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Revenue Administrative Bulletin 1993-13

Approved: October 27, 1993



RAB-93-13. This bulletin explains the Department's position concerning proper disclosure of revoked diesel fuel retailers' licenses to diesel fuel supply sources. Pursuant to MCL 205.28(1)(f); MSA 7.657(28), the Department, in the proper administration of its tax laws, may provide a taxpayer's identity to a diesel fuel supply source.

The Motor Fuel Tax Act provides for a 15 cents per gallon tax rate [MCL 207.102; MSA 7.292], with special provisions for a 6 cents per gallon discounted rate on certain sales for resale, sales to licensed commercial motor vehicles, and sales to motor carrier bulk storage facilities. [MCL 207.122(1); MSA 7.316(1)]

The tax on diesel motor fuel sold by retail diesel dealers is collected by the fuel supply source and paid to the Department as required by MCL 207.122(2); MSA 7.316(2). The fuel supply source collects the discounted rate of 9 cents per gallon of the "road privilege tax" on each gallon purchased by a licensed retail diesel dealer. The retail diesel dealer collects an additional 6 cents tax per gallon on sales where the full tax rate applies. This tax is then remitted to the Department. [MCL 207.122(2); MSA 7.316(1)]

Generally, a fuel supply source decides if a retail diesel dealer is entitled to purchase fuel taxed at the discounted rate of 9 cents per gallon by determining if the dealer has a valid license. However, because the license is issued annually, a retail diesel dealer may attempt to use a revoked license to obtain the discounted rate for the remainder of the year. As a result, the fuel supply source may inadvertently allow the discounted tax rate of 9 cents per gallon to a retail diesel dealer whose license is revoked.

A retail dealer whose license has been revoked is subject to the full tax rate of 15 cents per gallon. The Department may disclose to fuel supply sources those individuals who no longer hold valid retail diesel dealers' licenses. Fuel supply sources will then charge the full tax rate to retail diesel dealers whose licenses have been revoked and collect the proper amount of tax.