A Complete Guide on Excise Fuel Tax – What You Need to Know

excise fuel tax, gas pump
September 8, 2023 0 Comments

Everyone pays excise tax on a regular basis and may not even realize it. From filling up a gas tank to purchasing goods like alcohol or tobacco, an excise fuel tax is veritably hidden in various transactions conducted every day.  

 However, when it comes to running a business, companies may be eligible to put some of that hard-earned money back into their pocket through a fuel excise tax refund.  

A fuel excise tax refund returns the funds that businesses spend on gas and diesel. Additionally, with the recent federal gas tax increase, there is no better time for business owners and managers to explore their options and see if they qualify for a potentially hefty excise tax refund. 

Are you curious about your IRS gas refund status and whether you qualify? Then read on to discover what you need to know about excise tax, obtaining a refund, and how TiP Excise can help. 

What is an Excise Tax, and What Goods are Subject to Excise Tax? 

An excise tax is a tax that is included in the price of a good or service. This can include heavily regulated goods like fuel, as well as goods that are seen as optional or luxurious purchases, like alcohol, tobacco, and even tanning beds or airline tickets.  

When it comes to fuel, the United States federal excise tax as of 2023 is 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel. However, there are also state excise taxes, which can vary widely. For example, the gasoline tax in Alaska is 8.95 cents per gallon, but in Texas, the rate is 20 cents per gallon. Simply put, anytime fuel is purchased, this tax is included in the total price of the gas pump. That means that consumers are paying these excise taxes automatically. 

What is a Fuel Excise Tax Refund? 

Businesses that use fuel in specific ways can often claim a refund on the excise tax they automatically pay whenever they purchase gasoline or diesel to power their operations.  

However, there are some hefty caveats to obtaining a fuel tax refund.  For one thing, a fuel excise tax refund, or fuel tax credit, can only be garnered for equipment and operations off the highway.  

For example, a food transportation company can’t claim a refund for the fuel that powers their trucks to get from point A to point B. However, they can claim a refund on the fuel required to refrigerate the truck’s interior. A construction company can’t claim a refund on the vehicles they use to drive to a job site every day.

Moreover, they can claim a refund on the fuel used to power: 

  • tractors 
  • construction equipment 
  • generators 
  • and other off-the-grid gear   

Who Qualifies for the Fuel Tax Credit? 

Though it sounds like it may be hard to qualify for a fuel excise tax refund since only fuel used off the highway can be accounted for, a surprisingly large number of businesses may qualify for a refund. 

Popular Industries and Types of Businesses that May Qualify for a Refund  

Transportation services 
Trucking and transportation companies that use refrigeration to keep food and goods at a specific temperature will likely qualify for a fuel excise tax refund. 

Farmers, landscapers, and outdoor-oriented companies
Farmers, landscapers, and any business that uses equipment in the field and off the grid can generally claim a fuel excise tax refund 

Construction companies
Construction companies or any company that requires fuel to power equipment, generators, and other non-highway equipment will likely qualify for a fuel excise tax refund. 

Outdoor tourism
Any tourism-related business or attraction using golf carts, ATVs, or even charter vessels may also qualify for a fuel excise tax refund. 

How to File Excise Tax Refunds 

Unlike other areas of federal and state taxes, excise tax and excise tax refunds are complex components of tax law. The IRS has an overview of how excise tax works and the forms that businesses need to file in order to be eligible for a refund. However, the process is much more complicated than simply filling out a form and waiting for a check.  

As a result, many small business owners don’t explore their options when it comes to fuel excise tax refunds.  The process is time-consuming complicated, and can easily result in errors, especially for personnel unfamiliar with this unique area of tax law. 

The Best Way to Explore Your Options and to See if You Qualify for an Excise Tax Refund is to Connect with TiP Excise  

Even if you already have an accounting team or tax preparation services provider, when it comes to fuel excise tax, your first step should be to reach out to the experts at TiP.  

At TiP Excise, we only work with fuel excise tax refunds. Our team of experts constantly monitors on the changes, regulations, and laws that may impact your bottom line. In addition, because of our decades of experience, we can ensure that you get the largest refund possible, regardless of your specific industry, business, or daily operations. 

There’s no risk involved in reaching out for a free consultation. At TiP Excise, we are only paid when you receive your refund on a contingency fee basis. Therefore, any fees are based on the successful recovery of federal and state fuel tax dollars. 

It’s also perfectly OK if you don’t have detailed receipts and bookkeeping for every fuel transaction you have made over the lifespan of your business. You can get started with just a few questions and a little information from you. Moving forward, we can get the ball rolling and begin the process of securing the largest refund possible. 

With gas prices fluctuating across the country, now is the perfect time to explore your options for a fuel tax refund that may extend back for years and put a hefty return into your business. Let’s work together to ensure you secure the biggest refund possible. 

Reach out to our excise tax experts today.