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Fuel Taxes | File
See Gasoline and Special Fuel Distributors (listed below)
Exempt Use of Fuel
Other Fuel Tax | Refund
Gasoline and Special Fuel Distributors
Fuel used to power motor vehicles over the road is taxable. This includes farm or ranch vehicles driving over public access roads. For information about fuel uses that qualify for refunds, see
Other Fuel Taxes | Refund
. As a Fuel Distributor account holder, you will be required to file a monthly Fuel Distributor Tax Return through the
Colorado Fuel Tracking System (COFTS)
, reporting all fuel distribution activities. A return must be filed every month, regardless of whether there is activity. If tax is due on the return, electronic payment of tax by
Electronic Funds Transfer (EFT)
is also mandatory.
To file electronically with
Colorado Fuel Tracking System (COFTS)
, you must have a signed "COFTS Electronic Trading Partner Agreement" on file. For more information on filing returns,
COFTS filing schedules and instructions for reporting various filing issue
Fuel Taxes and Fees
Gasoline and gasohol motor fuel taxes
are due when acquired from a terminal and removed for distribution. Three tax-deferred transactions are allowed between Colorado licensed distributors after the fuel has left the terminal of origin. No more than three tax-deferred transactions are allowed. The tax is calculated on gross gallons acquired. The tax rate is 22 cents per gallon.
Aviation fuel taxes (gasoline and jet)
are due when acquired and removed from the terminal rack. Three tax-deferred transactions are allowed between Colorado licensed distributors. The tax rate for aviation gasoline is 6 cents per gallon. The tax rate for aviation jet fuel is 4 cents per gallon. When reporting aviation fuel disbursements, you must provide the airport destination in Column 4
Distributor Schedule of Disbursements Worksheet (DR 7056)
. The Federal Aviation Administration airport code is used to report the destination airport.
The special fuel excise tax
is due when acquired from a terminal and removed for distribution. Three tax-deferred transactions are allowed between Colorado licensed distributors. The tax is due on gross gallons acquired. The rate is 20.5 cents per gallon for all special fuels with the exception of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG). These fuels are taxed at a separate rate that will change annually from January 1, 2014 through 2019.
For more information on the rate schedule, see Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) and Fuel Rates further down on this page.
The Environmental Response Surcharge (ERS)
is due from all distributors who report the acquisition of fuel in Colorado. The rate fluctuates based on revenue in the Petroleum Storage Tank Fund. The ERS must be included on all fuel sold in Colorado, with the exception of: aviation fuel, fuel exported out of Colorado, fuel sold to railroads for off road use, or any fuel subject to the LPG/Natural Gas Fee.
The Liquefied Petroleum Gas and Natural Gas Inspection Fee
is imposed on purchases of LPG, LNG, CNG and collected by distributors of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG) in Colorado.
When reporting the acquisition of gasoline and special fuel and determining the amount of excise tax due, Colorado law provides for a 2 (two) percent allowance of the total amount of fuel to be deducted by the licensed distributor. The 2 percent allowance covers any losses in transit and in unloading the fuel and costs of collection. Out of this allowance, the licensed distributor shall make to each retailer an allowance of one percent of the amount of gasoline or special fuel delivered during each calendar month as shown by delivery invoices signed by the retailer.
Sales Tax on Aviation Jet Fuel
Colorado state and state-collected local sales tax is due on aviation jet fuel used in turbo-propeller or jet engine aircraft. Sales tax is charged on the purchase price of the fuel. The purchase price may include the cost of fuel, state and federal excise taxes, and any airport fuel flowage fees.
The amount of aviation jet fuel sold (retail sales) is reported when the retailer/distributor files their Colorado Aviation Fuel Tax Return and Reporting Form. Retail sales tax filers will report on the
Aviation Fuel Sales Tax Return (DR 1510)
Only Colorado fuel licensees (distributor, supplier, blender, or importer) responsible for the collection of the excise tax can sell fuel, which is exempt from the Colorado fuel excise tax, to users.
Gasoline can only be sold without excise tax to government entities.
The gasoline must be requisitioned and used by the government entity and paid for with funds drawn from the government entity. Government entities must apply for and receive an exemption certificate from the Colorado Department of Revenue before they can purchase fuel tax exempt. Government entities can apply for an exemption certificate by completing the
Application for Fuel Tax Exemption Certificate for Government or Political Subdivision (DR 0241)
. Upon receipt of an exemption certificate, such governmental entity may purchase gasoline or special fuel from a distributor without payment of the excise tax imposed pursuant to statute if the gasoline or special fuel is used exclusively by the governmental entity in performing its governmental functions and activities.
Special fuel can be sold without excise tax to government entities
, and the same guidelines as gasoline apply. All other sales of clear diesel fuel must include the excise tax. If purchasers feel they have an exempt use of the fuel, they can apply to the Department of Revenue for a refund.
Dyed diesel fuel
is sold without excise tax to be used for exempt purposes off road such as agricultural, home heating, or commercial manufacturing. Dyed diesel is not exempt from the Environmental Response Surcharge fee.
is exempt from fuel excise tax when sold to commercial and scheduled air carriers that are exempt from the federal aviation fuel taxes. Aviation fuel sold to government entities is exempt from the Colorado aviation excise tax.
Liquefied Petroleum Gas (LPG)/ Propane
used to propel a motor vehicle on Colorado highways must be sold with the excise tax included. LPG/ Propane can be sold without excise tax to an end user for use in a home heating system or other non-vehicle uses. The fee for
Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG)
must be included on all sales of LPG, LNG and CNG. The fee has the same exemptions as the Environmental Response Surcharge.
All other deliveries and sales of fuel must include the excise tax
and be reported as such when filing the Colorado Fuel Distributor Tax Return. If purchasers are using excise tax paid fuel for purposes exempt by statute, they can apply to the Colorado Department of Revenue for a refund permit to receive a refund of the excise tax paid. See Other Fuel Taxes | Refund.
Loads scheduled to be delivered to a location outside of Colorado, but diverted to a Colorado location, must be reported to the National Fuel Diversion Registry within 24 hours of the diversion. This is required of all Colorado fuel licensees and third party carriers.
Register a diversion
When a diversion is reported, you will receive a diversion tracking number to report delivery information on a diverted load. Diversions are tracked by bill of lading number, date, and TCN (terminal code number.) Information required when reporting a diverted load is:
Carrier name and FEIN.
Purchaser name and FEIN.
Terminal Code where fuel was acquired and transportation mode.
Original destination state and revised destination state.
Document Number (Bill of Lading #) and date shipped.
Type of fuel and gross, net, and billed gallons.
Colorado law requires that you keep true and complete records of your fuel tax returns, receipts, disbursements, and activities for at least three years after filing of returns.
Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) and Fuel Rates
Effective January 1, 2014, the tax on LPG, LNG and CNG fuels will be $.03 per gallon or gallon equivalent. CNG fuel will be taxed at the gallon equivalent rate**, defined by the Internal Revenue Service as 126.67 cubic feet of natural gas. The tax rates per gallon will be:
Fuel distributors must note that the Liquefied Petroleum Gas Fee is now the Liquefied Petroleum Gas and Natural Gas fee. The fee is $10 per tank truckload and includes fuel sales of natural gas as well as LPG sales. A tank truckload is defined as 8,000 gallons of LPG or LNG and 8,000 gallon equivalents of CNG The fee will be $.00125 per gallon. See
CNG/LNG Conversion Information
Liquefied Petroleum Gas and Natural Gas Inspection Fee
This fee is collected on sales of odorized liquefied petroleum gas and natural gas for the Liquefied Petroleum Gas (LPG) and Natural Gas (NG) Inspection Fund, created to provide funding for the inspection of installations, calibration and adjustment of meters and dispensers, and testing. The fee is collected for the following fuels: liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG). The fee is currently set at a per tank truckload rate of $10, which is reported at $.00125 per gallon or gallon equivalent. A tank truckload is defined as 8,000 gallons or, in the case of CNG, gallon equivalents. The fee is collected, reported and paid on the
Colorado fuel tax return
of the manufacturer or distributor who is responsible for reporting the gallons and remitting tax due on LPG, LNG and CNG.
See Gasoline and Special Fuel Distributors
Passenger Mile Tax
Passenger Mile Tax Return (DR 0133)
is filed quarterly. The returns will be mailed to taxpayers near the end of the quarter, with a due date at the end of the following month. For example, a return for the period of April – June would be due on July 31.
Failure to receive the form does not relieve the taxpayer of his/her responsibility to file the return by the due date. Please notify the department if you do not receive a form.
Enter passenger mile tax from the
Passenger Mile Detail By Passenger Buses (DR 7011)
worksheet. Follow detailed instructions on that form to calculate passenger mile tax. Indicate a zero (0) if you did not operate in Colorado.
Calculating the Tax
The passenger mile tax is calculated as follows: Number of passengers, multiplied by the number of Colorado miles, multiplied by $.001. This calculation is done for each bus and each trip. Add all of the trips together for the quarter and record the total on the DR 0133.
Instructions and Forms
Fuel Tax Forms
Disagree with a Billing Notice
Taxpayers who disagree with the balance due notice have the right to protest the amount due. The protest must be filed within 30 days from the date of the notice. Refer to your correspondence for any specific documentation required.
File a Protest
, click on the File a Protest link. It is not necessary to Login to Revenue Online to file a protest. Supporting documentation may also be attached to the protest in Revenue Online.
Colorado Department of Revenue
Protest Section #200
PO BOX 17087
Denver, CO 80217-0087