that you must register as a fuel blender.  Interestingly, there is a 10% tax on tanning bed use, and a 11% tax on bows (like for archery) with >30# draw.  It also is the reference for the fact that you do not have to pay fuel tax to the federal govt if your untaxed portion of your fuel blend is less than 400 gal per calender quarter.

http://www.irs.gov/pub/irs-pdf/p510.pdf

Procedure:

1)  You must have a FEIN.  Federal Employer Identification Number.  If you are already a business owner, and your diesel powered highway vehicle is not property of the business but in your name, you need a separate one.  This is free to do, and only takes a few minutes over the phone.  The IRS people are much more friendly when you are trying to pay tax than when you are trying to get out of it.   If you want to do this online or through the mail, here is the form.  I did a sole proprietorship.

http://www.irs.gov/pub/irs-pdf/fss4.pdf

2)  Once you have the FEIN, you fill out and send in IRS form 637.  Once again, this is free except for the stamp.  The government will send you the registration letter with your fuel blender's license.  You aren't legal until you have the form back; a copy of a sent-in 637 won't get you out of a fine.

http://www.irs.gov/pub/irs-pdf/f637.pdf

3)  Once you are a licensed fuel blender, you have to send in a quarterly form (IRS form 720) documenting the fuel blended and the tax owed.  You need to have documentation of amount of fuel produced and used and stuff, it's in the instructions for the form 720 what you need to have records of.  Even if it is zero, you have to send in the form.  Now here is where the govt made me laugh.  You can use up to 400 gal / quarter without paying fuel tax, remember?  You only have to pay taxes on the amount above this.  Also, because the government doesn't want a billion 720's with zero's on them, if your tax liability is zero (blended <400gal wmo this quarter) and you expect it to be zero in the future, you mark the form 720 as final, and you don't have to send it in anymore.  You do have to have records proving you are blending fuel under 400 gal per quarter, so the logbook doesn't go away.  But, as long as you are under 400 gal per quarter, no federal tax!

http://www.irs.gov/pub/irs-pdf/f720.pdf

So, to summarize, get a FEIN via SS-4, send in form 637, send in a 720 marked as final showing zero, and use & retain a log of your fuel blending activities, being sure not to make over 400 gal (the 400 is the wmo part, not mix total).  There you have it.  It was a slow day at work yesterday in case you haven't guessed.