Alabama Department of Revenue - Motor Fuels Tax Rules

ALABAMA DEPARTMENT OF REVENUE

BUSINESS & LICENSE TAX DIVISION

MOTOR FUELS TAX RULE
810-8-1-.28. Distributor's License.

(1) A distributor is defined as any person who acquires ownership of motor fuel directly from a supplier at or from a barge, barge line, pipeline terminal, terminal, refinery, or imports motor fuel into this state. The procedure for obtaining a motor fuels license includes making application and obtaining a surety bond as described below:

(a) A distributor makes application for a license upon forms prepared by the department for a license.

(b) The application is accompanied by a filing fee of five dollars ($5.00).

(c) Upon receipt and approval of the application by the department, the distributor is notified by the department of the amount of the surety bond along with forms prepared by the department for obtaining the bond.

(d) Upon the department's receipt of the bond, a motor fuels license will be issued to the distributor with a supply of monthly motor fuels reports.

(2) Minimum surety bonds as in paragraph (c) above are one thousand dollars ($1,000.00); however, the commissioner has discretion to require any additional amount of bond to assure the collection from the distributor of all excise taxes due the state.

(3) A guide for determining the amount of a surety bond is the number of gallons of undyed motor fuel received each month and therefore subject to excise tax shown as an estimate on a distributor's application for a motor fuels license. Computation of a bond's value uses a formula doubling estimated receipts:

Estimates of monthly taxable gallons x excise tax rate x 2 = amount of bond (not less than $1,000.00).

(4) A licensed distributor conducting business at different locations requires one license, if corporate offices where monthly motor fuels reports are prepared are at the same location.

(5) The following licenses allow a distributor to purchase tax-free motor fuel and to sell or distribute motor fuels to others:

(a) Motor fuel license designated by letters "MF" permits the tax-free purchase, sale and distribution of motor fuel only.

(b) Gasoline license designated by the letter "G" permits the tax-free purchase, sale and distribution of gasoline, aviation fuel, and motor fuel.

(6) The license is a personal privilege and is not transferable.

(Sections 40-17-18, 40-17-2, 40-17-14, 40-17-221(b) and 40-17-152, Code of Alabama 1975) History: Amendment filed with LRS January 19, 1996. Certification filed with LRS April 29, 1996, effective date June 3, 1996.

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