Numerous opportunities exist for federal, state, county and municipal agencies (including Native American tribal governments) to lower their fuel costs though fuel tax recovery. A thorough review of your agency’s fuel use and purchasing practices may uncover significant tax savings.
Diesel Fuel – Recovery Opportunities
Over the past decade, fleet fuel cards have helped government fleets avoid most federal and state taxes on the purchase of gasoline from retail fuel providers. However, the same cannot be said for federal excise taxes levied on diesel fuel. Most fuel cards will not allow governmental agencies to purchase diesel fuel net of tax. The current federal excise tax on un-dyed diesel fuel is 24.4 cents a gallon. Recouping these taxes can significantly reduce your fuel costs.
The mechanism for recouping tax on undyed diesel fuel becomes an administrative burden that many agencies are not adequately staffed or trained to undertake. Unlike commercial fleets, government agencies cannot file for refunds directly with the IRS. Instead, they must file periodic refund claims with each retail vendor who sold them diesel fuel. This can result in a government fleet preparing hundreds of refund claims for a single period. Each claim must be supported with a signed certificate and detailed documentation. After claims have been filed, follow up is critical. To assure timely payment, a centralized collections process needs to be implemented to assure the each claim is tracked and paid.
Adding to the problem is the fact that many fuel vendors are simply not familiar with the laws pertaining to diesel tax recovery for government agencies. Before refund claims can be mailed, each vendor needs to be contacted. The vendor’s tax representative will typically need to be educated. It is critical that detailed procedures for filing claims are established with the tax representative including:
- Frequency of refund claim reporting
- Information required in refund submission
- Where to send refund claim
- When refund claim will be paid
- Who to call regarding unpaid claims
CSI Voyager Fleet’s Government Fuel Tax Recovery services can provide you with a cost-effective alternative to this massive undertaking. Our technical knowledge and proven systems allow us to maximize your recovery of taxes and minimize the burden on your organization.
We are so confident in our ability to save you money that we offer our services on a contingency fee basis, which means we don’t get paid until you get paid. There are no up-front fees, travel costs or out of pocket expenses. This contract structure assures you that we have a mutual interest to maximize your tax savings and file claims on a timely basis.
We would be happy to perform a complementary review of your tax refund opportunities.
Click here to contact a Fuel Tax Recovery representative
CSI Voyager Fleet
10405 Los Alamitos Blvd.
Los Alamitos, CA 90720