296A.08 SPECIAL FUEL TAX.
Subdivision 1. Tax imposed.
(a) There is imposed an excise tax on all special fuel at the
rates specified in subdivision 2. For purposes of this section, "owner or operator" means the
operation of licensed motor vehicles, whether loaded or empty, whether for compensation or not
for compensation, and whether owned by or leased to the motor carrier who operates them or
causes them to be operated.
(b) For undyed diesel fuel and undyed kerosene, the tax is imposed on the first licensed
distributor who received the product in Minnesota.
(c) For dyed fuel being used illegally in a licensed motor vehicle, the tax is imposed on
the owner or operator of the motor vehicle.
(d) For dyed fuel used in a motor vehicle but subject to a federal exemption, although no
federal tax may be imposed, the owner or operator of the vehicle is liable for the state tax.
(e) For other fuels, including jet fuel, propane, and compressed natural gas, the tax is
imposed on the distributor, special fuel dealer, or bulk purchaser.
(f) Any person delivering special fuel on which the excise tax has not previously been paid,
into the supply tank of an aircraft or a licensed motor vehicle shall report such delivery and shall
pay, or collect and pay the excise tax on the special fuel so delivered to the commissioner.
Subd. 2. Rate of tax.
The special fuel excise tax is imposed at the following rates:
(a) Liquefied petroleum gas or propane is taxed at the rate of 15 cents per gallon.
(b) Liquefied natural gas is taxed at the rate of 12 cents per gallon.
(c) Compressed natural gas is taxed at the rate of $1.739 per thousand cubic feet; or 20
cents per gasoline equivalent, as defined by the National Conference on Weights and Measures,
pounds of natural gas.
(d) All other special fuel is taxed at the same rate as the gasoline excise tax as specified in
296A.07, subdivision 2
. The tax is payable in the form and manner prescribed by the
Subd. 3. Exemptions.
The provisions of subdivisions 1 and 2 do not apply to special fuel
or alternative fuels purchased by:
(1) a transit system or transit provider receiving financial assistance or reimbursement under
256B.0625, subdivision 17
(2) an ambulance service licensed under chapter 144E.
Subd. 4. Tax imposed on use.
If it is determined by the commissioner from an examination
of any records pertaining to the operation of any licensed motor vehicle which uses special fuel,
that the special fuel tax on the special fuel used in this state has not been paid to this state, or
to any other state if purchased in such other state, there is hereby imposed an excise tax at the
same rate per gallon as the gasoline tax, on all such special fuel. All assessments of tax made
under this subdivision shall be paid by the user to the commissioner upon demand. For purposes
of this subdivision, "special fuel" means any fuel other than gasoline used in a licensed motor
vehicle in this state.
Subd. 5. Intended use.
All special fuel except that used for aviation fuel shall be deemed to
be intended for use in a licensed motor vehicle in this state at the time of sale or delivery.
Subd. 6. Liability for failure to keep adequate records.
If adequate records are not kept,
or if the sales are not adequately accounted for, then all sales of combustible gases and liquid
petroleum products, except gasoline, are deemed to be sales of special fuel. In such cases, there is
imposed an excise tax of the same rate per gallon as the gasoline excise tax on all such products,
and the vendor is liable for the tax.
History: 1998 c 299 s 8; 1Sp2001 c 5 art 13 s 6