The exemption for sales of motor fuel subject to the user fee for use by the federal government, federal agencies, instrumentalities, and federal reservations, and state-owned buses and vehicles used in an educational program provided under Section 12-28-710(6) and (12) must be perfected as follows:

(1) by refund claim by a licensed fuel vendor which made a sale of user fee-paid motor fuel as ultimate vendor to an exempt government user listed above on behalf of the exempt user. The claim must be made directly to the department under regulations and procedures and on forms provided by the department. The department shall issue a refund within thirty days of receipt of the claim for refund from the licensed fuel vendor;

(2) if the department makes a finding that its collections would not be jeopardized by application by an ultimate vendor for a Government Exempt Bulk Sales Permit which entitles that person to make purchases of fuel user fee-free for resale for exempt government use under the following conditions:

(a) The vendor shall make application with the department for the permit on a form acceptable to the department. The application must include:

(i) proof of financial responsibility or bond in an amount not to exceed the user fee on the total gallons to be purchased user fee-exempt in any year;

(ii) an estimate of total user fee-exempt gallons to be sold under the permit on an annual basis, which amount constitutes the limit of user fee-exempt purchases which the applicant is authorized to make, absent re-application pursuant to subitem (f) of this item;

(iii) the name of the suppliers from which the applicant shall make the user fee-exempt purchases under this permit for the term covered by the permit. This subitem does not mandate sales by a supplier to another person;

(iv) a list of government user fee-exempt purchasers qualifying under subsubitem (c) of this subitem and estimated volumes for them;

(v) other information the department reasonably requires.

(b) Upon evaluation of the data provided by applicant and independent investigation of that information the department in its discretion makes, the department shall issue the permit provided under this section to the applicant with a copy to each supplier named by the applicant pursuant to subitem (a) of this item.

(c) In order for a government entity to qualify as a government user fee-exempt purchaser eligible for user fee-exempt sales under this section, the ultimate vendor shall obtain a properly completed Federal Form 1094, its state equivalent, or successor form from the government entity and shall send to the department a copy of this form with an estimate of the annual quantity of motor fuel subject to the user fee to be supplied to that government entity purchaser. The department shall assign an approval number for that government entity and location and shall issue a permit to the ultimate vendor authorizing the ultimate vendor to make user fee-exempt sales of that estimated quantity of fuel to the agency.

(d) The department may not require that the identical gallons purchased by the ultimate vendor under the permit be delivered to the eligible government entity, only that the total gallons purchased under the permit user fee exempt equal the total gallons delivered to all eligible government entities.

(e) If the ultimate vendor fails to deliver any quantity of the user fee-exempt purchases to eligible government entities, the ultimate vendor is liable for the user fee on that quantity. If the excess of user fee-exempt gallons purchased exceeds gallons sold for user fee-exempt use by ten percent, the department in its discretion may levy a penalty equal to ten percent of the user fee due in addition to user fees due.

(f) If the ultimate vendor needs to purchase additional gallons above that estimated to fulfill his commitments, he shall notify the department. If the department is satisfied with the reports submitted accounting for the user fee-exempt fuel previously submitted, it shall increase the quantity authorized on the permit and so notify the supplier.

(3) If the sale to the eligible government entities of motor fuel subject to the user fee occur at a fixed retail pump available to the general public by:

(a) application by the ultimate vendor, having made the sale to the eligible government entity without the user fee, for a refund from the department by submitting the application and supporting documentation the department reasonably prescribes by regulation;

(b) by application for a refund, if the purchase is charged to a credit card issued to an eligible government entity, the issuer of the card elects to be the ultimate vendor, and the federal agency is billed without the user fee;

(c) if the sale to the government entity includes the user fee levied by this chapter, by application for a refund by the government entity from the department including submitting such supporting documentation the department reasonably prescribes by regulation.

HISTORY: 1995 Act No. 136, Section 2; 1996 Act No. 461, Section 4C; 2005 Act No. 145, Section 25, eff June 7, 2005.