The following definitions apply in this chapter:

(1) "Act" means the "Ethanol Tax Incentive and Administration Act," Title 15, chapter 70, part 5, MCA.

(2) "Automobile" is a self-propelled passenger vehicle that usually has four wheels and an internal combustion engine and is not a pick-up truck or truck. This vehicle is commonly referred to as a car or automobile.

(3) "Bulk storage" means a container or tank holding any fuels for storage, other than the supply tank of a motor vehicle or any internal combustion engine or motor fuel placed in storage at refineries or pipeline terminals.

(4) "Combination" is a motor vehicle used, designed, or maintained for transportation of persons or property and has two or more axles whose gross weight exceeds 26,000 pounds or a combination of vehicles whose combined licensed weight exceeds 26,000 pounds.

(5) "Consecutive twelve months" means state fiscal year, July 1 through June 30.

(6) "Department" means the Department of Transportation.

(7) "Division" means the administration division, Department of Transportation.

(8) "EDI" means Electronic Data Interchange.

(9) "EFT" means Electronic Funds Transfer.

(10) "Gross earned agricultural or farm income" means all taxable income and wages, before expenses, a person or business receives from: cultivating, operating, or managing a farm for gain or profit, either as owner or tenant; operating a livestock, dairy, poultry, fish, fur-bearing animals, or horticultural commodities business; operating a feed yard for the fattening of cattle; operating a fruit or truck farm; operating an agricultural commodities business; operating a plantation, ranch, range, nursery or orchard; and sale of crop shares if the person materially participates in producing the crop.

(11) "Gross earned income" means all taxable income and wages, before expenses, a person or business earns from: services, sale of goods, working for someone, or working in a business the person owns or operates. Examples of gross earned income generally include but are not limited to: wages, salaries, tips, and other taxable employee pay; union strike benefits; long-term disability benefits received prior to minimum retirement age; earnings from self-employment if the person owns or operates their own business; and gross income received as a statutory employee. Examples of gross income that are not considered earned include: passive income, such as interest, dividends, and capital gains; retirement income; social security; unemployment benefits; alimony; and child support.

(12) "Informal review" means a review by department staff to consider information and make a recommendation for disposition of an assessment or other notice to the appropriate agency administrator.

(13) "Notice" means a notice provided to the taxpayer as follows:

(a) "assessment notice" means a notice of an amount owed to the department, which may include, but is not limited to, a notice of refund reduction, notice of audit findings, tax debt, fine, penalty or interest assessment, or similar action;

(b) "notice of intent to revoke a license" means a violation of motor fuel tax or International Registration Plan statutes or rules administered by the department;

(c) "notice of cancellation" means a notice provided to a distributor, IRP, IFTA, or other department fuel tax licensee of the department's intent to cancel the license;

(d) "notice of refund reduction" means a notice stating a taxpayer's refund will be reduced from the claimed amount.

(14) "Pick-up truck" is a vehicle licensed under a flat gross vehicle weight (GVW) fee and has a manufacturer's rated capacity of 1/4 ton, 1/2 ton, 3/4 ton, or one ton. This vehicle, regardless of how it is registered and plated, is also commonly known as a pick-up truck, van, or sport utility vehicle.

(15) "Point specified" for purposes of the starting point of the temporary special fuel agricultural permit means the point where the person first crosses the border into Montana.

(16) "Radius" for purposes of measuring the area of the temporary special fuel agricultural permit is measured in air miles.

(17) "Seizure list" means a list containing the names of companies appearing on the warning list that have been issued a notice to appear for improperly importing fuel.

(18) "Special fuel" as defined in 15-70-401, MCA, includes diesel fuel, stove oils, heating oils, burner fuels, kerosene, or any other combination of hydrocarbon fuels used for the operation of motor vehicles, except fuels subject to the gasoline license tax or to the license tax on vehicles operated by liquefied petroleum gas or compressed natural gas.

(19) "Taxpayer" means "Person" as described in 15-70-401(18), MCA.

(20) "Truck" is a vehicle licensed under graduating gross vehicle weight (GVW) fees and has a manufacturer's rated capacity exceeding one ton, but not exceeding 46,000 pounds.

(21) "Warning list" means a list established and maintained by the department indicating that a warning notice has been issued to a transporter for improperly importing fuel.

(22) "Written plan" means a detailed proposed business plan providing information that allows the department to estimate the ethanol incentive tax reservation of funds.

(1) Interest on any motor fuel taxes that are paid late will not be waived or suspended.

(1) Partial payments for a customer's tax liability, including credits, apply as directed by the customer as to account type, period, or otherwise.

(2) If customer direction is not provided, the payment is applied in full to the oldest period first in the following order:

(a) first to tax (dollar for dollar until satisfied);

(b) second to interest (if due); and

(c) third to penalty (if due).

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(1) The department shall issue a notice to a taxpayer as follows:

(a) an assessment notice, stating an amount owed to the department;

(b) notice of intent to revoke or suspend, stating any violation of fuel tax or International Registration Plan statutes or rules;

(c) notice of license cancellation; or

(d) notice of refund reduction.

(2) The notice shall advise the taxpayer of the right to request review of or hearing on any notice.

(3) Notices are sent via U.S. mail or email to the taxpayer address on file with the department.

(4) An assessment notice in an amount exceeding $500, is sent via certified mail to the taxpayer's address on file with the department.

(5) If the taxpayer agrees with the notice, the matter is resolved upon compliance with, or acceptance of, the terms set forth in the notice.

(6) If the taxpayer disagrees with the notice, the taxpayer must submit a written request to the department for informal review or formal hearing within 30 days of receipt of the notice, as follows:

(a) A taxpayer may request an informal review by completing the informal review request form on the department's website.

(b) A taxpayer may request a formal hearing by written request.

(c) The request for review or hearing must be postmarked or received electronically within 30 days of the date of receipt of the notice. An extension to the deadline may be granted if both parties agree.

(d) Failure to respond within 30 days is an admission the debt in the assessment notice is due and owing, or the department determination in the notice is accepted.

(7) Informal review consists of pertinent department staff reviewing the taxpayer's request, information provided, and applicable laws and rules and making a recommendation to the appropriate department administrator. The administrator shall issue a written agency decision, which shall be mailed to the taxpayer, as follows:

(a) If the department concurs with the taxpayer, the matter is resolved by withdrawing or revising the notice.

(b) If the department disagrees with the taxpayer, the agency decision shall explain the reasons for the agency decision, in writing, and notify the taxpayer of the right to request a formal hearing. The agency decision may include an assessment for any balance owing. All agency decisions will be sent to the taxpayer through certified mail.

(c) A written request for formal hearing after informal review must be submitted to the department within 30 days of receipt of the agency decision. The taxpayer forfeits the right to a formal hearing if the taxpayer fails to submit a written request for formal hearing within the 30-day period.

(8) A formal hearing consists of a contested case proceeding under the Montana Administrative Procedure Act. After hearing or settlement, a final agency decision is issued, which may include an assessment if a balance is owing. All final agency decisions will be sent to the taxpayer through certified mail.

(1) To ensure proper receipt and credit of tax return and payment of tax, the department shall assign a unique license number to each taxpayer account based upon the taxpayer identification number provided to the department by the taxpayer. Both the tax return and payment are credited to the specific account identified within the department's electronic file, on receipt.
 

(1) The department shall adopt the Federation of Tax Administrators (FTA), Motor Fuels Tax Section; Uniformity Project standards to receive electronic funds transfer messages, and electronic data interchange which allows receipt of filed tax returns and other required information for taxpayers licensed under 15-70-402, MCA. A copy of the FTA Uniformity Project standards may be obtained at www.taxadmin.org/uniformity-project.

(2) The department shall adopt Motor Fuel Licensing/Reporting Guidelines and post a copy on the department's web page. The department shall provide each taxpayer with instruction to find the guidelines. The department shall notify each licensed taxpayer of any changes prior to implementation of those changes.

(3) A taxpayer may file the required 15-70-410, MCA, monthly statement by EDI, by manually entering detailed schedule information on the department's motor fuel system's web pages, or on paper forms prescribed by the department, for a taxpayer who qualifies under these administrative rules.

(4) The department may contract with a vendor to provide an electronic filing option to taxpayers licensed under the International Fuel Tax Agreement (IFTA) pursuant to 15-70-121, MCA. The department shall provide IFTA Reporting Guidelines to a taxpayer upon licensing and shall notify a licensed taxpayer of any changes prior to implementation of these changes.

(1) A taxpayer licensed under 15-70-402, MCA, may pay electronically by either Automated Clearing House (ACH) credit or ACH debit, and may change methods with no restriction by the department. A taxpayer must provide the department reasonable time to initiate ACH debit by providing accurate banking information at least five days prior to the payment due date as prescribed in 15-70-113, MCA.

(2) A taxpayer licensed under 15-70-121, MCA, may pay electronically through the State of Montana contracted electronic payment process, by any method(s) offered by the contractor.

(3) An electronic funds transfer message must include the company name, account number, and tax period(s) being paid to ensure proper receipt and credit of the payment.

(1) An electronic payment is considered late and is subject to the penalties under 15-70-121 and 15-70-417, MCA, when it is not received by the state's designated depository by 11:59 p.m. on the day that it is due as required under 15-70-113, MCA.

(2) If an electronic payment is initiated by the department and it arrives late through no fault of the licensee, and there were sufficient funds to cover the licensee's motor fuel tax liability, no penalty or interest shall be assessed.

(3) A motor fuel tax return that is submitted electronically to the department is considered late if it is not received by 11:59 p.m. on the day it is due as required under 15-70-121 and 15-70-410, MCA.

(4) When an electronic payment is received late or when a payment that is initiated by the department does not have sufficient funds in the account, interest is charged from the first day after the payment due date.

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(1) The department may write-off any tax, penalty, or interest, when the department determines it is no longer cost effective to attempt further collection. The reason for the write-off must be documented in either the system notes or the hard file.

(2) The department's decision to write-off collection of accounts is based on the following:

(a) the department's inability to locate delinquent taxpayers to properly provide notification of assessments or the taxpayer's right to a hearing;

(b) the department's inability to reduce the assessment to a judgment lien by filing a warrant for distraint within a reasonable time;

(c) the anticipated cost of collection significantly exceeds the projected amount of recovery in accordance with existing department collection policies;

(d) the time period for collection provided by law has expired; or

(e) the taxpayer is deceased and the department is unable to locate either an estate or pending probate, or any property or other assets vested in the taxpayer's name.

(3) Unpaid tax obligations are not forgiven and are still payable after the department writes off the obligation and discontinues collection efforts. The department will not actively incur further expense to attempt collection on these obligations, but may resume active collection of an account if:

(a) the time period for collection of the assessment or a filed warrant for distraint has not expired; and

(b) the department receives information which significantly changes the original basis for write-off.

(4) The financial condition of a delinquent taxpayer is not considered for write-off of an obligation unless one or more of the elements set forth in (2) is present, or unless a properly completed closing agreement has been authorized.

(5) Upon the final decision of a United States bankruptcy court, barring further collection of a debt, the department shall write off the obligation and permanently discontinue collection of any tax, penalty, or interest.

(1) Streets, roads, highways, alleys, county roads, county gravel roads, forest service roads (except forest service development roads) and their related structures are accepted as public roads as defined in 15-70-401, MCA. A public road may be under new construction, reconstruction, relocation, or repair, even though it is not recognized as part of the maintained highway system.�

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(1) Gasoline and special fuel, as referred to in Title 15, chapter 70, MCA, must be taxed when consumed in the operation of a motor vehicle upon public roads or the rights-of-way of which are owned by the state, county, municipality, or other governmental agency regardless of who performs the maintenance thereon.

This rule has been repealed.

(1) If an MCS officer determines that the transporter, consignor, or consignee is not a licensed fuel distributor in the state of Montana, and the transporter, consignor, or consignee is listed on the warning list, the MCS officer shall issue a notice to appear to the transporter, consignor, or consignee for violation of 15-70-402, MCA, for improperly importing fuel. Upon conviction, the company's name must be placed on the seizure list.

(2) If an MCS officer determines that a load of fuel should be seized, the officer shall first obtain verification and approval from one of the department officials in the following order of precedence:

(a) Administrator, administration division;

(b) Administrator, motor carrier services division;

(c) Chief of the compliance bureau, Motor Carrier Services Division; or

(d) Area captain, Motor Carrier Services Division.

(3) Upon obtaining approval to seize a load of fuel, an MCS officer shall escort the load to the nearest location designated by the department official authorizing seizure.

(4) If the operator of the transport tanker carrying the seized fuel refuses to operate the vehicle and unload it at the location designated by the MCS officer, the officer shall:

(a) Notify the transport company of the seizure and give it 12 hours to provide another driver to operate the vehicle and unload the tanker at the location specified by the MCS officer; or

(b) Request that a towing company tow the entire tanker to the towing company's location to be impounded at the towing company's lot by the MCS officer.

(1) The department shall notify the transporter, consignor, and consignee in writing by certified mail within 48 hours of seizure that a load of fuel has been seized.

(2) Any transporter, consignor, and/or consignee with a claim to interest or title to the seized fuel must make a written request for a hearing within 30 calendar days after the date of seizure. Claims received after 30 days are automatically denied.

(1) Upon receipt of a timely filed claim or request for hearing, the department shall schedule a hearing at department headquarters in Helena, Montana, or to be held by telephone, within five working days of the receipt of the claim or request. All proper parties shall be notified of the hearing date in writing within two working days of the hearing date.

(2) The hearing is conducted by a hearing examiner designated by the department.

(3) The hearing must be conducted, a determination as to interest or title to the fuel made, and disposition of the seized fuel completed under 15-70-419, MCA.

(1) The price the department charges a contracted licensed distributor for seized fuel shall be no less than the wholesale price as determined by this rule.

(2) The wholesale price of seized fuel shall be determined by averaging the price of fuel from three major refineries in the state of Montana on the day the fuel was seized.

(3) If the load of seized fuel contains more than one type of fuel, an average price will be determined for each type of fuel seized and the total values of each type of fuel will be added together to determine the wholesale value of the load of fuel.

(1) The department's purchasing bureau shall contract for the purchase and disposition of seized fuel.

(2) The following requirements shall be included in any contract for the purchase and disposition of seized fuel:

(a) The distributor must be able to accept an entire load of fuel at a single location within 12 hours of notification by the department that a load of seized fuel is available.

(b) The distributor may bid on the award of contracts in any or all of the department's 5 districts. Seized fuel may be unloaded at a location within the district where the fuel was seized or at a location in an adjoining district, whichever is closer. The location must be able to accept the entire load of fuel.

(c) Any distributor awarded a contract for purchase and disposition of seized fuel shall accept into storage all grades of gasoline, clear diesel fuel, dyed diesel fuel, aviation fuel, and kerosene.

(1) When gasoline, special fuel, or aviation fuel is withdrawn from a refinery or pipeline terminal in this state, the gasoline, special fuel, or aviation fuel shall be deemed to be distributed by the distributor who is the owner of the gasoline, special fuel, or aviation fuel prior to the time of withdrawal, unless:

(a) the gasoline, special fuel, or aviation fuel is withdrawn for shipment or delivery to a licensed distributor, in which case it shall be deemed distributed by the shipping or delivering distributor; or

(b) the gasoline, special fuel, or aviation fuel is withdrawn for shipment or delivery to a person not licensed as a distributor for the account of a licensed distributor, in which case it shall be deemed distributed by the distributor for whose account the shipment or delivery is made.

(2) The gasoline, special fuel, or aviation fuel imported into this state (other than gasoline, special fuel, or aviation fuel placed in storage at refineries or pipeline terminals) shall be deemed to be distributed after it has arrived in and is brought to rest in this state by the person who is the owner of the gasoline, special fuel, or aviation fuel at the time the gasoline, special fuel, or aviation fuel is unloaded. However, if the owner is not licensed as a Montana distributor and if the gasoline, special fuel, or aviation fuel was shipped or delivered into this state by a person who is licensed as a distributor, then the gasoline, special fuel, or aviation fuel shall be deemed to be distributed by the licensed distributor.

(3) Deliveries of gasoline, special fuel, or aviation fuel to a distributor's own service station(s) or to any aviation dealer's storage tank(s) shall be treated as being sold and shall be deemed to be distributed.

(4) Withdrawals from a refinery, terminal or pipeline terminal, which are placed into bulk storage in this state, are deemed to be distributed at the time of delivery into the bulk storage tank.

(1) Gasoline, special fuel, or aviation fuel distributors must furnish the Department of Transportation a corporate surety bond executed by the distributor as principal with a corporate surety authorized to transact business in this state or other collateral security or indemnity. The total amount of bond or collateral security or indemnity must be equivalent to twice the distributor's estimated monthly gasoline, special fuel, or aviation fuel tax, in no case greater than $100,000.

(2) The department may require a distributor to post an additional bond not to exceed twice the distributor's estimated monthly gasoline, special fuel, or aviation fuel tax who has in the previous 12 month period:

(a) been delinquent for more than ten days for more than one reporting period;

(b) has given the state a nonsufficient fund check and whose nonsufficient fund check was returned in result of a bank error more than twice;

(c) whose filing was returned for inadequate postage more than twice; or

(d) the department's review indicates that the required distributor's records are inadequate.

(1) Every distributor must file a monthly distributor's license tax report, on a form furnished by the department within the time prescribed by 15-70-410, MCA. Supporting detail schedules on forms furnished by the department must accompany the distributor's license tax report, with all letters of explanation of credit deduction and the payment of the license tax due.

(2) Electronic filing, in the format required by the department, will be accepted.

(3) A licensed distributor who is subject to 15-70-410, MCA, must file electronically in a format prescribed by the department. Licensed distributors who report a combination of 99,999 gallons or less of gasoline and/or special fuel within a year may choose to file electronically or on paper forms prescribed by the department.

(4) Each distributor must report the amount of gasoline and special fuel distributed and received in gross gallons on the monthly tax return that is filed with the Department of Transportation.

(5) The distributor must use the bill of lading number generated by the originating terminal to report each load of fuel.

(1) Every distributor importing, manufacturing, refining, dealing in, transporting, or storing fuel in this state must maintain and keep records, receipts, invoices, including electronic format data, and other pertinent papers the department requires. Every distributor must provide for a period of three years the following:

(a) stock summary showing the monthly totals for the gallons of all gasoline, special fuel, or aviation fuel handled within this state with an analysis as to inventories, receipts, sales, use, transfers, and shipments; and

(b) receipt journals, refinery production journals, sales journals, and copies of all invoices, bills of ladings, or other documents of supporting information.

(2) Every refinery and terminal in the state must submit to the department monthly a copy of each bill of lading issued at the time of withdrawal, or the terminal operator report, upon request. The department may waive the hard copy in lieu of electronic filing format.

(1) Except as provided in (2), any distributor who sells and delivers gasoline, special fuel, or aviation fuel in this state must issue an original invoice at the time of delivery to the purchaser. Each invoice must contain the following:

(a) a preprinted consecutive number, except when invoices are automatically assigned a consecutive number by a computer or similar machine when issued;

(b) name and address of the distributor;

(c) name and address of purchaser;

(d) date of delivery;

(e) type of fuel;

(f) gallons invoiced--those common terms used or known to measure gasoline, special fuel, or aviation fuel such as temperature corrected at 60 degrees (net), and gross (cubical, volumetric, and shell);

(g) origin;

(h) destination;

(i) price per gallon and total amount charged;

(j) to establish that the tax has been charged, at least one of the following:

(i) the U.S. dollar amount of tax;

(ii) the rate of tax; or

(iii) a statement that the Montana tax is included in the price.

(2) For direct shipments accounted for on the monthly distributor's statement to the Department of Transportation, the original invoice may be issued to the purchaser at the time of billing. 

(1) As used in these rules, the term "wholesale distributor" and "wholesale distribution" includes any person who:

(a) purchases gasoline, special fuel, or aviation fuel and subsequently sells and delivers the gasoline, special fuel, or aviation fuel to retailers in bulk quantities in this state; and

(b) elects to become licensed under 15-70-401, MCA, to assume the Montana state gasoline, special fuel, or aviation fuel tax liability and the other obligations of a "distributor" pursuant to Title 15, chapter 70, part 4, MCA, and these rules.

(2) The terms "wholesale distributor" and "wholesale distribution" do not include any person who is a producer or importer.

(3) The term "wholesale distribution" does not include a parent corporation or company that sells gasoline, special fuel, or aviation fuel only to its wholly owned subsidiary service stations.

(1) A wholesale distributor must comply with all the laws, rules, and other obligations which are imposed on a "distributor" of gasoline, special fuel, or aviation fuel.

(1) Pursuant to 15-70-401, MCA, a person who blends ethanol with gasoline to produce ethanol-blended gasoline is a "distributor" if no tax has been paid on the ethanol or gasoline blended to produce ethanol-blended gasoline. As a distributor, the ethanol-blended gasoline blender is responsible for paying the tax on all the ethanol and gasoline which has not been taxed and which is used to produce ethanol-blended gasoline. If the person qualifies as a distributor solely on the basis of blending ethanol and gasoline, the person is a distributor only with respect to the ethanol and gasoline used to produce ethanol-blended gasoline.

(2) The blending of ethanol with gasoline to produce ethanol-blended gasoline does not make the ethanol-blended gasoline blender a distributor for the purpose of the payment of the tax due on gasoline not blended with ethanol to produce ethanol-blended gasoline. If the ethanol-blended gasoline blender receives gasoline upon which no tax has been paid and not used to produce ethanol-blended gasoline, the blender must qualify as and meet all the requirements to be either a distributor under 15-70-401, MCA, or a "wholesale distributor" under 15-70-401, MCA, and pay the tax.

(3) The ethanol-blended gasoline blender must comply with all the laws and rules which apply to distributors.

(1) For the purposes of Title 15, chapter 70, MCA, reference to gasoline includes ethanol-blended gasoline (regardless of where produced and how produced). Gasoline and ethanol-blended gasoline are taxed at the rate specified in 15-70-403, MCA.

(1) A product consisting of 100% anhydrous ethanol is not considered to be ethanol-blended gasoline.

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(1) The incidence of the distributor's license tax is on the distributor and not on the user. Fuel is not exempt from taxation because the ultimate user or consumer is an agency of the United States government, including the United States armed forces, Montana, or other states, counties, incorporated cities and towns, and school districts of this state, or any other entity, group, or individual.

(1) A credit claim for taxes paid on accounts for which the distributor received no compensation must accompany documents or copies of documents showing the accounts were worthless and claimed as bad debts on the distributor's federal income tax return. Any further information pertaining to claim must be furnished as required by the department.

(1) A licensed distributor may overpay its known motor fuel tax liability. The overpayment must be designated as such by the distributor. The credit balance created by the overpayment will apply to future tax deficiencies if the gasoline, special fuel, or aviation fuel is reported and tax is paid within 30 days of the due date.

(1) If the delivering distributor ships gasoline, special fuel, or aviation fuel to a Montana distributor at a point outside the state, the distributor may claim a credit by reason of export except as outlined in (3) below and must report the transaction the same as an export to any other customer.

(2) If a distributor ships gasoline, special fuel, or aviation fuel to a point outside the state following receipt from another distributor in this state, the distributor receiving the fuel in this state shall be deemed the exporter. The distributor making the delivery within this state may claim credit as outlined in ARM 18.15.301.

(3) If the delivery is placed into storage in this state and later distributed at a point outside this state, the distributor may not claim credit for the petroleum cleanup fee.

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(1) If a distributor ships gasoline, special fuel, or aviation fuel into Montana and delivers the fuel directly to another distributor before the fuel passes through the pipeline storage in this state, the delivering distributor must report the transaction as a receipt and may claim a credit the same as delivering distributors in ARM 18.15.301.

(2) If distribution between distributors takes place outside the state and the receiving distributor ships the gasoline, special fuel, or aviation fuel into Montana, the receiving distributor must report the import into pipeline storage or as a direct delivery to a customer.

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(1) Distributors may transfer casinghead or catalytic blending stocks to other licensed distributors without the payment of tax; provided these products will be used for blending purposes only and the blended product will be distributed as either gasoline or special fuel.

(1) Licensed distributors making sales of gasoline, special fuel, or aviation fuel, to the United States government or a state entity FOB rack for use by the purchaser out of the state of Montana must report the sale as a credit to the amount of gasoline, special fuel, or aviation fuel distributed on the distributor's monthly statement as an export required by 15-70-410, MCA.��

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(1) Any person, who sells and delivers gasoline or special fuel to a purchaser on which a refund may be claimed, must issue an invoice at the time of delivery. Only one invoice may be issued for each delivery. If all information is not provided on the invoice at the time of delivery, the applicant may provide a copy of the corresponding billing statement with the invoice that supports the missing information. Each invoice and accompanying billing statement collectively must contain or show the following:

(a) name and address of seller;

(b) name or account number of purchaser;

(c) complete date of delivery or purchase;

(d) type of fuel;

(e) number of gallons or liters purchased;

(f) price per gallon or liter, or total amount of sale;

(g) unit number of the vehicle; and/or

(h) identification of the equipment or bulk storage that the gasoline or special fuel is placed into if it is fueled by other than a cardlock. Examples include, but are not limited to, fuel cans, slip tanks, tractors or bobcats.

(2) Any person who requests a refund or credit of motor fuel tax must have evidence that the Montana motor fuel tax was included in the total fuel price paid.

(1) No altered or corrected invoice will be accepted for refund purposes when errors occur. The original invoice must not be altered or corrected but must be voided and a new original invoice issued. All altered or corrected invoices must be marked void and retained by the seller for a period of at least three years from date issued.

(1) The following percentages are allowed for the refund of gasoline or special fuel used in operating a PTO or auxiliary engines when the above records are maintained. The amounts are specified as a percentage of the total taxable fuel used by the vehicle. Work performed in accordance with 15-70-403(6) or (7), MCA, is not eligible for a refund. The percentages are:

(1) The department reserves the right to demand from a person claiming a refund under the provisions of 15-70-425, 15-70-426, 15-70-432, or 15-70-434, MCA, that positive proof be submitted of the exact amount of the loss and facts indicating the gasoline, special fuel, or aviation fuel was never used on the highway or in the air. In offering this proof, the following procedures apply:

(a) The claim for refund must accompany the invoice covering the purchase of gasoline, special fuel, or aviation fuel.

(b) A notarized statement citing the circumstances covering the loss and how the amount of gasoline, special fuel, or aviation fuel lost was determined.

(c) Substantiating records must be available to reveal and account for the amount of gasoline, special fuel, or aviation fuel lost.

(d) Affidavits from individuals witnessing or involved in the loss of gasoline, special fuel, or aviation fuel must be obtained and available to the department.

(2) The distributor may not claim a refund for the petroleum cleanup fee.

(1) In cases where gasoline, special fuel, or aviation fuel is placed into a storage tank or similar facility and the gasoline, special fuel, or aviation fuel is lost as a result of a leak in either the tank, the line, or the pump connected to the tank or facility, the Department of Transportation is under no obligation to refund the tax if a taxpayer fails:

(a) to immediately notify the department of the loss; or

(b) to comply strictly with the procedures provided in ARM 18.15.409; or

(c) to take the necessary precautions to repair the leak and to attempt to minimize the loss.

(2) The distributor may not claim a refund for the petroleum cleanup fee.

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(1) If any claim or any part of a claim is rejected, the department may, after investigation, require the claimant to file an amended statement or provide supporting documentation before action is taken under the following terms:

(a) Supporting documentation must be provided within 30 days after the request, or the refund request will be denied, and the claimant must re-submit the claim within the time allotted in 15-70-432 MCA; and

(b) If a refund has already been paid and no supporting documentation is submitted upon request, the department will send an invoice to the claimant for repayment.

(2) If the taxpayer submits an amended claim, the claim is reasonable, and the taxpayer has furnished substantial proof, the department in its discretion may accept the amended claim.

(3) A taxpayer may, on the taxpayer's own initiative, file an amended claim. If the claim is reasonable and the taxpayer has furnished substantial proof, the department, in its discretion, may accept the claim.

(1) The use of gasoline or special fuel by a person who earns income while engaged in the business of farming or ranching, which qualifies as agricultural use, may apply for a refund of the applicable tax on the gallons of gasoline or special fuel used in carrying on a trade or business of farming, ranching, or other agricultural purposes. An applicant may claim a fuel tax refund according to the ratio of the applicant's gross earned agricultural or farm income to the total gross earned income, excluding unearned income.

(2) An application for an agricultural use fuel tax refund shall include the applicant's appropriate state or federal tax return (based on type of entity) with supporting federal forms, schedules, and statements for one of the three previous tax years.

(3) To determine an applicant's eligibility for fuel tax refund under 15-70-430, MCA, the ratio between the gross earned agricultural or farm income to the total gross earned income must be determined as follows:

(a) Gross earned agricultural or farm income is determined using a combination of the following federal Internal Revenue Service (IRS) or state of Montana tax information, including but not limited to:

(i) Schedule F – gross income less custom hire;

(ii) Form 4835 – gross farm rental income and active participation;

(iii) Form 1065(partnerships) – any third-party payments, gross receipts or sales and other income with corresponding statements showing agriculture;

(iv) Form 1120 (corporations) – total of third-party payments and gross receipts or sales and other income with corresponding statements;

(v) Form 1120s (corporations) – total of third-party payments and gross receipts or sales and other income with corresponding statements;

(vi) Federal farm schedule – gross income less custom hire and miscellaneous income;

(vii) 1099-MISC – crop insurance proceeds; or

(viii) Form 4797 – gross sales of agricultural products.

(b) Gross earned income is determined by using the applicant's gross earned agricultural or farm income plus a combination of the following federal IRS or state of Montana tax information, including but not limited to:

(i) Form 1040 –wages, salaries, tips;

(ii) MT Form 2 – wages, salaries, tips;

(iii) Schedule C – total gross receipts;

(iv) 1099-MISC – other income, fishing boat proceeds and nonemployee compensation;

(v) K-1 (1120S) – ordinary business income;

(vi) K-1 (Form 1065) – taxable income from passive activities and taxable income from other activities;

(vii) Schedule F – custom hire;

(viii) Federal farm schedule – custom hire; or

(ix) Form 1065 (partnerships) – any third-party payments, gross receipts or sales and other income not agriculture.

(4) All federal tax forms are available on the IRS web site at www.irs.gov. All state of Montana tax forms are available on the Montana Department of Revenue web site at www.revenue.mt.gov.

(1) A special fuel seller is responsible for payment of the tax on dyed special fuel dispensed through a cardtrol, keylock, or similar device from an unattended pump or dispensing unit if the seller knows the fuel is sold to a customer who places the fuel directly into the supply tank of a vehicle not defined as or considered an off-road vehicle as defined in these administrative rules.

(1) Any seller who sells gasoline or special fuel to a purchaser through a keylock or cardtrol on which a refund may be claimed in accordance with 15-70-430, MCA, shall provide the purchaser with a statement of fuel purchased. The statement may be prepared as frequently as deemed necessary, but one statement must be issued at least every 30 days.

(2) Electronic transaction reports shall be provided to the purchaser with a statement of fuel purchased on which a refund may be claimed in accordance with 15-70-430, MCA.  The statement may be prepared as frequently as deemed necessary, but one statement must be issued at least every 30 days.

(1) When a diesel powered vehicle is found to have dyed fuel in the supply tank(s) and has been traveling on public roads, the department will assess the special fuels tax on each of the diesel powered vehicle's supply tank(s) as if the tank(s) were full.

(2) When assessing the special fuel tax on a diesel powered vehicle, the following average supply tank capacities will be used:

(a) 17 gallons for an automobile;

(b) 27 gallons for a pick-up truck;

(c) 63 gallons for a truck;

(d) 100 gallons for a combination.

(3) All assessments of the special fuel tax on diesel vehicles will be rounded for the convenience of the taxpayer and the department.

(4) The operator or owner of the vehicle may request a hearing if they disagree with the assessed amount.

(1) For the purpose of this rule, an "off-highway or off-road vehicle" is defined as a vehicle not designed to transport persons or property upon the public roads and highways of this state, including special mobile (SM) plated vehicles and vehicles with physical characteristics intended for primary use in an off-road manner which may or may not be licensed as special equipment. These vehicles may occasionally move on the public road for purposes such as movement between job sites or repair.

(2) There will be no restriction for miles traveled on the highway from location to location, so long as such travel is occasional and for those purposes listed above.

(3) SM-plated vehicles/equipment that have undyed diesel in the supply tank and move on the public roads do not qualify for a refund for the portion used on public roads.

(4) In order to obtain a refund for off-road or off-highway equipment fueling at a service station, the station must identify on the invoice, receipt or statement the off-road or off-highway piece of equipment being fueled.

(1) The department will allow the state of Montana, cities, counties, school districts, and federal and tribal governments to use dyed, low sulphur special fuel on the public roads if the following criteria are met:

(a) The vehicles are owned by a governmental entity (state of Montana, city, county, school district, federal or tribal government); or

(b) The vehicles are leased by the governmental entities (state of Montana, city, county, school district, federal or tribal government) and the lease terms meet the criteria for a "long term lease."

(1) The department has adopted the following provisions relating to dye color and concentration requirements for tax-exempt diesel fuel, excluding buses and governmental vehicles.

(a) In Montana red dye will be used to identify all tax-exempt special fuel, regardless of the sulfur content of that fuel. Colored special fuel from Canada will be considered tax exempt if the dye concentration has been approved by the Canadian authorities, but it may not be used on public roads.

(b) The special fuel will satisfy the federal dyeing requirement if it contains the dye solvent red 164 at a concentration spectrally equivalent to 3.9 pounds per thousand barrels of the solid dye standard solvent red 26 or contains any dye of a type and in a concentration that has been approved by the commissioner of internal revenue service. The presence of dye at a concentration of 2.0 milligrams per liter (mg/l), or greater is considered to be in violation of 15-70-441, MCA.

(2) Dyed special fuel can be purchased tax free in Montana and Canada, but it is illegal to use it on the public roads, regardless of where it was purchased, except for the movement of off-road vehicles traveling from one location to another as indicated in these administrative rules and any vehicles described in these administrative rules.

(3) The department will allow a grace period of ten days from the date of a dyed fuel inspection that resulted in a violation to remove the presence of dye from a vehicle before a subsequent violation may be issued. After the grace period, the operator of the vehicle may be cited for violation of 15-70-441, MCA.

(4) Use of high sulphur dyed special fuel on public roads is prohibited by the federal environmental protection agency (EPA), as set forth in 40 CFR 80.29.

(5) Contractors may not store or use non-taxed diesel in equipment, motor vehicles, and stationary engines used upon public roads or within any public road project limits as defined in 15-70-403, MCA, unless the fuel has been declared to the department. Contractors in violation of this section are subject to penalties upon conviction as defined in 15-70-443, MCA, and may be suspended for up to six months from participating in future department contracts.

(6) The dye must be injected by means of a mechanical injection process to diesel fuel at the terminal rack. All dyed special fuel sold in, imported to, or exported from the state of Montana shall have dye added in accordance with federal requirements of type and quantity and will be injected by mechanical injection systems or by a system approved by the department.

(7) Exceptions:

(a) If a mechanical injection system is inoperative, the terminal may "splash dye" special fuel for tax free sales. Terminals must notify the department on the first working day after the injection system becomes inoperative. The terminal shall note on each invoice and bill of lading that the fuel is splash dyed and file a separate fuel tax report for splash dyed fuel. The terminal shall keep records of the date and time the dye injection system became inoperative and when the injection system was made operational. All records shall be kept and be available for inspection upon request of the department or representative.

(b) If a mechanical injection system should inject an insufficient amount of dye to meet state and federal standards, the terminal may splash dye keeping the same records as in (a).

(c) The terminal operator or his designated representative may splash dye under the above conditions. Each terminal shall keep a record of persons conducting splash dying. Transport drivers shall not be listed as persons conducting splash dying.

(d) Special fuels splash dyed and not meeting all of the above standards shall be considered by the state as undyed fuel and the terminal responsible for splash dying the fuel shall be liable for all tax, penalty and interest on the fuel.  

(1) The department adopts and implements the International Fuel Tax Agreement (IFTA) as set forth in 15-70-121, MCA.

(1) Every special fuel user licensed under the International Fuel Tax Agreement (IFTA) pursuant to 15-70-121, MCA, must file with the department, on forms prescribed by the department, a report showing the amount of fuel used during the calendar quarter. Calendar quarters end on the last day of March, June, September, and December. The reports and applicable tax payments are due on or before the last day of the month following the close of a calendar quarter.

(2) Every special fuel user licensed under IFTA, must submit the quarterly tax report regardless of the fuel usage. Failure to file the quarterly tax report or to pay the applicable tax due in the time prescribed in (1) is sufficient cause for revocation of the IFTA license. The department shall revoke the IFTA license if the required tax report or tax payment is not submitted to the department within 60 calendar days of the due date.

(3) The department may revoke or deny the renewal of an IFTA license for a period of one year when it determines the licensee has failed to file a tax return or pay the tax due according to the due dates established in (1), more than three times within a three year period. A late filing and payment for the same quarterly filing period constitutes one non-compliance event.

(4) An IFTA license revoked in error will be reinstated.

(1) The department may require IFTA licensees, or others as determined by the department, who fail to timely file a fuel tax return(s) or timely pay fuel tax liability to post a bond equivalent to twice the licensee's estimated quarterly tax liability, but not less than $500. The bond may be a surety, a certificate of deposit, or cash.

(2) The department may require a licensee to post a bond for non-compliance events including:

(a) three late quarterly filings in a three-year period; or

(b) non-payment or late payment of the tax liability of an IFTA quarterly tax return two or more times in a four-quarter period.

(3) A new bond may be required for each non-compliance infraction.

(4) The bond requirement will be removed and the bond released after three years if the licensee has timely complied with all applicable statutes and rules for those three years.

(5) The department, in its sole discretion, may waive the bond requirement if the late filing or the nonpayment was not in the control of the licensee.

(6) Failure to post a required bond within 30 days of issuance of an IFTA bond requirement notice may result in revocation of the IFTA license.

This rule has been repealed.

(1) Upon ceasing operations in Montana, each special fuel user licensed under IFTA, shall:

(a) Submit a final return with the original license;

(b) Pay all tax, penalty, and interest due;

(c) Request cancellation of the IFTA license.

(2) Any attempt to use a canceled license is considered a violation of 15-70-121, MCA, and subjects the violator to the penalty provisions of 15-70-458, MCA.

(3) When the user's IFTA license is revoked for noncompliance, the license must be surrendered and returned with reports through the date of the revocation. Any attempt to use a revoked license is considered a violation of 15-70-121, MCA, and subject to the penalty provisions of 15-70-458, MCA.

(4) An invalid IFTA license list is maintained by the department and is distributed to all motor carrier services officers in Montana. An IFTA license on the invalid list or a reproduction of such a license is subject to confiscation by enforcement officers, and a citation may be issued.

(1) A reproduced copy of an IFTA license that is not clear and legible is invalid and is subject to confiscation by motor carrier services division personnel, and authorized employees of the department. The person from whom the license is confiscated may operate the vehicle by obtaining a clear and legible copy of the license or by purchasing a temporary trip permit pursuant to 15-70-455, MCA.

(2) Confiscation of a reproduced copy of a Montana IFTA license under this rule does not affect the validity of the original license issued by the department.

(1) In the event a special fuel user fails to retain the required records for fuel used in internal combustion engines to produce materials used on taxable projects, the department shall use the industry standard or other available information for special fuel usage by the internal combustion engines to calculate the formula for which reports are being made. In the event no industry standards are available, the following ampg standards will be used:

(a) trucks and truck tractors whose manufacturers gross vehicle weight rating is 9,000 lbs. or more, 4.0 ampg;

(b) pickups and trucks whose manufacturers gross vehicle weight rating is 6,000 lbs. or less than 9,000 lbs., 10 ampg; and

(c) automobiles and pickups whose manufacturers gross vehicle weight rating is less than 6,000 lbs., 15 ampg.

(2) The formula to compute fuel used to produce materials for taxable projects:

(a) Asphalt is composed of 94% aggregate (1 cu yd = 1.88 tons).

(b) Concrete is composed of 75% aggregate (1 cu yd = 2 tons) .28 gallons per ton is based on industry average (.13 gallons per ton may be used if electrical power is purchased from a commercial source).

(c) Example:

Concrete: 100 cu yd of concrete = 200 tons

200 tons X .75 = 150 tons of aggregate

150 tons X .28 = 42 gallons (diesel generator)

150 tons X .13 = 19.5 gallons (electrical power)

Asphalt: 100 cu yd of asphalt = 188 tons

188 tons X .94 = 176.72 tons of aggregate

176.72 tons X .28 = 49.5 gallons

(1) It is the responsibility of the ethanol distributor, including anyone who imports ethanol, to collect and remit to the department the tax that is due on the ethanol pursuant to 15-70-403, MCA.

(1) The ethanol distributor shall make one application, on forms available from the administration division, for the payment of the tax incentive to the division not later than the 25th day of the calendar month following the month or months during which the ethanol was sold and delivered to the ethanol-blended gasoline dealer or ethanol purchaser. The ethanol distributor may not submit more than one application during a month. If ethanol is omitted from one month's application, it may be applied for in the application for a subsequent month.

(2) The application must be accompanied by the original or a copy of the production records and invoices for all the ethanol for which the ethanol distributor is applying for the tax incentive payment.

(3) The application must contain:

(a) the name of the ethanol distributor;

(b) the license number of the ethanol distributor;

(c) the total number of gallons of ethanol manufactured, exported, or imported by the distributor during the preceding calendar month;

(d) the name of each ethanol-blended gasoline dealer to whom the ethanol was sold;

(e) the gasoline distributor license number of the ethanol-blended gasoline dealer;

(f) the number of gallons of ethanol sold to each dealer or purchaser; and

(g) the date and the place the ethanol was blended with gasoline to produce ethanol-blended gasoline.

(4) If the application includes ethanol which was exported from Montana prior to being blended with gasoline to produce ethanol-blended gasoline, the application must be accompanied by a certificate of blending from the ethanol purchaser on a form which is furnished by the division. The certificate must be completed and signed by the out-of-state ethanol purchaser and must include:

(a) the license number or numbers, if any, of the purchaser in the state or states where the ethanol-blended gasoline was distributed;

(b) the address and telephone number of the ethanol purchaser;

(c) the number of gallons of ethanol-blended gasoline which were produced by the purchaser from the ethanol which was produced in Montana;

(d) the statement that the ethanol was blended with gasoline at a ratio of at least one gallon of ethanol to nine gallons of gasoline; and

(e) the name, license number, and address of the person who actually blended the ethanol with gasoline and the number of gallons of ethanol-blended gasoline which was produced if he is not the ethanol purchaser.

(5) The application must be sent to:

Administration Division

Department of Transportation

2701 Prospect

P.O. Box 201001

Helena, MT 59620-1001

(6) If the information on the ethanol tax incentive payment application by the ethanol distributor does not match the information on the gasoline distributor's report or other information supplied to the division, the division will withhold payment of the ethanol tax incentive until such time as the division can determine the accuracy of the ethanol tax incentive application.

(7) The report may include an application for refund of the basic gasoline license tax on gasoline which was used to denature ethanol. The application for refund shall include:

(a) the gallons of ethanol which were denatured by the ethanol distributors;

(b) gallons of gasoline used in denaturing; and

(c) the total amount of refund of gasoline tax per gallon pursuant to 15-70-521, MCA.

(8) Original bills of lading, or invoices, or copies shall be attached to each report which contains an application for refund of the basic gasoline license tax on gasoline which was used to denature ethanol.

(1) The division shall offset against any ethanol tax incentive payments which are due under the act:

(a) any overpayment or unauthorized payment made on prior ethanol tax incentive applications; and

(b) any finally assessed tax due from the ethanol distributor under Title 15, MCA.

(1) The department may require quarterly reports from the applicant to ensure ethanol implementation is on schedule.

(1) The department may cancel or deny a license if it is discovered that the applicant has provided inaccurate information to the department.

(1) The payment of the ethanol tax incentive will be based solely on the percentage of Montana products, including Montana wood or wood products, that are used in the production of anhydrous ethanol.

(1) A person may not act as a compressed natural gas (CNG) or liquefied petroleum gas (LPG) dealer in this state unless the person is a holder of a valid fuel dealer's license issued by the Department of Transportation.

(2) Every dealer must apply for and obtain a CNG or LPG dealer license prior to distributing CNG or LPG directly into the supply tank of a motor vehicle for highway use in this state. Application for the CNG or LPG dealer's license must be made on forms provided by the department and must contain information the department deems necessary. Upon receipt and approval of the application, the license will be issued and must be conspicuously displayed at the dealer's principal place of business at, which the fuel is to be distributed in this state.

(3) Every CNG or LPG dealer who distributes fuel at more than one location needs only obtain one license for all locations. The license must be obtained prior to distributing fuel at any location. The original license or copy of the original must be conspicuously displayed at each location which distributes CNG or LPG fuel.

(4) Upon cancellation or revocation of the license or discontinuance of distributing CNG or LPG, the dealer must return the license to the department. The name and address of the person or firm retaining records for audit purposes and the disposition of all fuel inventories must be provided when the license is returned.

(1) Every dealer must submit the quarterly tax return regardless of whether he has distributed fuel during the immediately preceding calendar quarter. Failure to file the tax return will be considered sufficient cause for revocation of the dealer's license, and the license may be revoked as of that date.

(2) A request for an extension allowed under 15-70-714, MCA, must be received by the department prior to the original due date of the tax return.

(3) The Department of Transportation may accept CNG and LPG dealer tax returns without requiring a listing of all individual sales made by those dealers.

(1) Every dealer shall maintain all records necessary to support their CNG or LPG tax returns. The records must account for all changes to CNG or LPG and must include:

(a) A record of fuel receipts together with invoices, bills of lading, and other documents relative to the acquisition of fuel; and

(b) A record of fuel disbursements together with the invoices, as well as bills of lading and other documents relative to the disbursements of fuel.

(1) An invoice must be issued at the time of each fuel disbursement into the supply tank of a motor vehicle. Each invoice must include the date of sale and total number of gallons sold.

(1) CNG or LPG dealers will be required to furnish the Department of Transportation a corporate surety bond or other collateral security or indemnity equivalent to twice the dealer's estimated quarterly CNG or LPG tax if the dealer fails to file timely reports. Failure to timely file as used in 15-70-704, MCA, means:

(a) A dealer has failed to file for more than one reporting period;

(b) A dealer has given the state a non-sufficient fund check or whose non-sufficient fund check was returned as a result of a bank error more than twice; or

(c) A report was returned for inadequate postage more than twice.

(2) In those instances where reports, which have been either solicited or audited, are determined to be inadequate by the department, the reports will be deemed to have not been timely filed.�

The following definitions apply in this chapter:

(1)  "Charging station operator" means a person, firm, general partnership, limited partnership, limited liability partnership, corporation, limited liability company, or other lawfully recognized business entity that operates a public charging station, regardless of ownership.

(2) "Charging station owner" means the entity that is the public utility customer, or a public utility that owns a public charging station or public legacy charging station.

(3)  "Electric meter" for purposes of [Ch. 619, L. 2023, Section 3] means an electric meter or sub meter installed or approved by the public utility exclusively dedicated to the public charging station or public legacy charging station for the public utility's billing purposes for billing of electricity and or the kWh tax.

(4) "Metered system," "metering system," and "metering device" mean the charging station's internal embedded meter.

(5) "Rated capacity" means the charging station manufacturer's rated capacity.

(1) For purposes of administering this chapter, the public utility will assess, collect, and remit the tax due to the department as measured by the kilowatt hours delivered through the electric meter.

(1) For purposes of administering this chapter, the department will treat an electric meter serving a bank of charging stations as exclusively dedicated to the public charging station or public legacy charging station without regard for additional appurtenances that are served by the electric meter.

(1)  Pursuant to [Ch. 619, L. 2023, Section 5], the public utility must file a quarterly tax report on forms prescribed by the department, showing the amount of kilowatt hours used during the calendar quarter and the calculation of tax owed on the amount of kilowatt hours used during the calendar quarter less an uncollectable tax resulting from the previous calendar quarter.  

(2) Calendar quarters end on the last day of March, June, September, and December, and the quarterly tax reports and applicable tax payments are due on or before the last day of the month following the close of the calendar quarter. 

(3) Once an initial tax report is submitted, quarterly tax reports must continue to be submitted regardless of kilowatt hour usage, until a closing report has been filed with the department.