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Motor Fuels Tax

The oil company franchise tax is imposed on all taxable liquid fuels an fuels on a cents-per-gallon equivalent basis, and it is remitted by distributors of liquid fuels and fuels.

Exempt from the tax are fuels sold and delivered to the U.S. government; the commonwealth and any of its political subdivisions; volunteer fire companies; volunteer ambulance services and volunteer rescue squads; second class county port authorities; and nonpublic, nonprofit schools (K-12). In addition to these exemptions, reimbursements are made for certain agricultural purposes and for fuel consumed in truck-mounted refrigerator units.

For 2017, the tax rates are calculated using 194.5 mills for liquid fuels and 249.5 mills for fuels.

Aviation gasoline and jet fuel are also taxed. However, separate tax rates are set for these fuels.

Payments and reports are due from distributors on or before the 20th day of the month for liquid fuels and fuels sales in the preceding month.