Welcome back, filers. Last week our blog was about Schedule 8 Form 8849, which seems to be enriched with information to keep you uplifted for the week. However, today we are going to throw some light on the sales of Registered Ultimate Vendors, explaining the requirements. Following are the sales for which a credit or a refund may be allowed to the registered ultimate vendor only.

•  Undyed diesel fuel or undyed kerosene sold for the exclusive use by a state or local government (if credit card rules (defined later) do not apply),
• Undyed kerosene sold from a blocked pump (defined below), or
• Undyed diesel fuel or undyed kerosene used in certain intercity and local buses, only if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver.

 

• Registered Ultimate Vendor (State Use): 

The registered ultimate vendor should sell the undyed diesel fuel or undyed kerosene to the state or the local government for its exclusive use (including essential government use by an Indian tribal government). The fuel should be purchased by the state without the usage of credit card, issued to the state by the credit card issuer in order for the ultimate vendor to file the claim.

However, here’s the twist. The diesel fuel or kerosene purchased by the state without the usage of the credit card, issued by the state by the credit card issuer, in order for the ultimate vendor to file an claim. Also, the ultimate vendor should be registered with IRS.

• Registered Ultimate Vendor (Blocked Pump):

Registered vendor who sells undyed kerosene from a block pump can file this claim. The credit or refund is allowed to a registered Ultimate vendor (blocked Pump) if the vendor sells the kerosene for other use than as a fuel in a diesel-powered highway vehicle and the vendor had no reason to believe the kerosene would not be used in that manner.

What Are Blocked Pump?

A blocked pump is indicated to the fuel pump that meets following requirements:

1. The fuel is used for retail sales of undyed kerosene for use by the buyer in any nontaxable use.
2. It has a fixed location.
3. The booked pump is identified with a notice stating “UNDYED UNTAXED KEROSENE, NONTAXABLE USE ONLY.”
4. Should meet either of the following conditions:
   1. This fuel cannot be dispense directly into the fuel supply tank of the diesel-powered highway vehicle or train.
   2. The pump is locked and unlocked by the vendor after each sale, after the response to a buyer’s request for undyed kerosene for use other than as a fuel in a diesel-powered highway vehicle or train

• Registered Ultimate Vendor (Certain Intercity And Local Buses):

The ultimate vendor sells undyed diesel fuel or undyed kerosene to the purchaser to use in certain intercity and local buses. However, the registered ultimate vendor can file a claim if the ultimate purchaser waives its right to the credit or refund by providing the registered ultimate vendor with a waiver. The registered ultimate vendor must have the waiver at the time the credit or payment is claimed.

Credit Card Purchases: 

If undyed diesel fuel or kerosene is purchased via credit card issued to a state, the person who extended credit to the state i.e. the credit card issuer is treated as the person who is required to pay taxes and file a claim if the credit card issuer is:

• Registered with IRS.
• Holding a written consent from the ultimate purchaser to the allowance of the credit or refund or has been established that the amount of taxes has not been collected by the person who purchased the fuel.
• Agreed to repay the amount of tax to the ultimate vendor, obtaining a written consent about the same or has made arrangements that provide the ultimate vendor with reimbursement of the tax.

However, if the requirements mentioned above are not met with the credit card issuer, the issuer is required to collect taxes from the ultimate purchaser and then only the purchaser can file a claim.

If you have any queries related to excise tax and other forms, do reach us @ 1-866-245-3918 or send us an email to support@taxexcise.com. We are all ears for you.