Field Notes Blog > PA Gas Tax . . . Get your money back, farmer

  • PA Gas Tax . . . Get your money back, farmer

    April 16, 2018

    Featured Guest Writers: Leslie Hoover and Kenny Nearhoof, AgChoice accounting officers

    Two gas stations sit on opposite sides of the street. Gas Station A has regular unleaded gasoline for $2.65/gallon while Gas Station B has the same type of gasoline for $2.63/gallon. Why are they different prices?

    The answer is complex because of the variables factoring into fuel pricing, similar to milk or corn pricing. One fuel price variable in Pennsylvania is the Oil Company Franchise Tax consumers pay on gasoline, undyed diesel fuel and undyed kerosene. The tax helps the state fund paving, bridge repairs and other infrastructure needs. However, farmers can get that tax back!

    The PA Department of Revenue has determined that, “the tax paid on such fuel [gasoline and undyed diesel] used in farm machinery for the production of farm products can be reimbursed to the farmer upon submission of a claim.”

    To submit a proper claim, remember the following important information.

    • Register with the state: To receive the correct claim form, a farmer must submit basic information (full name and address). A farmer must register by letter with the Commonwealth of PA, Board of Finance and Revenue. After registration, the state mails a claim form to the farmer. The farmer completes the claim form and submits it to the PA Department of Revenue by September 30. 
    • Keep fuel receipts: For any fuel purchases, include copies of receipts with the claim. Print the receipts, as the state will not accept handwritten receipts. The receipt also must show the type and quantity of fuel purchased. It can be a receipt from a gas station or a bulk receipt from an on-farm delivery vendor. Special Note - the receipt also must prove that the fuel was purchased within a 25-mile radius of the farm.
    • Use the fiscal year: The credit is based on a fiscal year of July 1 – June 30. For example, 2016 claims filed were for July 1, 2015 - June 30, 2016. The use of a fiscal year helps account for pricing changes and aligns better with the state’s fiscal year.
    • Record machinery usage: An accurate claim form must list the machinery that the purchased fuel powered. This list also includes how many gallons of fuel that machine used. For example, “John Deere 6x4 Gator used 189 gallons of gasoline.”

    For claims submitted in 2016, the refund per gallon of gasoline was $0.505 or $0.503, depending on the date of purchase. When either of those prices are multiplied by the amount of fuel used, taking the time to fill out a claim form and keeping accurate records is easily worth it.

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