Distributor: Any broker or person who acts as a supplier, manufacturer, and distributor of fuel must be licensed as a distributor. Any vendor of liquefied petroleum fuel or natural gas, other operator or contractor who uses Liquefied Petroleum Gas (LPG) or Compressed Natural Gas (CNG) from a public utility, or a public utility that sells fuel through an alternative fuel vehicle charging or fueling facility must also be licensed as a distributor.
Importer: Any person who imports fuel into this state must be licensed as an importer.
Exporter: Any person who acquires fuel in this state and delivers it to another state must be licensed as an exporter. Furthermore, to obtain an exporter license, one must present a copy of their fuel distributor license(s) for the destination jurisdiction(s).
Blender: Any person who blends fuel outside of the fuel distribution system, such as in refineries, must be licensed as a blender.
Common Carrier: Any carrier who transports fuel that they do not own must be licensed as a common carrier.
Terminal Operator: A storage facility or a tank farm where fuel is stored and then removed for distribution must be licensed as a terminal operator. A fuel license is location-specific for your operations. Each fuel license must be posted at the location of the business to which it applies.
Penalties for Operating Without a License
Any entity operating without a license is subject to civil penalties in the amount of a $5,000 fine for the first offense; $10,000 for the second offense; and $15,000 for the third or subsequent violation.
How to Apply for a Fuel License
To obtain a fuel tax license the following items need to be completed and submitted to the Fuel Tax Unit.
- Complete a Distributor/Contract Carrier Application Booklet (DR 7064). All information requested on the application must be provided. There is a license fee per application and an additional fee for each location.
- The Surety Bond Application Form (DR 7065) must be included with application for license.
- Complete the Distributor Trading Partner Agreement to file electronically through the Colorado Fuel Tracking System (COFTS).
- Sign up for Electronic Funds Transfer (EFT). Payment by EFT is required for fuel taxes.
Review, processing, and issuance of your license can take up to four to six weeks, so you should plan accordingly to have a license when you start your business.
Change in Business Operations
Current licensed distributors who want to perform any activity other than what they are currently licensed for must submit an amended application to obtain a license for the other activities. For example, if one is currently licensed as a distributor and intends to import fuel into Colorado, an application requesting an importer license will be required before such a distributor imports fuel into Colorado.
Changes in Ownership
The Colorado fuel distributor license is perpetual until notification from the taxpayer is received by the Department of Revenue. In order for the Department to close a fuel distributor license, the following steps must be taken:
Written correspondence, including the Colorado account number, name, and authorized signature, requesting the fuel distributor account be canceled, must be submitted by the taxpayer. This must be received by the end of the month in which the fuel distributors wish to cancel their license.
In addition to the above written request, the taxpayer must surrender the fuel distributor license originally issued.
After the license has been canceled by the department, the taxpayer must make sure that all monthly fuel tax filings, up to the period in which the account was closed are completed with correct payments of all fuel tax liabilities.
If the ownership is a change other than stocks of a publicly traded company, a new application must be submitted. If the change in ownership requires a new federal identification number (FEIN), a new application must be filed with the Colorado Department of Revenue. Any person acquiring a ten per cent equity holding in a company or any change in ownership or equity within a twelve month period will require written notification to the Department of Revenue within 30 days. Any person who ceases to be a distributor, supplier, importer, exporter, blender, or carrier must notify the executive director of the Department of Revenue in writing by letter of the discontinuance, sale, or transfer at the time it takes place. All licenses shall be surrendered to the executive director at that time.