Fuel Tax vs. Sales Tax

Fuel tax is assessed on fuel used for motor vehicle operation on Utah public highways or waterways and on fuel used in aircraft.

Some fuel types, entities using fuel, or uses of fuel are exempt from fuel taxes. However, sales and use tax then applies unless the product, entity, or use is also exempt from sales and use tax.

Exempt fuel types include:

• Fuel derived from Utah solid hydrocarbons (see administrative rule R865-13G-9)
• Electricity
• Propane

Exempt entities include:

• Federal and state government agencies and their subdivisions
• Certain Native American groups

Exempt uses of fuel include:

• Fuel exported from Utah
• Some cases where fuel is lost through destruction or re-refining.
• Commercial agricultural production (see administrative rule R865-13G-8)
• Special fuels used in machinery and equipment not registered (and not required to register) for highway use
• Special fuels used to operate a motor vehicle off highway
• Special fuels used to operate a power take-off unit on a vehicle