The last several years have been difficult for construction companies across the country. Rising gas prices, material costs, and supply issues have all hit contractors and construction companies of all sizes and specialties. All of these factors have had a negative impact on many small business owners’ bottom lines. However, there are steps that construction companies can take to minimize the negative economic impacts of rising prices across the board. Examining your eligibility for an excise fuel tax refund is the best way to start.
Fuel tax refunds can be granted to businesses across multiple sectors, and one industry that can particularly benefit from seeking excise tax refunds is construction. You might qualify if you regularly use tools at work, such as generators that enable you to operate in off-the-grid regions. Here is the information you need to determine whether your business qualifies for fuel tax refunds.
What is an Excise Tax?
An excise tax is a tax that every American pays for specified goods or services. However, unlike a sales tax or other additional tax that is clearly marked on a receipt, an excise tax is built into the price. Because of this, most folks don’t realize that they are paying the excise tax, but they may notice fluctuations in the price tag of certain goods over the months and years.
Examples of goods with excise tax include alcohol, tobacco, and yes, fuel, and these small amounts can certainly add up. As of 2023, Federal taxes include excise taxes of 18.3 cents per gallon on gasoline and 24.3 cents per gallon on diesel fuel and a Leaking Underground Storage Tank fee of 0.1 cents per gallon on both fuels.
This is in addition to any state taxes that apply as well. The total state tax is31.63 cents on gasoline and 33.88 cents on diesel, but this can vary widely from state to state.
Who Can Receive a Fuel Excise Tax Refund?
Bear in mind that while every American inherently pays excise tax at the pump, not every American or business owner can claim a fuel excise tax refund. Generally speaking, a fuel excise tax refund is only due to any organization that operates off-the-road equipment for their business. For example, landscapers may use gasoline for their lawnmowers or weedwhackers, while golf clubs and resorts may use gas for their golf carts.
Therefore, constructions companies definitely make the list when it comes to different types of businesses that use gasoline in off-the-road situations.
How are Construction Companies Eligible for Excise Fuel Tax Credit?
Construction companies of all sizes likely have multiple routes to claiming a hefty excise fuel tax credit, but the following pieces of equipment are examples of eligible equipment:
- Bulldozers
- Front loaders
- Other trucks/vehicles used in off-road locations
- Cranes
- Power saws
- Air compressors
- Generators
- Heaters
What are the Requirements for Construction Companies for Excise Tax?
There are several ways for construction companies to claim a fuel tax credit, which can occur prior to the end of the year or with an annual tax return.
How and when you claim a fuel excise tax credit essential determines the form(s) that will be required. For example:
- Form 4136 can be used to claim a fuel tax credit with an annual tax return.
- Form 8849 can be used to obtain periodic fuel tax refunds for companies that do not want to wait until the end of the year.
- Form 720 can be used quarterly to claim a fuel tax credit against a company’s excise tax liability.
Bear in mind that any of these forms may require additional information, documentation, or supplemental IRS forms. Still, these are all intricate and necessary details that the experts at TiP Excise can handle.
What Do Construction Companies Need to Receive a Fuel Excise Tax Refund?
Ideally, construction companies should have documentation of all fuel purchases. Additionally, they will need the details on where that fuel went to supply a generator and/or construction vehicles.
However, you don’t necessarily need super-detailed records to receive a fuel excise tax credit.
The experts at TiP Excise are adept at handling situations where not all records are perfectly kept and monitored throughout the year. However, you shouldn’t delay exploring your options for a fuel tax credit simply because you’re concerned about precise record keeping. After all, you use fuel to power every aspect of your business, from bulldozers to power saws.
What Are the Benefits of Claiming Excise Tax Refunds?
Considering how much construction companies rely on fuel to power their everyday operations, the potential cost cutting benefits can be huge. For starters, you can receive a bigger-than-expected refund (which can potentially go back several years from the first time you file). Also, you can put this money back into your company to expand, grow your operations, or simply have a little breathing room when it comes to price increases for supplies and price increases at the gas tank.
The first step for construction companies that want to claim an excise fuel tax refund is to contact TiP Excise.
At TiP Excise, we’ve been helping put money back into the pockets of our clients for more than 20 years. We successfully work with construction companies of all sizes to help achieve the largest excise tax refund possible.
The fuel excise recovery process is far from simple. It’s understandable that construction owners lack the time and resources to learn about local, state, and federal fuel tax laws, and the many steps required to claim fuel excise tax credit.
TiP Excise is the Partner You Need
We do not charge any upfront fees to explore your options. Also, we are only paid a percentage of your total refund. We continually monitor fuel tax laws, rulings, and regulatory changes to stay abreast of the developments that may impact your business, and we just need a little of your time to get started.
If you’re a construction company, there’s a good chance you have money on the table waiting to claim. Our expert team at TiP Excise is standing by to help you receive the funds you need to keep your business going strong.