Excise Tax Free Sales of Gasoline

The Internal Revenue Service (IRS) allows for the sale of gasoline free of federal excise if certain conditions are met.  FUELIowa members registered with the IRS as an ultimate vendor may sell gasoline excise tax free to certain customers.  Ultimate vendor registrations are completed using IRS form (637) and marking the UV designation in the form.  Registration with the IRS as an ultimate vendor is a requirement before tax free sales of gasoline are allowed to an end-user.

Once FUELIowa members are registered with the IRS as an ultimate vendor, excise tax free sales of gasoline are allowed to eligible end-use customers assuming payment is made by means other than credit card.  End-use customers eligible to purchase gasoline tax free from an ultimate vendor and have the ultimate vendor apply for the excise tax refund include a state or local government for its exclusive use (including essential government use by an Indian tribal government) and a nonprofit educational organization for its exclusive use.

The registered ultimate vendor may make the claim for refund if the ultimate purchaser didn’t use a credit card for payment and waives its right to the credit or refund by providing the registered ultimate vendor with a copy of IRS certificate M.  Certificate M is required to be retained by the ultimate vendor and must be updated on an annual basis.  A model for IRS certificate M which can be used by FUELIowa members can be found on page 51 (here).  

FUELIowa members should note that the Iowa Department of Revenue requires state excise tax to be charged to all end-use customers.  Only the end-use customer may make application with the state for the refund of the state excise tax on fuel.