Sales Tax Base On Motor-Fuel Purchases Notice Form (Page 2 of 2) in pdf

excise tax that is imposed on the fuel, even when the fuel and the Federal tax are listed as

separate line-item charges on the purchase invoice. See K.S.A. 2009 Supp. 79-3602(ll)(No

deduction from the "sales or selling price" for "taxes imposed on the seller and any other

expense of the seller.")

After fuel is sold, some consumers may apply for a credit or refund of Federal fuel excise

tax. IRS Publication 510 lists the Federal fuel excise tax credits and refunds that are

available and explains how to apply for them. The fact that a Federal tax credit or refund

may be or has been issued does not allow the credit or refund to be deducted from the

"sales or selling price" used to calculate Kansas sales tax either at the time of sale or later,

as part of an invalid sales tax refund claim filed with the department to recover the sales

tax paid on the Federal tax credit or refund amount.

Consumers of fuel that is taxed under the Act, such as gasoline or clear diesel, may apply

to the department for a motor-fuel tax refund for fuel used off road or for another

nontaxable use. See K.S.A. 79-3453 and K.S.A. 2009 Supp. 79-3454 for fuel uses subject

to refund. When a refund is sought, the consumer's initial purchase of the fuel was

exempt from Kansas sales tax under K.S.A. 2009 Supp. 79-3606(a) since Kansas motor-

fuel tax was paid on the fuel.

After the department issues a motor-fuel tax refund, the consumer is required to comply

with Notice MF-50 and report Kansas retailers' sales tax on the fuel unless the consumer

can claim a sales tax exemption for the fuel. Notice MF-50 can be download from our

web site. It contains instructions for calculating and reporting Kansas sales tax on fuel

that has generated a motor-fuel tax refund from the department.

Fuel that generates a refund of Kansas motor-fuel tax is subject to Kansas sales tax under

the "not subject to refund" provision in K.S.A. 2009 Supp. 79-3606(a) if the fuel doesn't

qualify for a sales tax exemption. One example of fuel that qualifies for a motor-fuel tax

refund that is subject to sales tax is gasoline used for recreational boating on which

Kansas motor-fuel tax has been refunded to the consumer by the department. See

Your Business

Motor Fuel

Frequently Asked Questions.

This revision is intended to clarify, rather than change, the requirements discussed in the

version of Notice 09-06 that took effect on June 26, 2009. The earlier Notice is rescinded

by this revision.

Taxpayer Assistance. Additional copies of this notice, and other forms or publications,

are available for download from our web site, If you have

questions about motor fuel tax or sales tax, please contact:

Taxpayer Assistance Center

Phone: 785-368-8222

Kansas Department of Revenue

Hearing Impaired TTY: 785-296-6461

915 SW Harrison St., 1st Floor

Fax: 785-291-3614

Topeka, KS 66612-1588

Sales Tax Base On Motor-Fuel Purchases Notice Form Page 2