Federal Tax Credit Available For Reefer Fuel Purchases
For every gallon of diesel fuel purchased at the pump, a Federal Use Tax of .243 cents is collected. The tax only applies when the fuel is used in a taxable manner which means used as fuel to propel the vehicle.
For diesel fuel that was purchased at the pump and was not used to propel the vehicle, such as in powering a reefer unit, the IRS allows a deduction for the tax paid on the company’s annual income tax filing. For large quantities purchased, credits can be claimed quarterly.
By collecting the receipts of nontaxable fuel purchases, determining the total gallons purchased for 2016, and using IRS Form 4136, the proper credit amount can be determined.
Credits for undyed diesel fuel purchased for other nontaxable uses such as farm equipment or off road equipment may also be available using the same form. Check with your tax advisor to be sure you qualify.
Glostone prepares form 4136 for free to clients who use our fuel tax reporting service. Give us a call if you have questions – 503-607-1088!