Reference
California fuel tax law, section by section
Four separate parts of the Revenue and Taxation Code reach a fuel jobber, and which one applies depends entirely on what came out of the hose. 170 sections, each linked to CDTFA’s own text.
General information, not advice.
TaxTraks are certified public accountants, not attorneys. Section headings
below are CDTFA’s own; the sentence under each is ours. Law changes,
rates are indexed every July, and the answer for a particular load depends
on facts this page knows nothing about. Read the linked section before
relying on any of it.
Start with the product, not the question
The commonest mistake is reaching for the wrong part. A jobber selling gasoline, diesel and propane off the same yard is filing under three different excise regimes, each with its own definitions, its own permit and its own refund clock — on top of the sales tax return that covers all of it.
| What you sold | Which part | Where the tax attaches |
|---|---|---|
| Gasoline, aviation gasoline | Part 2 — Motor Vehicle Fuel | Removal from the terminal rack |
| Aircraft jet fuel | Part 2, its own chapter | Sale by the jet fuel dealer |
| Diesel, clear or dyed | Part 31 — Diesel Fuel | Removal from the terminal rack |
| Propane, CNG, LNG, ethanol, methanol, kerosene | Part 3 — Use Fuel | Into the propulsion tank, collected by you |
| Every one of them, again | Part 1 — Sales and Use Tax | The sale itself |
Part 1 is not an alternative to the other three. The excise tax and the sales tax both apply, and for gasoline the excise tax is inside the measure of the sales tax — see § 6012.
Part 1 · § 6001–7176
Sales and Use Tax Law
The tax on the sale itself. This is the part a jobber files a return under every month or quarter, and the part almost every recovery comes out of: the exemptions, the partial exemptions, the prepaid sales tax on fuel, and the liability that follows a business when it is sold.
Resale, and the certificate behind it
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6007 | “Retail sale.” | A sale for resale is not a retail sale — which is what makes rack-to-jobber and jobber-to-dealer fuel non-taxable in the first place. |
| § 6091 | Presumption of taxability; resale certificate | Every dollar of gross receipts is presumed taxable, and the burden is on you unless you took a certificate. |
| § 6092 | Effect of certificate | A certificate protects you only if it was taken in good faith from a buyer actually in the business of selling, holding a seller’s permit. |
| § 6094 | Liability of purchaser; accommodation loans | Fuel bought under a certificate and then burned rather than resold is taxable — this is how your own company trucks get caught. |
| § 6094.5 | Improper use of certificate | Knowingly issuing a bad resale certificate is a misdemeanour, plus the tax and a penalty of 10% or $500. |
Exemptions a jobber claims
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6381 | United States | Sales to the United States, its unincorporated agencies and wholly owned instrumentalities, and the American Red Cross. Not their construction contractors. |
| § 6396 | Interstate shipments | Fuel shipped out of California under the sales contract, by your own trucks or a carrier. |
| § 6352 | Constitutional exemptions | The backstop where federal or state constitutional law bars the tax outright. |
| § 6359 | Food products | The convenience-store side: cold grocery food exempt, hot prepared food and carbonated drinks taxable. |
| § 6357 | Motor vehicle fuel—aviation gasoline | Motor vehicle fuel used to propel aircraft, excluding aircraft jet fuel. |
| § 6357.5 | Fuel and petroleum products sold to air common carriers | Fuel delivered straight into an air common carrier’s aircraft for immediate consumption on an international flight. |
Bad debts, and the measure of tax
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6055 | Worthless accounts | Sales tax already remitted on a charge account that was never paid comes back. The current version sunsets 31 December 2027. |
| § 6203.5 | Worthless accounts | The same relief on the use tax side. |
| § 6012 | Gross receipts. | What the tax is measured on. (a)(4) puts the federal and California gasoline excise tax INSIDE the measure; (c)(11) takes the Part 31 diesel excise tax out. The tax-paid-purchases-resold deduction comes from (a). |
| § 6011 | Sales price. | The use-tax mirror of 6012, with the same fuel-tax inclusions and exclusions. |
| § 6245.5 | Exemption certificate; fuel purchases | The certificate a qualified buyer gives you to take the federal excise tax out of the taxable measure. |
| § 6423 | Exemption certificate; Federal excise tax on diesel fuel | The diesel equivalent. A buyer who certifies falsely carries the liability and a 10% or $500 penalty. |
Partial exemptions — credits, not deductions
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6357.7 | Motor vehicle fuel. CDTFA prints the 2010 version, repealed by AB 105, above the operative one added by Stats. 2011, Ch. 6 the same day, so the page reads at first glance as though the exemption is gone. It is not: Regulation 1598(d) cites this section as the authority for the partial exemption, operative from 1 July 2010. | Gasoline is exempt from the state rate but not from Bradley-Burns, district tax, or the 6051.2/6051.5 rates. This is why gasoline lands at 2.25% plus district rather than 7.25%. |
| § 6357.1 | Diesel fuel; farming business | The big one for an agricultural jobber: diesel used in farming and food processing drops from 13.00% to 2.25% plus district tax. |
| § 6356.5 | Farm equipment and machinery | Qualified farm equipment, state portion only. |
| § 6356.6 | Timber harvesting equipment | Off-road commercial timber harvesting equipment, on the same footing. |
| § 6377.1 | Manufacturing, Power Generation, and Research and Development Equipment. | Runs 1 July 2014 to 30 June 2030 with a $200m annual cap. A jobber either accepts a CDTFA-230M certificate or claims it on its own terminal and blending equipment. |
The diesel rate, and who escapes it
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6051.8 | Diesel fuel: sales tax rate increase | The additional state tax on retail diesel: 1.75% from the 2010 fuel tax swap, plus a further 4.00% from 1 November 2017. Together with the 7.25% base this is where 13.00% comes from. |
| § 6201.8 | Diesel fuel: use tax rate increase | The use-tax counterpart, at the same rates. |
| § 6357.3 | Diesel fuel: exemption from rate increase | Diesel exempt from the Part 31 tax — dyed diesel — escapes the increases on an exemption certificate, which is why dyed sits at 7.25%. |
Prepayments
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6471 | Prepayment | Quarterly prepayments start being required once the estimated tax liability averages $17,000 a month. |
| § 6471.4 | Prepayment exception | Relieves a person already prepaying under Article 1.5 from those quarterly prepayments — but only where more than 75% of gross receipts come from the retail sale of motor vehicle fuel, diesel or jet fuel. Sales for resale do not count toward the 75%. |
Prepaid sales tax on fuel — Article 1.5
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6480 | Definitions | Who is a supplier and who is a wholesaler, and which fuels are in scope. This decides whether you collect the prepayment or only pay it. |
| § 6480.1 | Prepayments | The core section. Suppliers and wholesalers collect prepaid sales tax and must show it on the invoice; subdivision (d) makes what you paid your supplier a credit against your own sales and use tax. The cents-per-gallon rate in (g) is set at 80% of the combined rate. |
| § 6480.2 | Supplemental reports | CDTFA can demand a purchaser list or supplemental schedules. Not complying is a misdemeanour. |
| § 6480.3 | Filing prepayments | Due on or before the last day of the month following the monthly period. |
| § 6480.4 | Penalties and interest | 10% plus interest for remitting late; 25% if it was knowing or intentional. |
| § 6480.6 | Refunds | Prepayment comes back on fuel exported, sold exempt, lost to casualty, taxed twice, or where a worthless account meant the prepayment was never collected. |
| § 6480.7 | Security | CDTFA may require security up to three times average monthly liability, or $500,000, whichever is less. |
| § 6480.9 | Prepayment exemption, diesel fuel resold for agricultural purposes | An agricultural jobber — more than 25% of last year’s taxable sales in farm diesel, selling mainly by bulk delivery or cardlock — can certify and buy diesel without the prepayment. Misuse costs $1,000 a certificate. |
When the business is sold
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6811 | Withholding by purchaser | The buyer must hold back enough of the purchase price until the seller produces a receipt or a clearance certificate. |
| § 6812 | Liability of purchaser; release | A buyer who does not withhold is personally liable up to the purchase price. CDTFA has 60 days to issue the certificate or state the amount, and three years to assess. |
| § 6813 | Certificate | The clearance certificate issues once everything due is paid or secured. |
| § 6814 | Notice of successor liability | How notice is given, how to petition, and the reasonable-cause relief from the successor penalty. |
| § 6815 | Effect of security for tax when business discontinued | Security held under 6701 is applied as a payment on account when the business stops. |
Time limits, and records
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 6487 | Limitations; deficiency determinations | Three years from the last day of the month following the period, or from filing, whichever is later — eight years if no return was filed. |
| § 6902 | Claim; limitation period. | A refund claim has three years from the last day of the month following the period, or six months after a determination becomes final, whichever is later. This is the clock on a recovery. |
| § 7053 | Records | Every seller keeps records, receipts, invoices and pertinent papers in the form CDTFA requires. The four-year retention rule is in Regulation 1698, not here. |
| § 7054 | Examination of records | CDTFA’s authority to examine the books, the records and the equipment, and to investigate the character of the business. |
Part 2 · § 7301–8526
Motor Vehicle Fuel Tax Law
The excise tax on gasoline and aviation gasoline — and nothing else. Jet fuel has its own chapter inside this part; diesel is Part 31; propane and natural gas are Part 3. The tax attaches when fuel leaves the terminal rack, so the question is always who held the position at that moment.
The 2002 restructure replaced the old distributor-and-broker scheme with the federal-style supplier and position-holder scheme. There is no longer any such thing as a “distributor” or a “broker” under this part — if a form or an old memo uses those words, it predates the current law.
What is taxed, and who is liable
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 7326 | “Motor vehicle fuel.” | Gasoline and aviation gasoline only. Expressly not jet fuel, diesel, kerosene, LPG, natural gas, alcohol or racing fuel — so this section decides which of your product lines are in this part at all. |
| § 7338 | “Supplier.” | The umbrella licence class: blender, enterer, position holder, refiner, terminal operator or throughputter. Fit any one and you must be licensed and file. |
| § 7332 | “Position holder.” | Hold the inventory position at a terminal under a throughput contract and the rack-removal tax lands on you. |
| § 7339 | “Terminal.” | What counts as a terminal, which fixes whether a movement is inside or outside the bulk transfer system. |
| § 7333 | “Rack.” | The mechanism that delivers fuel into a truck, trailer or railcar. Every load-out crosses it. |
| § 7311 | “Enterer.” | The importer of record, or the owner if there is none. Haul fuel in from out of state and this is you. |
| § 7312 | “Entry.” | What importing into California means, with the carve-out for fuel in a vehicle’s own tank. |
The tax, and when it attaches
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 7360 | Levy of tax. A repealed 2011 version prints above the operative text. | The rate: 18¢ base, plus 17.3¢ from July 2010 and 12¢ from November 2017 on fuel other than aviation gasoline, indexed to inflation every 1 July since 2020. The “other than aviation gasoline” wording is why AV gas sits so much lower. |
| § 7362 | Levy of tax; rack removal. | The ordinary case: tax is imposed on removal from a California terminal at the rack. |
| § 7363 | Levy of tax; other. | The other four triggers — refinery removal, entry into the state, sale to an unlicensed person, and blended fuel. |
| § 7364 | Levy of tax; backup tax. | Refund-allowed or untaxed liquid delivered into a highway vehicle’s tank. The trap when off-road fuel ends up on-road. |
| § 7365 | Blender liability. | Blending outside the terminal system makes you liable for the untaxed increment. |
| § 7366 | Enterer liability. | The importer pays. |
| § 7368 | Position holder liability. | The position holder pays the rack-removal tax. |
| § 7372 | Two-party exchange. | The receiving party may remit, but the refiner or position holder stays primarily liable — which is a contract risk worth reading before signing an exchange agreement. |
| § 7361 | Floor stock tax. | How a rate change reaches inventory you already own. |
| § 7361.2 | Storage tax. | Taxed 1,000 gallons or more of tax-paid fuel held on 1 November 2017 at the rate differential. The model for how a rate change catches a jobber’s tank farm. |
Exemptions
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 7401 | Exemptions. | The master list: bulk transfers between licensed suppliers, exports, consulate sales, armed forces for ships and aircraft or out-of-state use, gasoline blendstocks, and train operator or off-highway sales on a certificate. |
| § 7402 | Exemption certificate; gasoline blendstock. | The form, and its one-year expiry. Your documentation defence on a blendstock sale. |
| § 7403 | Exemption certificate; train operator. | The certificate you must actually hold before selling exempt to a railroad or for off-highway use. |
| § 7405 | Misuse of exemption certificate. | A misdemeanour, plus tax and a penalty of 25% or $1,000 per certificate, whichever is greater. |
Licences, returns and penalties
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 7451 | Supplier license. | Licence first, then operate. Acting as a supplier without one is unlawful. |
| § 7486 | Security requirements A repealed “Bond requirements” version prints above the operative text. | Capped at three times estimated average monthly liability, $1,000,000 overall, released after three consecutive clean years. |
| § 7651 | Return | Monthly, due on or before the last day of the month following the period, with payment. |
| § 7655 | Penalty; failure to pay | 10% late payment, 10% late filing, capped at 10% in total for any one return, plus interest. |
| § 7660 | Determination if no return made; penalty | Do not file and CDTFA estimates your removals and adds 10%. |
| § 8402 | Penalties. | Failure to pay or file, a false statement, or any other violation is a misdemeanour: $1,000 to $5,000 and up to six months. |
Refunds — note who pays them
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 8101 | Refunds on certain sales. | The off-highway refund, plus export, armed forces, registration-exempt construction equipment on its project, consulate, duplicate tax, and tax-paid fuel used to make blended fuel. Paid by the State Controller, not CDTFA. |
| § 8102 | Claim for refund. | The form, the invoices, the perjury declaration. Filed annually, or quarterly once more than $750 is refundable; export claims any time. |
| § 8103 | Amount of refund. | The Controller pays an amount equal to the tax collected on the fuel claimed. |
| § 8105 | Time for filing refund claims | Three years from the date of purchase — or, if the tax was not invoiced then, six months after you receive an invoice for it, whichever is later. |
| § 8101.5 | No refund; aircraft. A repealed version prints above the operative text. | No refund at all on motor vehicle fuel used to propel an aircraft. |
| § 8128 | Claim; limitation period. | A different clock, and frequently confused with 8105: this is CDTFA’s window for an overpayment refund, three years from the last day of the month following the overpayment, or six months from finality, whichever is later. |
Aircraft jet fuel
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 7387 | “Aircraft jet fuel.” | Any inflammable liquid used or sold for use in a jet or turbine aircraft. A separate regime from motor vehicle fuel, inside the same part. |
| § 7392 | Rate of tax. | 2¢ a gallon on the aircraft jet fuel dealer. Not indexed to inflation, unlike the gasoline rate. |
Records
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 8301 | Records | Every supplier, and every person dealing in, removing, transporting or storing motor vehicle fuel, keeps records in CDTFA’s required form. Failing to is a misdemeanour. |
| § 8302 | Information to retain. | Terminal operator rack-removal records — bill of lading, volume, date, carrier, position holder — held three months at the terminal and four more years after that. This is the only explicit retention period in the part. |
| § 8303 | Inspection of records. | Available at all times for inspection. |
Part 31 · § 60001–60708
Diesel Fuel Tax Law
The excise tax on diesel. Structurally the twin of Part 2 — rack removal, position holders, enterers, blenders — with one thing Part 2 does not have: dye. Almost everything that goes wrong for a jobber in this part goes wrong at the boundary between dyed and clear.
Definitions that decide the answer
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 60022 | “Diesel fuel.” A pre-2007 version prints above the operative one, which dropped the diesel-water emulsion carve-out. | The outer boundary. Kerosene, gasoline, LPG, natural gas and alcohol are outside it, so those lines are not Part 31 at all. |
| § 60031 | “Dyed diesel fuel.” | Defined by reference to the EPA and IRS dye rules. Your whole off-road inventory. |
| § 60032 | “Undyed diesel fuel.” | The clear, taxable side of the tank farm. |
| § 60033 | “Supplier.” | You become one by being a blender, enterer, position holder, refiner, terminal operator or throughputter — and pick up licence and return duties with it. |
| § 60036 | “Ultimate vendor.” | The status that lets you claim back tax on undyed fuel sold for farming or exempt bus use. |
| § 60038 | “Registered ultimate vendor.” | Only a registered vendor may claim under 60502. Registration is a precondition, not paperwork. |
| § 60039 | “Exempt bus operation.” | Which bus customers support an exempt sale — transit districts, contracted private carriers, certain passenger stage corporations, school districts and their contractors. |
| § 60041 | “Train operator.” | Must own or operate a diesel train and be licensed as a railroad. Check both before selling exempt. |
| § 60043 | “Government entity.” | A different exemption track from bus operators, and it excludes a subdivision that is only an exempt bus operator. |
| § 60013 | “Enterer.” | Importer of record, or the owner if there is none. |
| § 60012 | “Blender.” | Blending outside the terminal system — which catches yard blending. |
| § 60010 | “Position holder.” | A terminaling or storage contract makes you a position holder, and therefore a supplier. |
| § 60048.1 | “Tax-paid fuel.” | Temperature-corrected or volumetric — the measurement basis your credit and refund arithmetic has to follow. |
The tax, and when it attaches
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 60050 | Levy of tax. A version repealed by AB 105 prints above the operative text. | 16¢ base, plus 20¢ from 1 November 2017, indexed every 1 July from 2020 and rounded to the nearest tenth of a cent. |
| § 60051 | Levy of tax; rack removal. | The ordinary load: removal at the rack from a terminal in this state. |
| § 60052 | Levy of tax; other. | Refinery removal, entry into the state, sale to an unregistered person, and blended fuel taxed on the excess over gallons already taxed. |
| § 60055 | Blender liability. | Puts the blending tax on the jobber who blended. |
| § 60058 | Backup tax. | The dyed-fuel trap: dyed fuel, refund-claimed fuel or any untaxed liquid delivered into a highway vehicle’s tank, and the sale-plus-delivery of dyed fuel. |
| § 60061 | Enterer liability. | The importing jobber pays. |
| § 60064 | Presumption of removal. | Fuel received, imported or blended and no longer in your possession is presumed removed or sold. This is the presumption you rebut on an inventory shortage. |
Dye, and what it costs to get it wrong
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 60100 | Exemptions. | Dyed-fuel removal by a registrant, registrant-to-registrant bulk transfers, exports, the backup-tax carve-outs for farming, exempt bus, off-highway and government, consular sales, train operators, and sales to the United States. |
| § 60101 | Dyed fuel exemption. | The dye rules, and the flat prohibition on operating on a public highway with dyed diesel in the tank — excepting registered qualified highway vehicle operators, exempt bus operators and government entities. |
| § 60102 | Dyed fuel notice. | The exact legend — DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE — that you must give your buyer and post on a retail pump. A direct jobber duty. |
| § 60103 | Form of notice. | On the shipping papers, the bills of lading and the invoices, by the time of removal or sale. |
| § 60105 | Dyed diesel fuel penalties. | The greater of $10 a gallon or $1,000 times the number of penalties already imposed — and officers, employees and agents are jointly and severally liable. |
| § 60106 | Train operator exemption. | The certificate the supplier has to retain. |
| § 60108 | Government entity payment. | A government entity using exempt fuel on the highway still pays an amount equal to the tax — so the sale is not simply tax-free downstream. |
| § 60361.5 | Immediate liability for backup tax. | What a roadside dyed-fuel hit costs: the backup tax immediately, plus 25% or $500, whichever is greater. Only the largest of the overlapping penalties applies, and reasonable cause can relieve it. |
Refunds and credits
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 60501 | Overpayments; credits and refunds. | Tax-paid fuel lost, exported, or used non-taxably other than farming and exempt bus — including loss in the ordinary course of handling, transportation or storage. |
| § 60502 | Refund; ultimate vendor. | Your own claim on tax-paid undyed fuel sold to farmers or exempt bus operators. Needs a registered vendor, an original invoice, both permit numbers, the farmer’s FEIN, a no-visible-dye statement, and a statement that you did not collect the tax. Minimum claim $200. |
| § 60502.1 | Prohibition of tax reimbursement. | You may not put the tax in the price or on the invoice to the ultimate purchaser. Break this and the refund is void. |
| § 60502.2 | Tax; exempt bus operators. | Exempt bus operators still owe one cent a gallon on the fuel. |
| § 60503 | Form of exemption certificate. | The farming and exempt-bus certificate. It expires one year after its effective date, or when a new one is given, whichever is earlier. |
| § 60504 | Trace amounts of dyed fuel. | A de minimis quantity of dye is not visible evidence of dye — which protects a claim on a switch-loaded compartment. |
| § 60506 | Examination of books and records. | Refuse the examination and you waive the refund on the transactions in question. |
| § 60507 | Claim; limitation period. | Three years from the date of purchase, or six months after you receive an invoice for the tax if it was not invoiced at purchase, whichever is later. |
| § 60508 | Credit allowed on supplier’s return. | A licensed supplier takes it as a credit on the return instead of filing a claim. |
| § 60512 | Claim payment deadline. | CDTFA must pay a properly completed ultimate-vendor claim within 20 calendar days. Worth knowing when it does not. |
| § 60522 | Credits and refunds; claim; limitation periods. | The separate overpayment clock: three years from the last day of the month following the period, or six months from finality or from the overpayment, whichever is later. |
Licences, returns and records
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 60131 | Supplier license. | Unlawful to be a supplier without one. |
| § 60151 | Ultimate vendor license. | Required to act as an ultimate vendor — though a supplier’s licence can cover it, which matters if you hold both roles. |
| § 60153 | Requirements. | CDTFA grants the licence only if it is satisfied with your filing, deposit, payment and claim history across all state taxes. |
| § 60401 | Security. | Up to three times estimated average monthly liability, capped at $1,000,000, releasable after three clean years. |
| § 60201 | Return. | Monthly, due on or before the last day of the calendar month following the period. |
| § 60207 | Penalty. | 10% late payment plus interest, 10% late filing, capped at 10% for any one return. |
| § 60301 | Determination; failure to file return; penalty. | CDTFA estimates and adds 10%. |
| § 60604 | Records. | Everyone dealing in, removing, transporting or storing diesel keeps records. Failing to is a misdemeanour. No retention period is stated here. |
| § 60605 | Information to retain. | Terminal operator rack records, including dye status: three months at the terminal, then four more years. The only explicit retention period in the part. |
| § 60606 | Examination of books and records by board. | Books, records and equipment, plus the disposition you made of the fuel. |
Part 3 · § 8601–9355
Use Fuel Tax Law
Everything else that propels a vehicle: propane, natural gas, ethanol, methanol, kerosene. The structure is different from the other two — the tax is on the use, and you collect it at the nozzle as a vendor rather than paying it at a rack.
The tax attaches when fuel goes into a propulsion tank. Deliver the same propane into a bulk tank and it is not a taxable use, which is why the keylock presumption in 8732 matters so much on an unattended island.
Scope, and who you are under this part
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 8604 | “Fuel.” | Any combustible gas or liquid used to propel a vehicle except what is taxed under Part 2 or Part 31. This is the section that pulls propane, CNG, LNG, ethanol, methanol and kerosene in here. |
| § 8607 | “Use” | Placing fuel into a propulsion receptacle. The taxable event happens at your nozzle, not at the meter. |
| § 8608 | “User” | Who the user is, and the carve-outs for passenger vehicles and light commercial vehicles — provided the fuel was bought from and delivered by a vendor. Your customers are relying on you collecting. |
| § 8610 | “Vendor” | Selling fuel in-state and putting it into a propulsion receptacle. This is the section that makes you a vendor. |
| § 8603 | “Motor vehicle” | Self-propelled and operable on a highway, excluding rail. Decides whether the unit you just filled is taxable equipment. |
| § 8612 | “Fuel tank” | Propulsion tank versus cargo tank — the distinction that governs a bulk delivery. |
| § 8613 | “Natural gas” | Covers both CNG and LNG. |
| § 8615 | “Standard pressure and temperature” | 14.73 psi at 60°F. Your metering and your invoices have to reconcile to it. |
Rates
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 8651 | Levy of tax A version repealed in 1990 prints above the operative text. | The base rate, 18¢ a gallon since 1 January 1994. Kerosene and anything else without its own rate lands here. |
| § 8651.5 | Rate | LPG at 6¢ a gallon — and it does not apply at all for any period the owner has paid the annual flat rate. The single most important rate section for a propane jobber. |
| § 8651.6 | Rate; natural gas | CNG and LNG rates, with a safe harbour: a written representation from the customer that the flat rate was prepaid relieves you of collecting. |
| § 8651.7 | Flat rate | The annual flat-rate election by unladen weight, in place of per-gallon tax. Check this before deciding not to collect. |
| § 8651.8 | Rate; ethanol or methanol | Half the 8651 rate, where the fuel contains no more than 15% gasoline or diesel. |
| § 8651.4 | Rate; dimethyl ether-liquefied petroleum gas fuel blend A wholly different repealed section prints above it, and the table of contents still shows the old heading. | 6¢ a gallon from 1 July 2021, with the same written-representation safe harbour. |
Exemptions
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 8652 | Exemptions; agricultural and construction operations | Implements of husbandry moving between nearby farms, construction equipment inside a project site, and fuel used for anything other than propelling a vehicle. |
| § 8653 | Exemptions; operations off the highway | The straight off-highway exemption, on proof. The basis for a forklift or yard-equipment claim. |
| § 8653.1 | Exemptions; operations on United States Department of Agriculture roads | For forestry and timber-haul customers who pay toward those roads. |
| § 8654 | Exemptions; public agency operating on military reservation | Federally built and maintained highways inside a reservation. The portion of a continuous trip outside is still taxed. |
| § 8655 | Exemptions; transit district, passenger stage corporation, and common carrier | The Mills-Hayes transit exemption, which still carries a one cent a gallon payment. Amended by SB 359 with effect from 1 October 2025 — anything written before then is stale. |
| § 8657 | Alcohol used in or as fuel to propel a motor vehicle | Alcohol made for motor fuel is taxed here rather than under the alcoholic beverage tax. |
Permits, collection and returns
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 8711 | To whom issued | You must hold a vendor use fuel tax permit before dispensing into a vehicle tank. |
| § 8701 | To whom issued | The user permit your fleet customers must hold. |
| § 8714 | Revocation or suspension; notice; reissuance | Ten days’ notice and a hearing, and a $50 fee to get it back. |
| § 8716 | Notification; cease operations; transfers | Sell the business without surrendering the permit, and if the buyer uses it with your knowledge you stay liable for the tax, the interest and the penalties. Read this before a sale. |
| § 8732 | Collection by vendor; receipt | Collect at the sale and give a receipt — and fuel through an unattended or keylock mechanism is presumed delivered into a vehicle tank unless the customer certifies in writing that it went to bulk. |
| § 8732.5 | Credit for bad debt losses | Relief on accounts charged off for income tax purposes, with recovered accounts reported back. |
| § 8733 | Tax as debt | The tax you were required to collect is a debt you owe the state, whether or not you actually collected it. |
| § 8751 | Due date of tax | Quarterly, on or before the last day of the month following the quarter. |
| § 8752 | Filing monthly returns | The heading is a legacy artifact — the operative text has required quarterly returns since 1996. File monthly on the strength of the heading and you have misread it. |
| § 8760 | Electronic funds transfer payments | Mandatory once liability averages $20,000 a month, with its own 10% penalties. |
| § 8876 | Interest and penalties | 10% late payment plus interest, 10% late filing, capped at 10% for any one return. |
| § 8877 | Reasonable cause for delay; relief | Relief on a statement under penalty of perjury, and automatically in a declared emergency. |
Refunds and records
| Section | As CDTFA heads it | What it means for a jobber |
|---|---|---|
| § 9151 | Overpayments; credits and refunds | Where a user overpaid you and holds your receipt, the state credits or refunds the user directly. |
| § 9151.5 | Excess tax reimbursement | Bill tax on an exempt sale and you must give it back to the customer — or remit it to the state. Direct exposure on mis-billed agricultural propane. |
| § 9152 | Claims; limitation period | Three years from the last day of the month following the period, or six months from finality or from the overpayment, whichever is later. |
| § 9152.3 | Refund claim where tax has not been paid in full; timely filing | Protects a claim without having to pay the determination in full first. |
| § 9253 | Records of users and every person dealing in fuel | Reaches your bobtails, your bulk plant and your storage — not just the dispenser. No retention period is stated here. |
| § 9254 | Examination of records by board | Books, papers, records and equipment, and the disposition you made of the fuel. |
| § 9355 | Limitation period | Criminal prosecution within three years of the offence, or two years after discovery, whichever is later. |
Rates
What the rates are today
The excise rates are indexed and move every 1 July. These were read from CDTFA on 21 August 2026. Before you rely on one, check it — that is what the link is for.
Excise tax
| Fuel | Rate | Period CDTFA states | Section |
|---|---|---|---|
| Gasoline (motor vehicle fuel) | $0.634 per gallon | 1 July 2026 – 30 June 2027 | § 7360 |
| Aviation gasoline | $0.197 per gallon | from 1 July 2026 | § 7360 |
| Aircraft jet fuel | $0.02 per gallon | since December 1969, not indexed | § 7392 |
| Diesel | $0.482 per gallon | from 1 July 2026 | § 60050 |
| Use fuel, general (kerosene and others) | $0.18 per gallon | since January 1994 | § 8651 |
| LPG / propane | $0.06 per gallon | since 1966 | § 8651.5 |
| CNG | $0.0887 per 126.67 cubic feet | since January 2015 | § 8651.6 |
| LNG | $0.1017 per 6.06 pounds | since January 2015 | § 8651.6 |
| Ethanol or methanol | $0.09 per gallon | half the general use fuel rate | § 8651.8 |
Sales tax on fuel
This is the side TaxTraks works on, and the side where the money usually is. Four different rates apply to what is physically the same product, and the difference between them is a certificate and a colour.
| Fuel | Rate | Why |
|---|---|---|
| Gasoline | 2.25% plus district tax | Exempt from the state rate under § 6357.7 |
| Clear diesel | 13.00% plus district tax | 7.25% base plus the 5.75% additional state tax under § 6051.8 |
| Diesel used in farming and food processing | 2.25% plus district tax | Partially exempt under § 6357.1 |
| Dyed diesel | 7.25% plus district tax | Escapes the § 6051.8 increase under § 6357.3 |
| Aircraft jet fuel | 7.25% plus district tax | The ordinary base rate |
District taxes are on top of every one of these, and they change mid-quarter. The district rate table in the Online Tools keeps up with them.
Knowing the section is not the same as getting the money back
Most of what we recover is on this page somewhere — a farm diesel exemption never claimed, a prepayment credit never taken, a partial exemption deducted instead of credited. Finding it in a filed return, and carrying the claim through to a refund, is the work.