If your business purchases fuel to power vehicles and equipment for off-road activities, you may be eligible for a substantial tax refund. For every gallon of fuel purchased, there is a federal tax included in the cost. This tax is used to fund state highway production and other infrastructure improvements and maintenance. This tax, however, is only intended for vehicles used on roads and highways. Farm equipment, certain boats, trains, airplanes, and other vehicles that do not operate on roads are not subject to this tax. If your business uses vehicles such as these, or even certain stationary equipment like compressors and generators, you may qualify for this Off Road Fuel Credit.

In most cases, the credit is extremely easy to calculate. Qualifying for the credit requires that you include the number of gallons used, the dates of purchase, the name and address of the fuel supplier, and also the purpose that the fuel was used for. If your business does qualify for this credit, the refund could be significant. The federal tax on fuel is $0.184 per gallon for gasoline, $0.244 per gallon for clear diesel, and $0.244 per gallon for clear kerosene. Depending on how many gallons that your business consumes, simple math shows that utilization of this credit could result in a sizable refund. Depending on the state that you are operating in, this refund could be even larger.

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This Off Road Fuel Credit is a quick and easy way to gain a potentially significant refund and avoid paying unnecessary taxes. If you think that your business qualifies for this refund, the Barnes Dennig Tax Team would be happy to evaluate and answer any questions that you may have. Have a Barnes Dennig tax specialist reach out to you by clicking here.