Motor Fuels Tax Audit Procedures Manual - Ch. 153


Additions and Deletions List
The monthly update list of permit deletions and additions required to be mailed by the Comptroller to all distributors and suppliers.
Methyl alcohol, ethyl alcohol (ethanol), tertiary butyl alcohol (TBA), isopropyl alcohol, normal butyl alcohol, isobutyl alcohol, methyl tertiary butyl ether (MTBE), tertiary amyl methyl ether (TAME), di-isopropyl ether.
Average Miles Per Gallon
The miles driven divided by the gallons consumed. According to the statute, fuel is consumed when it is placed into the fuel tank.
Aviation gasoline.
Auxiliary Power Unit
A separate motor mounted on a motor vehicle using the fuel supply tank of the motor vehicle.
Aviation Fuel Dealer
A person who:
  • Is the operator of an aircraft servicing facility?
  • Delivers gasoline or diesel fuel exclusively into the fuel supply tanks of aircraft or into equipment used solely for servicing aircraft and used exclusively off-highway, and
  • Does not use, sell or distribute any gasoline or diesel fuel on which a fuel tax is required to be collected or paid to this state.
42 gallons.
A petroleum diesel fuel substitute that is manufactured from vegetable oils, animal fats, or recycled greases combined with alcohol (ethanol or methanol) in the transeterification process.
Means the mixing together of one or more products with other products to produce a product that is offered for sale, sole, or used as a motor fuel.
Any petroleum product component of gasoline: straight-run gasoline, raformate, alkylates, butane, pentane, hexane, hydrocrackate, toluene, straight-run naphtha, catalytically cracked gasoline, thermally cracked gasoline, coker gasoline, polymer gasoline, natural gasoline, pentane mixture, raffinates, isomerate, butenes, aviation gasoline.
Bobtail Truck
Usually a six-wheel fuel delivery truck with a capacity of about 2,500 gallons.
Book Inventory
A computed inventory arrived at by adding all receipts to beginning inventory and subtracting all disbursements, as opposed to an actual physical inventory.
Bottom Load
To load a transport truck by the lines at the bottom of the transport rather than through the compartment dome at the top.
Any quantity of fuel sold or delivered except into fuel supply tanks of vehicles.
Bulk Facility
A facility that receives gasoline and/or diesel fuel by pipeline, rail, or barge and then delivers the fuel into a cargo tank or barge. The term does not include petroleum products consumed at an electric generating facility.
Bulk Plant
The facilities of a distributor or supplier which has the storage capacity to receive and disburse fuel in bulk.
A liquefied gas.
The marker or indicator welded inside a cargo tank, which is used to mark the calibrated capacity.
Cargo Tanks
An assembly used for transporting, hauling or delivering liquids, comprising a tank, which may be one compartment or may be subdivided into two or more compartments mounted on a wagon, automobile, truck, trailer or wheels, together with its accessory piping, valves and meters, excluding fuel supply tanks connected to the carburetor or fuel injector of a motor vehicle.
Compressed natural gas. An clean air propellant for motor vehicles governed by SubChapter D - Liquefied Gas Tax.
Code Access Bulk Fuel Station
An unattended self-service fueling system whereby the customer obtains fuel by activating the system by use of a code.
Commercial Purpose
The motor vehicle is being operated for profit or as part of a business, industry or trade.
Texas Comptroller of Public Accounts or authorized agent.
Usually a person operating a service station or bulk plant selling fuels belonging to another person or oil company for a commission.
Credit Gallons
The result on returns where the tax-paid fuel exceeds the taxable sales and/or uses. Most common with interstate truckers.
Cutter Stock
A refined fuel oil end product normally used for further blending but sometimes sold as diesel fuel for tax evasion purposes.
Daisy Chain
A slang term applied to a series of transactions in which fuel is transferred between several parties, often related. Usually used (legally) to overcome state and federal regulations. Sometimes used illegally to hide identity of purchaser, or to disguise illegal transactions.
A person who is the operator of a service station or other retail outlet who delivers motor fuel into the fuel supply tanks of motor vehicles or motorboats.
A windshield sticker permit for liquefied gas.
Diesel Bulk Delivery
The delivery of a quantity of diesel fuel in excess of five gallons, but does not include a delivery into the fuel supply tanks of a motor vehicle.
Diesel Fuel
Any liquid, including kerosene, suitable for the propulsion of diesel-powered motor vehicles, but does not include gasoline or liquefied gas.
Diesel Fuel Jobber
A permit holder who:
  • Purchases tax-paid diesel fuel from a permitted supplier, another Jobber, or a dealer; and
  • Makes a sale with the tax included to a permitted supplier, another jobber, a dealer, or a bulk user.
Diesel Tax Pre-Paid User
A person:
  • Whose purchases of diesel fuel are predominantly for non-highway use.
  • Whose only diesel-powered motor vehicles are passenger cars or light trucks, and
  • Who elects to prepay an annual diesel fuel tax to the Comptroller on each diesel-powered motor vehicle.
Diesel User
A person who delivers, or causes to be delivered, diesel fuel into the fuel supply tanks of motor vehicles owned or operated by him.
A person who regularly makes sales or distributions of gasoline which are not deliveries into the fuel supply tanks of motor vehicles, motorboats, or aircraft, or who refines, distills, manufactures, produces, or blends for sale or distribution tax-free gasoline in this state, imports or exports tax-free gasoline other than in the fuel supply tanks of motor vehicles, or in any other manner acquires or possesses tax-free gasoline.
Diversion Number
Means the number assigned by the Comptroller, or by a person to whom the Comptroller delegates or appoints the authority to assign the number, that relates to a single cargo tank delivery of motor fuel that is diverted from the original destination state printed on the shipping document.
A bulk delivery of fuel from a transport truck to a service station or other storage.
Dual Carburetion
Applies to motor vehicles, usually pickups, which have a special carburetor and other equipment necessary to use gasoline and liquefied gas interchangeably.
Dyed Diesel
Diesel fuel to which color has been added to indicate that is not suitable for use in vehicles that are driven on the highways and public roads of Texas or other states.
A transaction in which two or more companies transfer to each other quantities of fuel without collecting the market price of the fuel.
Fixed Mileage Factor
A set average miles per gallon applied to the miles traveled by any or all trucks.
Fleet Average
The average miles per gallon obtained by dividing the total gallons consumed by all trucks into the total miles traveled by all trucks.
Fleetlock Fuel System
An unattended self-service fueling system whereby the driver activates the pump with a registered key. Also called a card lock system.
Fuel Ethanol
An alcohol that is made from agricultural products and bioethanol that is made from cellulosic biomass materials.
Fuel Oil
A refinery product having different meanings according to refinery or locale. Usually fuel oil Numbers 1 and 2 is diesel fuel or kerosene whereas fuel oil Numbers 4, 5, 6 or 7 is furnace oil or fuel not suitable for a motor vehicle.
Any liquid offered for sale, sold or used as the fuel for a gasoline-powered engine, but does not include diesel fuel or liquefied gas. Methanol racing fuel would be considered gasoline.
Gasoline Jobber
A permit holder who:
  • Purchases tax-paid gasoline fuel from a permitted distributor, another jobber, or a dealer; and
  • Makes a sale with the tax included to a permitted distributor, another jobber, a dealer, or a bulk user.
Gross vs. Net
Gross is the actual volumetric quantity whereas net is temperature adjusted to 60 degrees F. Gross quantities will exceed net quantities over a one-year period. Temperature variation is greater for gasoline than it is for diesel fuel.
Gross Gallons
Actual, physical, volumetric or non-temperature corrected gallons.
A meter located on the hub of a wheel for determining distance traveled. May also be called a wheelmeter.
IFTA (International Fuels Tax Agreement)
A multi-state (international) agreement for the reporting and remittance of motor fuels taxes.
Import Verification Number
Means the number assigned by the Comptroller, or by a person to whom the Comptroller delegates or appoints the authority to assign the number, that relates to a single cargo tank delivery into this state from another state after a request for an assigned number by an importer or by the common or contract carrier carrying taxable motor fuel into this state for the account of an importer.
Interstate Trucker
A person who for commercial purposes operates in this state, other states or countries a motor vehicle that:
  1. has two axles and a registered gross weight in excess of 26,000 pounds;
  2. has three or more axles; or
  3. is used in combination and the registered gross weight of the combination exceeds 26,000 pounds.
JP-4 Fuel
A jet fuel blend of gasoline and kerosene (predominately gasoline which should be reported as diesel fuel).
Jet A, Jet A-1, and Jet A-4 Fuels
Kerosene-type jet fuels used by commercial airplanes and classified as diesel fuel.
Diesel fuel. No longer generally used for motor vehicles. Used for heating, cooking, lighting and other non-highway use.
Key Lock Station
An unattended self-service fueling system. May also be called key pump, membership card, automatic fueling control, etc. The customer has a special key, card, number code, etc. whereby he can activate the pump for self service.
A person:
  • Whose principal business is the leasing or renting of motor vehicles for compensation to the general public,
  • Who maintains established places of business, and
  • Whose lease or rental contracts require the motor vehicles to be returned to the established places of business at the termination of the lease.
Light Truck
A motor vehicle designed, used or maintained primarily for the transportation of property, and that has a manufacturer's rated carrying capacity not exceeding 2,000 pounds and is intended to include those trucks commonly known as pickup trucks, panel delivery trucks, and carryall trucks.
Liquefied Gas
All combustible gases which exist in the gaseous state at 60 degrees Fahrenheit and at pressure of 14.7 pounds per square inch absolute, does not include gasoline or diesel fuel.
Liquefied Gas Tax Decal User
A person who owns or operates on the public highways of this state a motor vehicle:
  • Equipped with a liquefied gas carburetion system (includes compressed natural gas),
  • Required to be licensed by the State Department of Highways and Public Transportation, and
  • Required to have a Texas certificate of inspection.
A unit of capacity in the metric system. Where service station pumps are calibrated in liters, the number of liters should be divided by 3.785 to arrive at the number of gallons.
Liquefied Gas.
Liquefied Petroleum Gas.
An invoice of the resale cargo. Also, may be any sales or purchase invoice of fuel.
Butane propane mixture.
Any vessel propelled by machinery, whether or not the machinery is the principal source of propulsion.
Motor Fuel
Includes gasoline, diesel fuel, liquefied gas and other products that are offered for sale, sold, or used as propellants of a motor vehicle.
Motor Vehicle
Any self-propelled vehicle licensed for highway use or used on the highway.
Miles per gallon.
Net Gallons
The volume of fuel adjusted to 60 degrees Fahrenheit. Also called temperature corrected.
Non-Highway Vehicles
Includes seismograph units, water well drilling units, highway construction and maintenance equipment and farm equipment.
The meter used to measure the distance traveled by a vehicle.
Passenger Car
A motor vehicle designed for carrying 10 or fewer passengers and used for the transportation of persons.
Petroleum Products Delivery Fee (PPD)
A fee that is imposed, collected, paid to the state by operators of bulk facilities. The fee is assessed when petroleum products are withdrawn from the bulk facility and delivered into a cargo tank or barge or imported into this state for distribution or sale.
Pipeline Terminal
The storage and loading facilities at pipeline outlets, usually of the major oil companies.
Physical Inventory
The actual inventory as measured by computerized equipment, by a stick or sight gauge as opposed to a book inventory.
Prima Facie
At first appearance, at first view before investigation.
A liquefied gas.
Power take-off equipment. Any equipment mounted on a truck which operates off of the mechanical power of the engine. Would not include hydraulic equipment powered by electricity.
Public Highway
A way or place of whatever nature, open to the use of the public as a matter of right for the purpose of vehicular travel, even if the way or place is temporarily closed for the purpose of construction, maintenance, or repair.
Pulling Unit
A truck mounted oil and gas well servicing unit used to "pull" the pipe.
A slang term applied to refrigeration units on trucks or trailers.
Registered Gross Weight (RGW)
The total weight of the vehicle and carrying capacity shown on the registration certificate issued by the Texas Department of Transportation (TxDOT)
Retail Outlet
Generally a service station. However, would include any outlet which delivers fuel into the fuel supply tanks of motor vehicles or motorboats operated by others. A dealer.
An activity conducted by Comptroller enforcement officers and Criminal Investigation agents whereby all trucks are stopped and checked for proper fuel invoices, permits, etc.
A transfer of title, exchange, or barter of motor fuel, but does not include the transfer or possession of motor fuel on consignment.
Signed Statement
The document required to be furnished by non-highway users to permitted diesel suppliers stating that none of the diesel fuel purchased will be delivered into highway vehicles, none of the diesel will be resold and that all of the diesel fuel will be consumed by the purchaser.
Signed Statement - Restricted Use
On 10/01/95 the Signed Statement for Purchasing Tax-Free Diesel Fuel not Legally Usable on Public Highways Form 06-352 became effective. This enabled operators of diesel powered motor vehicles to purchase off-road dyed diesel tax free. The off-road dyed diesel cannot legally be used in motor vehicles on the highways and public roads.
Special Fuels
Prior to 1980, all fuels used to power motor vehicles except gasoline. Includes diesel, kerosene, butane and propane. Still used in the sales tax statute.
A light duty drilling rig primarily used to start a new well.
Splash Blend
To blend or mix two or more products together by merely adding one product to the other such as alcohol to gasoline in a cargo tank compartment or even a service station underground tank.
Stationary Equipment
Includes reefer units, welding generators, vehicle mounted work-over rigs, pumping units, and like equipment which have separate engines and fuel tanks.
Stick Inventory
An inventory computed by using a calibrated pole or stick to measure the depth of fuel in a tank and then converting that measurement to gallons by use of a conversion table. It is the actual or physical inventory as opposed to book inventory.
Slang term meaning calibrated.
The Schedule of Tax-Free Sales, Tax-Paid Sales, Tax-Free Purchases, Aviation Fuel Dealers, Exports and/or Imports which accompanies the distributor, supplier and user reports.
A person who:
  • Refines, distills, manufactures, produces or blends for sale or distribution, diesel fuel in this state.
  • Imports or exports diesel fuel other than in the fuel supply tanks of motor vehicles.
  • Sells or delivers diesel fuel in bulk quantities to dealers, users, aviation fuel dealers, or other suppliers, or
  • Is engaged in the business of selling or delivering diesel fuel in bulk quantities to consumers for non-highway uses.
Temperature Corrected
Applies to the adjustment of the volume of a fuel to 60 degrees Fahrenheit. Same as gross to net or net gallons.
Texas Petroleum Marketers and Convenience Store Association
The motor or pulling unit of a truck transport.
Transit Company
A business that:
  • Transports persons in carriers designed for 12 or more passengers within a political subdivision.
  • Holds a franchise from a political subdivision, and
  • Has its rates regulated by the subdivision or is owned or operated by the political subdivision.
US Department of Transportation (USDOT)
A federal umbrella agency for the administration and regulation of all transportation industries in the United States.
Water-based Diesel Fuel
A combination of water, petroleum diesel fuel, emulsifier, and seasonal additives (when necessary) into an emulsion that is suitable or used for the propulsion of a diesel-powered motor vehicle.
Wet Line
A fuel line from the cargo tank direct to the carburetor.
Wholesale or Jobber
A person who purchases tax-paid gasoline for resale or distribution at wholesale.
Workover Rig
An oil or gas well servicing unit. May also be called a pulling unit.

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(Revised 02/2004)