97-014
Response March 12, 1997
February
19, 1997
Dear
Ms. Rees:
Further
to a discussion with NAME, Assistant Director, Customer Service, this is to
request an advisory opinion for the following:
Rule 865-4D-2(D)(5) states, “Special fuel used on-highway
for the purpose of idling a vehicle is not exempt from the special fuel tax
since the fuel is used in the operation of a motor vehicle” (emphasis added).
Please
advise whether all fuel used in idling is non-exempt or whether fuel used in
idling off- highway is eligible for a refund.
Would
you also please advise the state’s definition of “highway.”
If
you have any questions or comments regarding this communication, please contact
me or NAME at #####.
Yours
sincerely,
NAME
Vice
President Operations
NAME
ADDRESS
CITY
STATE ZIP
Advisory
Opinion - Special fuel tax
Dear
NAME,
We have received your request for
tax guidance pertaining to the application of special fuel tax to special fuel
used for “idling.” We find as follows:
Under Utah law, special fuel tax is
imposed on special fuel that is sold or used to operate or propel a
motor vehicle upon the public highways of this state. Utah Code Ann. §59-13-301 (1) (emphasis added). Special fuel used on-highway for the purpose
of idling a vehicle is taxable because
it is used in the operation of a motor vehicle. Utah Admin. R. R865-4D-2 (5).
The Tax Commission does not differentiate between “propulsion” and
“idling.” In 1994, the Utah Court of
Appeals affirmed that there is no distinction between “propulsion” and “idling”
because both concepts fall within the meaning of operating a vehicle on
the public highways. See US Express,
Inc. v. Tax Comm’n, 886 P.2d 1115 (Ct. App. 1994). Therefore, fuel that is
used for such purposes as idling to run heating, air conditioning, or
refrigeration units is taxable within the meaning of section 59-13-301 of the
Utah Code.
Special fuel used in motor vehicles
for off-highway purposes is exempt from the special fuel tax. Utah Admin. Rule R865-4D-2 (D). You correctly identified the term “highway”
as critical to the distinction between taxable and nontaxable uses. “Highway” is defined in Utah Code section
59-13-102 (4) as “every way or place, of whatever nature” that is generally
open for public vehicle traffic, even if the roadway is temporarily closed for
construction, maintenance or repair. We
find that a road is a public highway within the meaning of this statute if:
1. the
road constitutes a Class A, B, or C road;
2. the
road is a Class D road and constructed, repaired or maintained with the use of
government funds; or
3. the
public in general has a legally enforceable right of access to use the road.
If your vehicles are used for both
on-highway and off-highway purposes, off-highway use is generally calculated by
dividing off-highway miles by average miles per gallon. If you feel this method does not accurately
account for the amount of time a vehicle is idling while standing at an
off-highway site, you may use another method of calculation so long as the
calculation is supported by on-board computers or other records. If you have specific questions about
alternative methods of calculating off-highway use or questions about whether a
particular use qualifies as “off-highway,” we urge you to call NAME of our
Auditing Division at (801) ##### for assistance.
Note that special fuel that is
exempt from the special fuels tax is subject to sales tax unless some other
exemption (such as the agricultural exemption) applies.
A copy of Utah Administrative Rule
R865-4D-2(D)(2) is enclosed for your information. Please let us know if you have other questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner