SC Department of Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Frequently Asked Questions

 

Motor Fuel Frequently Asked Questions

   IMPOSITION AND MOTOR FUEL USER FEE RATE
   LICENSING
   ELIGIBLE PURCHASER STATUS
   KEROSENE
   BIODIESEL

   ETHANOL
   FILING AND PAYING MOTOR FUEL USER FEE
   RECORD KEEPING
   REFUNDS

   EXEMPTIONS
   DIVERSIONS

   IMPORTS

   MOTOR FUEL / SALES TAX
   INTERNATIONAL FUEL TAX AGREEMENT (IFTA)
   OTHER AGENCIES

DISCLAIMER

These FAQs are written in general terms for widest possible use. They are intended as a guide only, and the application of their answers to specific situations will depend on the particular circumstances involved. These FAQs may not be relied on as a substitute for obtaining professional advice and researching original sources of authority. No information in these FAQs supersedes, alter, or otherwise change provisions of the South Carolina code, regulations or Department advisory opinions.

IMPOSITION AND MOTOR FUEL USER FEE RATE

What is the motor fuel user fee rate for gasoline and diesel?
The motor fuel user fee is 16 cents per gallon for both products.

Does South Carolina impose any environmental fees on petroleum products?
Yes. An inspection fee in the amount of $.0025 and an environmental impact fee of $.0050 are imposed on all petroleum products. Compressed natural gas and liquefied natural gas are subject to these fees. These fees are not imposed on liquid propane gas.

When are the motor fuel user fee and other applicable fees due on motor fuel in SC?
The user fee, inspection fee and environmental impact fee are due when motor fuel product is removed from the terminal for delivery to a South Carolina destination or when product is delivered from an out of state bulk plant to a South Carolina destination.

Are state agencies exempt from the South Carolina motor fuel user fee?
There is not a general exemption in the Motor Fuel Code for state agencies.  

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LICENSING

What motor fuel licenses are required?
Below is a list of the South Carolina motor fuel licenses. Please call the Motor Fuel Section for assistance in determining the license or licenses required.

  • Supplier
  • Permissive Supplier
  • Terminal Operator
  • Out of State Terminal Operator
  • Exporter
  • Intrastate Transporter
  • Interstate Transporter
  • Occasional Importer
  • Tankwagon Operator Importer
  • Bonded Importer
  • Fuel Vendor
  • Fuel Vendor Blender
  • Miscellaneous
  • Manufacturer ( Biodiesel & Substitute Fuels)

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ELIGIBLE PURCHASER STATUS

What is “eligible purchaser status”?
Eligible purchaser status is a provision of the South Carolina motor fuel law that entitles the approved fuel vendor to receive deferred payment of the user fee and other applicable fees from the terminal supplier. The terminal supplier is required to defer the charge of the motor fuel user fee and other applicable fees until one day before they are required to remit the amounts to the Department of Revenue. A fuel vendor with eligible purchaser status also qualifies for the tare allowance refund on purchases of South Carolina user fee paid gasoline and low sulfur diesel purchased directly from terminal suppliers.

How does a fuel vendor apply for “eligible purchaser status”?
The fuel vendor may apply for the eligible purchaser status by submitting an approval form and a bond equal to a three month average liability to their suppliers or a qualifying financial statement to the Department of Revenue. The approval form, bond form and the qualifications for the financial statement may be obtained by calling the Motor Fuel Section.
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KEROSENE

Is kerosene subject to the motor fuel user fee?
Kerosene is not subject to the motor fuel user fee of 16 cents per gallon unless it is placed into the fuel supply tank of a highway vehicle or blended with motor fuel which is subject to the motor fuel user fee.  Those using kerosene in this manner are required to obtain the appropriate motor fuel license and remit the motor fuel user fee directly to the Department of Revenue. Contact the Motor Fuel Section for instructions on remitting the user fee.

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BIODIESEL

Is Biodiesel subject to the motor fuel user fee?
Yes.  Effective July 1, 2006 biodiesel was included in the definition of diesel fuel and is subject to the motor fuel user fee and other applicable fees in the same manner as diesel.  South Carolina manufacturers/producers of the biodiesel and importers of biodiesel are required to obtain the appropriate license and remit the motor fuel user fee and other applicable fees directly to the Department of Revenue.

If biodiesel is made for use in personal motor vehicles and is not being sold, is there a license required and does the 16 cent motor fuel user fee have to be paid to the Department of Revenue?
Yes there is a licensing and payment requirement for biodiesel used in personal motor vehicles.  A miscellaneous motor fuel license is required.  There is no fee or bond for the license.  A monthly report must be filed and the motor fuel user fee (.16) and other applicable fees (.0075) must be remitted on the total gallons used in motor vehicles for the month.  A zero report must be filed if there is no activity.  Contact the Motor Fuel Section for a license application.
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ETHANOL

Is Fuel Grade Ethanol subject to the motor fuel user fee?
Ethanol is not subject to the motor fuel user fee of 16 cents per gallon until it is blended with a motor fuel subject to the user fee.  Blenders engaged in blending ethanol with products subject to the motor fuel user fee are required to obtain the appropriate license and remit the motor fuel user fee and other applicable fees directly to the Department of Revenue.

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FILING AND PAYING MOTOR FUEL USER FEE

How is the motor fuel user fee paid to the state?
The majority of the motor fuel user fee is paid by the terminal supplier on the 22nd day of each month for the prior month’s activity. The user fee is reported and remitted on the L-2119 Supplier Monthly Return and is remitted by EFT payment. Electronic filing options are available.
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RECORD KEEPING

What records are fuel vendors and retail outlets required to keep and how long must the records be retained?
Fuel vendors and retail outlets are required to keep terminal issued shipping papers for 30 days at the retail location (SC Code 12-28-1515). Additionally, they are required to maintain records of taxable motor fuel dispensed at their location sufficiently to enable the Department to determine the volumes dispensed with reasonable accuracy [SC Code 12-28-1515(A)]. These records are required to be retained for 3 years on site or off site.
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REFUNDS

What motor fuel refunds are available?

  • Form # L-2133 – Motor Fuel Refund Application
    Sales to or purchases by the United States Government, its agencies or instrumentalities.
    Sales or purchases for State owned buses or vehicles use in pupil transportation.
    Sales or purchases for State funded institutions of higher learning for student transportation.
    Sales to or purchases by a Regional Transportation Authority
    Motor fuel diverted to another state.
    Contaminated product.
    Gasoline used by commercial shrimp boats.
  • Form # L-2131 Refund for Gasoline Use for Aviation Purposes
    Gasoline used for aviation purposes. 
  • Form # L-304 Information Return for Refund of Gasoline Use in Farm Operations
  • Form # L- 301 Refund for Farm Gas Fee
    Gasoline used in farm tractors or other farm equipment used in planting cultivating and harvesting.
  • Form #L-325 Refund of Motor Fee User Fee on Diesel Used in Non-Highway Equipment
    Diesel fuel used in farm tractors and non-highway equipment.  The non-highway equipment submitted on the L-325 should have its own fuel supply tank.
  • Form # L-2087 Refund of Motor Fuel User Fee Used in Trucking Equipment
    Diesel fuel used in trucking equipment also know as power take off equipment or auxiliary equipment which runs off the same fuel supply tank as the engine of the motor vehicle to which it is attached.
  • Form # L-2117 Tare Allowance Refund
    This refund is available to fuel vendors with eligible purchaser status.  See additional information concern Tare Allowance Refunds below.

If I am not required to have a motor fuel license, how do I get a file number to obtain a refund?
A refund registration form L-2140 is required to be submitted for refund applicants that do not have a motor fuel license.  This form allows the Motor Fuel Section to establish a refund account for the applicant.  The form is only required to be submitted with applicants first refund claim.

What is a tare allowance refund?
A tare allowance refund is a refund that is allowed to a fuel vendor with eligible purchaser status to offset thermal shrinkage and measurement differences occurring after the removal of the motor fuel subject to the user fee from the terminal. The amount of the tare allowance refund is equal to.0265 of the user fee imposed not to exceed $2,000.00 a month.  The refund is submitted quarterly.  The refund should be applied for using the L-2117 Tare Allowance Refund Application along with the required back up schedule L-2118 Eligible Purchaser Schedule of Motor Fuel Purchases.

Is there a refund for the user fee on gasoline used for off road vehicles, equipment, or boats?
No. All gasoline is subject to the motor fuel user fee unless there is a specific exemption provision for the sale or use.

When can the tax on gasoline be refunded?
There are exemption and refund provisions for:

  • Gasoline sold to or used by United States Government, its agencies or instrumentalities.
  • Gasoline used in tractors or other farm equipment.
  • Gasoline sold for use in state owned school buses and services vehicles.
  • Gasoline sold for use by institutions of higher learning for student transportation.
  • Gasoline used for aviation purposes.
  • Gasoline used by commercial shrimp boats.
  • Gasoline sold or used by SC regional transportation authorities.

How do I get refund forms?
A variety of online Motor Fuel forms are available, or
contact the Motor Fuel Section.

How long do I have to apply for a refund?
The statute of limitations for filing for a motor fuel refund is three years from the date the motor fuel was purchased.

How long will it take to receive my refund?
Refunds for sales to or purchases by the United States Government are required to be issued within 30 days from the date they are received.  All other refunds are issued as soon as possible depending on the current work load of the Motor Fuel Section. Refunds not issued within 75 days from the date received will include interest when the refund is issued.

Is there a refund for motor fuel user fee on undyed low sulfur diesel used in refrigerated (reefer) units?
Yes. A refund of 100% of the user fee is available for low sulfur diesel placed into a separate tank for the reefer unit. Use refund application L-325 (non-highway). There is a refund of a percentage of the user fee for low sulfur diesel when the reefer unit operates from the same fuel supply tank as the engine of the vehicle. Use refund application L-2087 (trucking).

Is there a refund for power take off equipment/auxiliary equipment?
A refund is available for a certain percentage of the user fee on diesel, gasoline or propane when the equipment operates from the same fuel supply tank. Use refund application form L-2087.
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EXEMPTIONS

Are counties and cities exempt from the South Carolina motor fuel user fee?
No.  There is not a provision for exemption for these entities.

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DIVERSIONS

What is a diversion?
A diversion occurs when fuel is delivered to a state other than the destination state printed on the terminal issued bill of lading.

How do I report a diversion?
If motor fuel needs to be diverted to a different destination state from the one stated on the shipping document, the carrier must obtain a diversion number by registering the diversion with TRAC III.  TRAC III is a web based system and does not offer a call-in option.  Diversions that occur after office hours must be registered the next business day.

Registering A Diversionwww.trac3.net
In order to register a diversion of fuel, go to
www.trac3.net and click on “Registration”, enter the requested company data (for the initial registration only).  Then follow the simple steps.  The TRAC III database will maintain basic company name and address information for carriers and fuel marketers after the initial diversion registration.  A drop-down box for federal Terminal Code Numbers (TCN’s) is provided to assist in diversion registration.  Diversion registration information can easily be verified by selecting the “Confirm” option.  There is no cost to register a diversion; however, a TRAC III membership can be purchased for access to additional benefits of the system.  

Can the same diversion number be used for South Carolina and North Carolina?
No.  The two states use different diversion registry systems.  You will need to contact FuelTracIII  on line for South Carolina and contact North Carolina for their diversion requirements.

Who is liable for a diversion?
The purchaser is jointly liable with the shipper, importer, the transporter and the shipper’s agent for the motor fuel user fee and other applicable fees on diverted product. Transporters and carriers that transport diverted product without a diversion number recorded on the original bill of lading may be subject to additional penalties.

How are payments made or refunds handled for diverted products?
When product is diverted from the destination state listed on the original issued shipping
document and a diversion number has been received, the purchaser of the product diverted must handle the diversion direct through the Department of Revenue.

How do you pay the Department of Revenue for a diversion?
When the diversion results in a liability to South Carolina, the purchaser must pay directly to the Department of Revenue on the Three Day Payment Voucher form L-2109.

Do not combine diversions together on one payment voucher.  You must file a payment voucher for each load or portion of a load diverted.  A payment voucher must be received for each diversion number you obtain in order to make sure that the payment is properly recorded.  One check for the entire payment may be submitted.

How do you obtain a refund from the Department of Revenue for a diversion?
When the diversion results in a refund, a refund may be requested by submitting a completed L-2133 Motor Fuel Refund application. Refunds will not be considered without a valid diversion number and a copy of the bill of lading.  You should combine diversions for the same period covered on one refund application to expedite the processing of the refund.

Please Note: Refunds must be applied for on form L-2133.  Refunds are not automatically issued by SCDOR from the diversion registry information.

Can my supplier re-bill me for the diversion ?
No.  Effective July 1, 2006 the provision for re-bill was repealed.  Diversions cannot be re-billed by the supplier.

What is the difference between a supplier billing error and a diversion?
Diversions verses Supplier Billing Error
To determine if a diversion has taken place or if the supplier has billed the incorrect state’s tax/user fee in error, you should verify the destination state recorded on the original bill of lading.
          Diversion:  The original destination state will be different than the state the product was  delivered to and the supplier would have billed the original destination state tax/user fee as shown on the bill of lading.  Example:  Original destination on bill of lading is South Carolina but the product was delivered to North Carolina and supplier correctly billed South Carolina motor fuel user fee.
          Supplier Billing Error:  The original destination state on the bill of lading will be the same as the state the product was delivered to and the supplier would have billed another  states tax/user fee.  Example:  Original destination on bill of lading is South Carolina and the product was delivered to South Carolina but the supplier incorrectly billed North Carolina tax. 
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IMPORTS

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MOTOR FUEL / SALES TAX

Is gasoline and diesel fuel purchased at retail subject to the South Carolina sales tax?
No.  Gasoline and diesel fuel are exempt from the South Carolina sales tax as long as the 16 cents per gallon motor fuel user fee is included in the price of the fuel at the time of purchase.

Are there any motor fuel products that are subject to the South Carolina sales tax?
Yes.  Kerosene, high sulfur diesel and dye low sulfur diesel are not subject to the 16 cent motor fuel user fee at the time of the sale and would therefore, be subject to the sales tax.
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INTERNATIONAL FUEL TAX AGREEMENT (IFTA)

Does the South Carolina Department of Revenue handle IFTA & IRP?
No.  These programs are administered by the South Carolina Department of Motor Vehicles. Please contact them at (803) 896-3870 for assistance.

How do I register for IFTA and obtain a decal?
The South Carolina Department of Motor Vehicles is charged with administering IFTA and the International Registration Plan (IRP) in South Carolina. Contact them at (803) 896-3870.
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OTHER AGENCIES

SC Department of Agriculture – 803-734-2210
     Retail Pump Inspections

SC DOT – 803-753-6250
     Oversize Load Permits

SC DMV – 803-896-3871
     IFTA & IRP

Internal Revenue Service – IRS – Federal  www.irs.gov
     Federal Motor Fuel Excise Tax
     Form 2290 – Heavy Highway Vehicle Use Tax Return
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