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DEPARTMENT OF STATE REVENUE

Information Bulletin #305
General Tax
June 2021
(Replaces Bulletin #303 dated June 2020)
Effective Date: July 1, 2021


SUBJECT: Motor Carrier Fuel Tax Rate


DISCLAIMER: Information bulletins are intended to provide nontechnical assistance to the general public. Every attempt is made to provide information that is consistent with the appropriate statutes, rules, and court decisions. Any information that is not consistent with the law, regulations, or court decisions is not binding on either the department or the taxpayer. Therefore, the information provided herein should serve only as a foundation for further investigation and study of the current law and procedures related to the subject matter covered herein.

SUMMARY OF CHANGES
The bulletin was updated to provide the new motor carrier fuel tax rates effective July 1, 2021.

I. INTRODUCTION

The motor carrier fuel tax (MCFT) is a type of "road tax" that is imposed on motor carriers, so that if a fuel excise tax was not paid at the time of purchase, and the fuel was used by the carrier in their operations on Indiana highways, the carrier would pay MCFT on a quarterly basis to ensure that tax has been collected on the use of the fuel in Indiana.

Indiana is a member of the International Fuel Tax Agreement (IFTA). The IFTA ensures that fuel taxes are apportioned to the member jurisdiction in which fuel was consumed. When an interstate carrier consumes fuel in Indiana, MCFT will be owed on that consumption if a tax-paid purchase of the fuel was not made in Indiana. Through the IFTA, motor carriers operating interstate report to the jurisdiction in which they are based, receiving credit for the taxes paid in the jurisdictions where the fuel was purchased but not consumed, and paying tax on the fuel they consumed in jurisdictions where they had not paid tax to that jurisdiction because it was purchased in another jurisdiction.

II. DEFINITIONS

"Gasoline" means:

(1) all products commonly or commercially known or sold as gasoline, including casinghead and absorption or natural gasoline, regardless of their classifications or uses; and
(2) any liquid, which when subjected to distillation of gasoline, naphtha, kerosene, and similar petroleum products with American Society for Testing Materials Designation D-86, shows not less than ten percent (10%) distilled (recovered) below three hundred forty-seven degrees Fahrenheit (347 degrees F) or one hundred seventy-five degrees Centigrade (175 degrees C), and not less than ninety-five percent (95%) distilled (recovered) below four hundred sixty-four degrees Fahrenheit (464 degrees F) or two hundred forty degrees Centigrade (240 degrees C).

However, the term "gasoline" does not include liquefied gases which would not exist as liquids at a temperature of sixty degrees Fahrenheit (60 degrees F) or sixteen degrees Centigrade (16 degrees C), and a pressure of fourteen and seven-tenths (14.7) pounds per square inch absolute, or denatured, wood, or ethyl alcohol, ether, turpentine, or acetates, unless such product is used as an additive in the manufacture, compounding, or blending of a liquid within subdivision (2) or is otherwise blended with a liquid described in subdivision (2) (including ethanol used in E85), in which event only the quantity so used is considered gasoline. In addition, "gasoline" does not include those liquids which meet the specifications of subdivision (2) but which are especially designated for use other than as a fuel for internal combustion engines.

"Special fuel" means all combustible gases and liquids that are:

(1) Suitable for the generation of power in an internal combustion engine or a motor; or
(2) Used exclusively for heating, industrial, or farm purposes other than for the operation of a motor vehicle.

Special fuel includes biodiesel and blended biodiesel (as defined in IC 6-6-2.5-1.5), and natural gas products. However, the term does not include an alternative fuel, a gasoline (as defined in IC 6-6-1.1-103); an ethanol produced, stored, or sold for the manufacture of or compounding or blending with gasoline; kerosene; and jet fuel (if the purchaser of the jet fuel has provided to the seller proof of the purchaser's federal jet fuel registration at or before the time of sale).

"Alternative fuel" means a liquefied petroleum gas, not including a biodiesel fuel or biodiesel blend, used in an internal combustion engine or motor to propel any form of vehicle, machine, or mechanical contrivance. The term includes all forms of fuel commonly or commercially known or sold as butane or propane.

III. MCFT RATE EFFECTIVE JULY 1, 2021

Effective July 1, 2020, the rate of the MCFT is $0.53 per gallon of special fuel or alternative fuel, and $0.32 per gallon of gasoline, consumed by a carrier in its operations on highways in Indiana.

_____________________________
Robert J. Grennes, Jr.
Commissioner

Posted: 07/28/2021 by Legislative Services Agency

DIN: 20210728-IR-045210279NRA
Composed: Dec 07,2022 4:17:35PM EST
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