Paying the Federal and State Fuel Excise Tax

Every time your small business goes to the fuel pump to refill your gasoline and diesel, you are paying for the fuel, and the government is taxing it as well.

This occurs at both the federal and state levels.  The government uses the money they collect to cover federal infrastructure projects associated with the highways and transportation needs in the U.S.

Each state has its separate rate at which they tax you as a user. If your small business is located in Washington, California, or Pennsylvania, your business is paying some of the country’s highest rates.

In contrast, if you’re based in Missouri, Virginia, or Alaska, you have the luxury of paying less in taxes for fuel than a majority of the other states.

Getting a Refund from the IRS

When you purchase fuel for your small business, it may not be for transportation needs. Companies involved in specific industries will often require refrigerated trucks to haul their produce.

These trucks require fuel to operate the refrigeration equipment that’s used to keep the inventory cool. If you’re involved in the following, you may be owed a refund:

• Meat distribution
• Ice cream delivery
• Flower delivery
• Refrigerated trucks
• Other off-road purposes

Your Business Can’t Avoid This Type of Tax

Unfortunately, there’s no way around not paying this tax when you decide to purchase fuel for:

• Off-road purposes
• Landscaping equipment
• Refrigeration trucks

The only way you can do this is by filling out and submitting the required IRS paperwork. Lastly, if your company is involved in an industry that uses fuel for other purposes, you can get an idea of how much you’ll receive back from the IRS by estimating your refund.

Estimating Your Fuel Tax Refund

You could be losing thousands to hundreds of thousands of dollars each year, depending on your company’s size.

To give you a quick estimate of the fuel tax savings that your company may be eligible for, you may want to use our fuel tax estimator calculator. This calculator gives you an estimate of the money you may be entitled to receive when you claim your fuel excise tax refund.

Using the Fuel Calculator

To use the fuel calculator:

1. Go to the TiP Excise website.
2. From the menu bar, select Fuel Calculator.
3. Scroll down until you see the Fuel Calculator.
4. From the Fuel Type drop-down list, select the fuel type you use for non-transportation activities.
5. From the Vehicle Type drop-down list, select the vehicle type you use for non-transportation activities. For example, if you are a landscaping company that operates lawnmowers and other associated equipment, you select Unleaded for the fuel type and Lawn Equipment for the vehicle type.
6. Type the necessary information into the remaining fields. For example, let’s say you’re a landscaping company that operates four vehicles for eight hours per day, five days per week, 180 weeks per year. After entering these figures into the fuel calculator, it will give you an estimate of $5299.20 as a yearly refund and a first filing refund of $15,897.60.

As you can see, this is a significant amount of money you can get back from the IRS. The sad aspect of this is that many small businesses don’t even realize this opportunity is available, and they don’t take advantage of it.

Are You Even Aware of This Opportunity?

If you are like most other business owners, you may not have known this opportunity existed until reading this article, which isn’t surprising. It’s probably safe to say you have an accountant assisting you with your bookkeeping, taxes.

However, even with their experience and knowledge, this refund may go unnoticed due to other matters you have to deal with.

Seeking Assistance to Get Your Refund

So, now that you are aware of the refund you can get, you need to decide if you want to handle this yourself. For instance, it’s highly likely operating your business takes most of your time and resources. While you can tackle the subject, you will need to complete all of the paperwork involved in receiving your refund.

Likewise, businesses in your situation have decided to seek the help of a company that specializes in getting your refund. They are fully devoted to monitoring the rulings and tax laws associated with this type of refund.

And, they focus on helping medium and small businesses get back the money that they deserve. One of the great aspects of this type of service is taking their fee out of the refund. So, you don’t have to come up with any extra money for their assistance.

Whether you choose to pursue this refund on your own or use a company that specializes in doing all the leg work required to get your money, it’s good to know you have some extra cash coming to you that will increase your cash flow.

Let Us Help You

TiP has been putting money in the pockets of clients for 20 years.  Our experienced and talented team is singularly focused on your excise tax refund.

As you know, the fuel tax recovery and refund process can be complex. But TiP makes it simple for you to recover your refund! Our knowledge of state and federal fuel tax laws enables us to identify and recover tax refunds for you.

Finally, let our team work for you. Contact us today for No Risk service!