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Prepaid Sales Tax Now Includes Diesel Fuel

The following article is taken from the March 20, 2013 edition of MPA/MACS Facts newsletter.

PREPAID SALES TAX NOW INCLUDES DIESEL FUEL AND WILL CHANGE EVERY MONTH STARTING APRIL 1, 2013

NEW RATES GAS SALES TAX RATE IS 20.4 ¢ – DIESEL SALES TAX RATE 22.7 ¢

The Michigan Department of Treasury has announced that the Prepaid Gasoline Sales Tax Rate will change to 20.4 cents per gallon and (NEW) Prepaid Diesel Sales Tax Rate will be 22.7 cents per gallon.  These new rates will take effect on April 1, 2013.  The prepayment rates for gasoline and diesel fuel effective April 1, 2013 were determined by the Department of Treasury based on statewide average retail prices for the period February 1, 2013 and ending February 28, 2013.

Recent legislation passed nearly unanimously in both the Michigan State House and Michigan Senate extends the prepaid sales tax to diesel fuel and requires the Department of Treasury to increase the frequency of the amount the prepaid sales tax rate to every month in order to more accurately reflect market conditions.  The new prepaid rate must be published by the tenth day of the month immediately preceding the month in which the rate is effective.  The prepaid sales tax rate will only apply to clear diesel fuel (excludes dyed diesel fuel and kerosene).  The new law also allows for a prepayment credit claimed for diesel fuel for the first month due in April.  That repayment credit shall be paid by October 15, 2013.  More details to come from the Department of Treasury on the repayment credit process.

All of these changes were a collaboration of work between the Department of Treasury and various industry groups.  This legislation had the full support of not only MPA/MACS but also the Associated Food and Petroleum Dealers (AFPD), American Petroleum Institute of Michigan (APIM), BP and Marathon.  This issue has been a priority of the MPA/MACS Board of Directors for several years.  MPA/MACS believes the current system is antiquated and this new law will help protect the interests of the membership as a whole.

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