| (a) Definitions. The following words and terms, when
used in this section, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Water-based diesel fuel--a combination of water,
petroleum diesel fuel, emulsifier, and seasonal additives (when necessary)
into an emulsion that is suitable or used for the propulsion of a
diesel-powered motor vehicle.
(2) Fuel grade ethanol--denatured ethanol meeting the
requirements of American Society for Testing and Materials (ASTM)
D-4806 used for blending with motor fuel.
(3) Biodiesel--a fuel that:
(A) meets the registration requirements for fuel or
fuel additives established by the United States Environmental Agency
under Section 211 of the Federal Clean Air Act (42 U.S.C. Section
7545);
(B) is mono-alkyl esters of long chain fatty acids
derived from vegetable oils and animal fats;
(C) meets the requirements of ASTM D-6751;
(D) is intended for use in engines that are designed
to run on conventional, petroleum-derived diesel fuel; and
(E) is derived from agricultural products, vegetable
oils, recycled greases, biomass, or animal fats or the wastes of those
products or fats.
(4) Biodiesel blend--a blend of biodiesel meeting the
requirements of paragraph (3) of this subsection, with petroleum based
diesel fuel.
(5) Renewable diesel--a fuel that:
(A) meets the registration requirements for fuel or
fuel additives established by the United States Environmental Agency
under Section 211 of the Federal Clean Air Act (42 U.S.C. Section
7545);
(B) is a hydrocarbon;
(C) meets the requirements of ASTM D-975;
(D) is intended for use in engines that are designed
to run on conventional, petroleum-derived diesel fuel; and
(E) is derived from agricultural products, vegetable
oils, recycled greases, biomass, or animal fats or the wastes of those
products or fats.
(6) Renewable diesel blend--a blend of renewable diesel
fuel meeting the requirements of paragraph (5) of this subsection,
with petroleum based diesel fuel. A renewable diesel blend may also
be identified as a biomass-based diesel blend.
(b) Diesel fuel tax exception. The tax imposed on diesel
fuel pursuant to Tax Code, §162.201, does not apply to biodiesel,
renewable diesel or to the volume of water, fuel grade ethanol, biodiesel
or renewable diesel that is blended with taxable petroleum based diesel
fuel when the finished product meets the certification requirements
of subsection (f) of this section and is clearly identified on the
sales invoice, storage tank, and retail pump, as required by subsection
(c), (d), or (e) of this section. The tax imposed pursuant to Tax
Code, §162.201, applies to the petroleum-based component of a
renewable diesel blend that is the result of co-processing a renewable
diesel feedstock with a petroleum-based feedstock in the same facility
or refinery processing unit. The portion of the resulting co-processed
product that is exempt from the tax imposed pursuant to Tax Code, §162.201,
as a renewable diesel is equal to the volume of renewable diesel used
as a feedstock. The tax exemption on biodiesel, renewable diesel or
to the volume of water, fuel grade ethanol, biodiesel or renewable
diesel that is blended with taxable petroleum based diesel fuel provided
by Tax Code, §162.204, should be documented in each transaction
so that the exemption is passed to the person ultimately using or
consuming the diesel fuel.
(c) Invoice documentation.
(1) The volume of biodiesel or renewable diesel must
be identified on the sales invoice on each sales transaction, and
must continue to be identified on sales invoices until the product
is sold to the ultimate consumer.
(2) The volume of water, fuel grade ethanol, biodiesel,
or renewable diesel that is combined with taxable petroleum based
diesel fuel must be identified on the sales invoice on each sales
transaction after the water, fuel grade ethanol, biodiesel, or renewable
diesel is first blended with taxable petroleum based diesel fuel,
and must continue to be identified on sales invoices until the blended
product is sold to the ultimate consumer.
(3) A sales invoice must:
(A) identify a water-based diesel fuel, ethanol blended
diesel fuel, biodiesel, renewable diesel, biodiesel blend, or renewable
diesel blend by a commonly accepted commercial or industry name for
the product being sold. For example, B100 for biodiesel or B20 for
a biodiesel blend containing 80% taxable petroleum diesel fuel and
20% biodiesel;
(B) list the volume in gallons (rounded to the nearest
whole gallon) or the percentage (rounded to the nearest whole percentage;
for example 1.4% becomes 1.0% and 1.5% becomes 2.0%) of the blended
product that is water, fuel grade ethanol, biodiesel, or renewable
diesel;
(C) list the volume in gallons (rounded to the nearest
whole gallon) or the percentage (rounded to the nearest whole percentage)
of the blended product that is taxable petroleum based diesel fuel.
Taxable diesel fuel includes emulsifiers and additives, but not water,
fuel grade ethanol, biodiesel, or renewable diesel; and
(D) list the basis of calculating the tax (if a taxable
sale) as either $0.20 for each gallon of taxable petroleum based diesel
fuel in the blended product or a ratable tax rate based on the percent
of taxable petroleum based diesel in the blended product. For example,
the invoice for the sale of 100 gallons that is a blend of 20% biodiesel
and 80% taxable diesel fuel may list: state diesel fuel tax of $0.20
per gallon on 80 gallons taxable diesel fuel and no state tax on 20
gallons biodiesel, or state diesel fuel tax of $0.16 per gallon on
100 gallons of biodiesel blend.
(d) Notice required on storage tank and retail pump.
(1) A notice must be posted in a conspicuous location
on each storage tank and retail pump from which biodiesel or renewable
diesel is stored or sold. The notice must identify the product by
the common industry or commercial name. For example, B100 for biodiesel.
(2) A notice must be posted in a conspicuous location
on each storage tank located outside the bulk terminal/transfer system
and retail pump from which a blend product is stored or sold from
the time that the water, fuel grade ethanol, biodiesel, or renewable
diesel is first blended with taxable petroleum based diesel fuel until
the blended product is sold to the ultimate consumer. The notice must
identify the blended product by the common industry or commercial
name, and state the volume percentage (rounded to the nearest whole
percentage) of water, fuel grade ethanol, biodiesel, or renewable
diesel that is blended with petroleum diesel fuel. For example, "B5
- 5.0% Biodiesel", or similar wording, for a 5.0% biodiesel blend.
(e) As an alternative to subsections (c) and (d) of
this section, a dealer dispensing a biodiesel blend or renewable diesel
blend at a retail location to the ultimate consumer may elect to identify
on the storage tank, retail pump and sales invoice the blended product
sold in the following manner:
(1) blends containing a total percentage of up to 5.0%
biodiesel or renewable diesel by volume may be identified as "Contains
Up To 5.0% Biodiesel or Renewable Diesel" or similar wording. Each
component that is biodiesel or renewable diesel is added together
to determine the total percentage. The sales invoice must list the
basis for collecting the state tax as though the blended product sold
is a 5.0% blend. For example, a blended product that contains 2.0%
biodiesel and 2.0% renewable diesel has a total blend percentage of
4.0% and may be identified on the retail pump as "Contains Up To 5.0%
Biodiesel or Renewable Diesel", or similar wording, and identified
on the sales invoice with the statement "Contains up to 5.0% biodiesel
or renewable diesel - state diesel tax $0.19 per gallon", or similar
wording;
(2) blends containing a total percentage greater than
5.0% biodiesel or renewable diesel by volume but no more than 10%
biodiesel or renewable diesel by volume may be identified as "Contains
Up To 10% Biodiesel or Renewable Diesel" or similar wording. Each
component that is biodiesel and renewable diesel is added together
to determine the total percentage. The sales invoice must list the
basis for collecting the state tax as though the blended product sold
is a 10% blend. For example, a blend that contains 2.0% biodiesel
and 5.0% renewable diesel has a total blend of 7.0% and may be identified
on the retail pump as "Contains Up To 10% Biodiesel or Renewable Diesel",
or similar wording, and identified on the sales invoice with the statement
"Contains up to 10% biodiesel or renewable diesel - state diesel tax
$0.18 per gallon", or similar wording;
(3) blends containing a total percentage greater than
10% biodiesel or renewable diesel by volume but no more than 15% biodiesel
or renewable diesel by volume may be identified as "Contains Up To
15% Biodiesel or Renewable Diesel" or similar wording. Each component
that is biodiesel and renewable diesel is added together to determine
the total percentage. The sales invoice must list the basis for collecting
the state tax as though the blended product sold is a 15% blend. For
example, a blend that contains 5.0% biodiesel and 7.0% renewable diesel
has a total blend of 12% and may be identified on the retail pump
as "Contains Up To 15% Biodiesel or Renewable Diesel", or similar
wording, and identified on the sales invoice with the statement "Contains
up to 15% biodiesel or renewable diesel - state diesel tax $0.17 per
gallon", or similar wording;
(4) blends containing a total percentage greater than
15% biodiesel or renewable diesel by volume but no more than 20% biodiesel
or renewable diesel by volume may be identified as "Contains Up To
20% Biodiesel or Renewable Diesel" or similar wording. Each component
that is biodiesel and renewable diesel is added together to determine
the total percentage. The sales invoice must list the basis for collecting
the state tax as though the blended product sold is a 20% blend. For
example, a blend that contains 8.0% biodiesel and 8.0% renewable diesel
has a total blend of 16% and may be identified on the retail pump
as "Contains Up To 20% Biodiesel or Renewable Diesel", or similar
wording, and identified on the sales invoice with the statement "Contains
up to 20% biodiesel or renewable diesel - state diesel tax $0.16 per
gallon", or similar wording;
(5) blends containing a total percentage greater than
20% biodiesel or renewable diesel by volume must follow the sales
invoice, storage and retail pump requirements as described in subsections
(c) and (d) of this section;
(6) a dealer who uses this subsection must pay state
diesel fuel tax on their purchases of a biodiesel blend or renewable
diesel blend based on the actual volume of the petroleum diesel in
the blend;
(7) this subsection does not apply to wholesale sales
of biodiesel or renewable diesel blends.
(f) Certification. The refiner, producer, importer,
blender, or reseller of biodiesel, renewable diesel, biodiesel blend,
or renewable diesel blend must provide on each transfer to a person
who is not the ultimate consumer a delivery ticket, certificate, letter,
or other written statement (e.g.; invoice, bill of sale, bill of lading,
or product transfer document) that contains the name of the seller,
the name of the purchaser, date of transfer and the volume in gallons
(rounded to the nearest whole gallon) or the percentage (rounded to
the nearest whole percentage) of the biodiesel or renewable diesel
component of the blend. Certification records required by this subsection
must be maintained for four years.
(g) Refund of diesel fuel tax paid. The ultimate consumer
who has paid diesel fuel tax on biodiesel, renewable diesel, or on
the percentage of water, fuel grade ethanol, biodiesel, or renewable
diesel that is blended with taxable petroleum based diesel may file
a claim for refund of taxes paid as provided by §3.432 of this
title (relating to Refunds on Gasoline and Diesel Fuel Tax). The refund
claim must be supported with purchase invoice(s) as described in subsection
(c) of this section. The total volume of diesel fuel that is purchased
is presumed to be taxable diesel fuel if the purchase invoice does
not meet the requirements of subsection (c) of this section.
(h) Commercial motor vehicles licensed under the International
Fuel Tax Agreement (IFTA).
(1) A water-based diesel fuel, ethanol blended diesel
fuel, biodiesel, renewable diesel, biodiesel blend, or renewable diesel
blend that is delivered into the fuel supply tank(s) of a motor vehicle
that is licensed under the IFTA is presumed to be used in the jurisdiction
in which it was purchased. This presumption may be overcome if it
is shown that the total amount of water-based diesel fuel, ethanol
blended diesel fuel, biodiesel, renewable diesel, biodiesel blend,
or renewable diesel blend that is purchased in other IFTA jurisdictions
is greater than the amount of total diesel fuel used in other IFTA
jurisdictions by all diesel-powered motor vehicles that the IFTA licensee
operates.
(2) In calculating the IFTA fleet average mile-per-gallon,
the total gallons of diesel fuel that are consumed includes the total
gallons of water-based diesel fuel, ethanol blended diesel fuel, biodiesel,
renewable diesel, biodiesel blend, or renewable diesel blend.
Cont'd... |
