Special Fuel Tax Exemption Certificate

Purpose

The purpose of the Special Fuel Tax Exemption Certificate is to enable the certificate holder to purchase certain fuel without paying the Maryland Motor Fuel Tax. The certificate holder then does not have to apply for a refund of motor fuel taxes on fuel used in a tax-exempt manner. Exemption certificates are only issued to persons maintaining fixed bulk storage for special fuels. A special fuel is any fuel other than gasoline, which is sold for use in motor vehicles. This exemption applies only to Maryland motor fuel taxes, and it does not apply to Maryland sales and use taxes or federal excise taxes. About 7,700 exemption certificates were active as of January 2003. Exemption certificates are not valid for retail fuel purchases.

Authority

STATE: Tax-General Article, Title 9, Subtitle 3, Annotated Code of Maryland; COMAR 03.03.01

Requirements

PREAPPROVAL: An applicant must possess a valid Special Fuel User or Seller License from the Comptroller's Office or own fixed bulk storage for special fuel. An application must include the following information:

• The applicant's legal name and address;
• The applicant's federal identification number;
• Type of ownership and type of business;
• Types of fuel used or sold;
• Number of highway and non-highway vehicles;
• Corporate officer information; and
• Location of any bulk storage.

POST APPROVAL: Exemption certificates are renewable annually. A person who possesses a Special Fuel User or Sellers License must file monthly reports, pay taxes on time and file an annual surety bond prior to the exemption being renewed. An exemption may be canceled for cause any time during the year for non-compliance with applicable laws or regulations. When exemptions are canceled for cause all special fuel purchases become taxable and the tax is not refundable.

Other Approvals

A bulk storage tank may require the approval of the local planning and zoning board, the State Fire Marshall's office, the Maryland Department of Environment and, depending on location, the United States Coast Guard.

Application Process

1. An applicant submits an application.
2. The Comptroller of Maryland determines the exemption classification to which the applicant is entitled.
3. The exemption certificate is mailed to the applicant.
4. Upon receipt of the exemption certificate, the applicant gives the assigned exemption certificate number to the fuel supplier each time fuel is obtained.
5. The effective date of an exemption number is never backdated.

Processing Time
AVERAGE: 3 days

Fee
None

Appeals

A person may appeal cancellation of an exemption to the appropriate circuit court within 30 days.

Contact:
Karen Hepburn
mailto:khepburn@comp.state.md.us
MATT Regulatory Division
Motor Fuel Tax Office
P.O. Box 1751
Annapolis, MD 21404-1751
Licensing and Registration
(410) 260-7217
FAX (410) 974-3129