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Revenue Administrative Bulletin 1989-67


Approved: October 6, 1989


RAB-89-67.     In 1989, Public Act 152 amended the Michigan Underground Storage Tank Financial Assurance Act, Public Act 518 of 1988 [MCL 299.801 et seq.] and established an environmental protection regulatory fee to fund the federally mandated cleanup of leaking underground storage tanks. This fee applies to petroleum products refined or imported into the State of Michigan.

Beginning on August 1, 1989, the refiners of petroleum and importers of refined petroleum must pay the regulatory fee of 7/8 of 1 cent on each gallon of refined petroleum sold in Michigan. [MCL 299.808(1)] The Sales, Use, and Withholding Taxes Division collects this fee on the same form as the gasoline sales tax prepayment paid by refiners, terminal operators and importers (Form C-3237 REPORT OF ENVIROMENTAL PROTECTION REGULATORY FEE AND GASOLINE SALES TAX PREPAYMENT). Returns are due twice monthly and must be filed even if no payment is due.

Petroleum Products Subject to Regulatory Fee

The regulatory fee is imposed on the sale of refined petroleum by the refiner or importer. A transfer or exchange of refined petroleum by a refiner or an importer is considered to be a sale and is subject to the fee (unless the purchaser will further refine or export the product). The Act defines refined petroleum as aviation gasoline, middle distillates, jet fuel, kerosene, gasoline, and residual oils. [MCL 299.805(4)]

For the purpose of this Act, the term “middle distillates” means any product used as a heating fuel, internal combustion engine fuel, or turbine engine fuel. The term “residual oils” means #4, #5, and #6 fuels.

Products commonly referred to as middle distillates, but not used in the above manner, are not subject to the fee.

Example:    Raffinate used as a fuel is subject to the fee; however, when it is sold or used as feed stock, it is not subject to the fee.

Importers of Petroleum

For the purpose of administering this fee, the Department considers an importer to be the person having legal ownership of the refined petroleum at the time it is brought into Michigan.

Example:   A company refines petroleum in another states and sells it to a purchaser in Michigan. The refiner is considered to be the importer when title to the refined petroleum passes to the Michigan purchaser in Michigan. This will occur in the following situations.

  1. The refined petroleum is brought into Michigan in the refiner’s truck.
  2. The refiner hires a contract carrier to haul the refined petroleum into Michigan.
  3. A common carrier transports the refined petroleum and title passes in Michigan rather than another state.

The Michigan purchaser is considered to be the importer of refined petroleum when the title passes to the Michigan purchaser in another state. This will occur in the following situations:

  1. The refined petroleum is transported to Michigan in the purchaser’s trucks.
  2. A common carrier transports the refined petroleum to Michigan and title passes in another state.


Sales for Immediate Export.

Sales for resale of refined petroleum for immediate export are no subject to the fee.

When the customer is claiming exemption from the fee because the product is for export, the purchaser must provide an exemption claim to the seller identifying the specific load by invoice number or load number. A statement that the load being purchased is for immediate export to a specific destination, and that petroleum will not be returned to Michigan must be included. This exemption claim must be made for each load being exported. However an exemption claim made by a purchaser to a seller with a card system verifying that all purchases made with a specific card are to be exported may be considered valid.

Sales made to an out-of-state purchaser and delivered by the seller to the out-of-state location, are sales in interstate commerce and are no subject to the fee.

Public Utility.

A public utility with more than 500,00 Michigan customers is exempt from this fee if the petroleum is used by the public utility for the generation of steam or electricity. To claim this exemption, a public utility must present an exemption certificate to the seller at the time of the purchase. [MCL 299.808(3)]