Tax Rebates and Exemptions

Fuel Tax Exemptions

Below you will find several different forms that you may use to file for fuel tax credits or rebate payments. Generally the filing is done annually along with your company’s business income taxes using Form 4136 (for tax credits), but you can also file annually on fuel and any other applicable excise taxes (for rebate payments) using Form 8849 along with the appropriate attachment (schedule 1 in your case). If you want to file quarterly you can use Form 720.

As a reminder, effective January 1, 2005, the ability of bus operators to use dyed diesel fuel and pay the $0.074-per-gallon backup tax is eliminated. As under prior law, an income tax credit or payment of $0.17 per gallon is allowable if undyed diesel fuel (which is normally taxed at $0.244 per gallon) or undyed kerosene is used for this purpose. In addition, if the ultimate purchaser of undyed diesel fuel or undyed kerosene used in a bus waives its right to an income tax credit or a payment (waiver form), and assigns such right to the registered ultimate vendor, then the ultimate vendor, and not the ultimate purchaser, may claim a payment or an income tax credit. IRS Publication 510 is also included and has all of the necessary guidance for answering most questions regarding fuel taxes on diesel fuel.

For operators who may have missed out on filling for use of this exemption in the past, you may reclaim the exempted amount up to 3 years back. To claim this past amount you need to follow the instructions laid out in Publication 510 (pg. 24) and file an amended business tax return for the affected years.

Taxable Tires Exemption

A tax exists on tires sold by the manufacturer, producer, or importer at a rate of $0.0945 for every 10 pound of the maximum rated load capacity over 3,500 pounds. A taxable tire is any tire of the type used on highway vehicles that is wholly or partially made of rubber and is marked according to federal regulations for highway use.

The tax on tires does not apply to the tires used on qualifying intercity, local, and school buses. For more information regarding the exemptions related to this section, please consult IRS Publication 510 (pg. 35).

For example, a typical motorcoach steering-axle tire is load rated at 7,830 pounds and could result in a refund of $40.92.

Use IRS Form 720 (which can be filed quarterly) to file your tire tax claim.

All motorcoach tax exemption claims should be filed in conjunction with your business taxes.

Related Resources

• IRS Publication 510
• Fuel Tax Credit Form
• Instructions for Filling out the Fuel Tax Credit Form
• 2018 Quarterly Excise Tax Refund Form
• Instructions for Filling out the Quarterly Excise Tax Refund Form
• Fuel Tax Excise Tax Refund Form
• Fuel Tax Excise Tax Refund Form Schedule 1 Attachment
• Instructions for Filling out the Fuel Tax Refund Form
• Tire Tax Rebate Form
• Instructions for Tire Tax Rebate Form
• Heavy Vehicle Use Tax Form
• Instructions for Heavy Vehicle Use Tax Form