2007 California Revenue and Taxation Code Chapter 2. Imposition Of Tax

CA Codes (rtc:7360-7373)

7360.  (a) A tax of eighteen cents (.18) is hereby imposed upon
each gallon of fuel subject to the tax in Sections 7362, 7363, and
7364.
   (b) If the federal fuel tax is reduced below the rate of nine
cents (.09) per gallon and federal financial allocations to this
state for highway and exclusive public mass transit guideway purposes
are reduced or eliminated correspondingly, the tax rate imposed by
this section, on and after the date of the reduction, shall be
recalculated by an amount so that the combined state and federal tax
rate per gallon equals twenty-seven cents (.27).
   (c) If any person or entity is exempt or partially exempt from the
federal fuel tax at the time of a reduction, the person or entity
shall continue to be so exempt under this section.



7361.  (a) For the privilege of storing, for the purpose of removal,
sale, or use, every distributor owning motor vehicle fuel on January
1, 2002, shall pay a tax of eighteen cents (.18) for each gallon
of motor vehicle fuel according to the volumetric measure thereof, on
which a tax has not been imposed under Part 2 (commencing with
Section 7301) as in effect on December 31, 2001, and tax would have
been imposed on any prior removal, entry, or sale of motor vehicle
fuel had Sections 7360 to 7363, inclusive, applied to motor vehicle
fuel for the period before January 1, 2002.
   (b) For purposes of subdivision (a):
   (1) "Storing" includes the possession in a storage facility,
except an approved terminal or refinery, of motor vehicle fuel as
well as the motor vehicle fuel purchased from and invoiced by the
seller prior to January 1, 2002, and in transit on that date.
   (2) "Owning" means having title to the motor vehicle fuel.
   (3) "Distributor" means any person who was required to be licensed
as a distributor under Part 2 (commencing with Section 7301) as in
effect on December 31, 2001.


7362.  The tax specified in Section 7360 is imposed on the removal
of motor vehicle fuel in this state from a terminal if the motor
vehicle fuel is removed at the rack.



7363.  The tax specified in Section 7360 is also imposed on all of
the following:
   (a) The removal of motor vehicle fuel in this state from any
refinery if either of the following applies:
   (1) The removal is by bulk transfer and the refiner or the owner
of the motor vehicle fuel immediately before the removal is not a
licensed supplier.
   (2) The removal is at the refinery rack.
   (b) The entry of motor vehicle fuel into this state for sale,
consumption, use, or warehousing if either of the following applies:

   (1) The entry is by bulk transfer and the enterer is not a
licensed supplier.
   (2) The entry is not by bulk transfer.
   (c) The removal or sale of motor vehicle fuel in this state to an
unlicensed person unless there was a prior taxable removal, entry, or
sale of the motor vehicle fuel.
   (d) The removal or sale of blended motor vehicle fuel in this
state by the blender thereof.  The number of gallons of blended motor
vehicle fuel subject to tax is the difference between the total
number of gallons of blended motor vehicle fuel removed or sold and
the number of gallons of previously taxed motor vehicle fuel used to
produce the blended motor vehicle fuel.



7364.  The tax specified in Section 7360 is imposed as a backup tax
as follows:
   (a) On the delivery into the fuel tank of a motor vehicle
fuel-powered highway vehicle of:
   (1) Any motor vehicle fuel on which a claim for refund has been
allowed; or
   (2) Any liquid on which tax has not been imposed by this part,
Part 3 (commencing with Section 8601), or Part 31 (commencing with
Section 60001).
   (b) On the sale of any motor vehicle fuel on which a claim for
refund has been allowed.
   (c) On the sale and delivery into the fuel tank of a motor vehicle
fuel-powered highway vehicle of any liquid on which tax has not been
imposed by this part, Part 3 (commencing with Section 8601), or Part
31 (commencing with Section 60001).



7365.  Any person that produces blended motor vehicle fuel outside
the bulk transfer/terminal system (the blender) shall pay tax as
provided in subdivision (d) of Section 7363.



7366.  Every enterer shall pay tax on motor vehicle fuel imported
into this state as provided in subdivision (b) of Section 7363.



7367.  Every highway vehicle operator/fueler is liable for the
backup tax imposed under Section 7364.



7368.  Every position holder shall pay the tax on the removal of
motor vehicle fuel from a terminal as provided in Section 7362.



7369.  Every refiner shall pay tax on the removal of motor vehicle
fuel from a refinery as provided in subdivision (a) of Section 7363.



7370.  The terminal operator is jointly and severally liable for the
tax imposed under Section 7362 if both of the following apply:
   (a) The position holder with respect to the motor vehicle fuel is
a person other than the terminal operator and is not a licensed
supplier.
   (b) The terminal operator has not met the conditions of Section
7371.



7371.  A terminal operator is not liable for tax under Section 7370,
if at the time of the removal, all of the following apply:
   (a) The terminal operator is a licensed supplier.
   (b) The terminal operator has an unexpired notification
certificate from the position holder as required by the Internal
Revenue Service.
   (c) The terminal operator has no reason to believe that any
information in the certificate is false.



7372.  (a) The board may accept from the person who receives motor
vehicle fuel removed at a refinery or terminal rack an amount equal
to the tax due and required to be paid by the refiner or
positionholder upon the removal of the motor vehicle fuel from a
refinery or terminal rack, as if the amount were payment of the tax
by the refiner or positionholder under Section 7362 or 7363, as the
case may be, if the Internal Revenue Service authorizes payment of
federal fuel taxes by the receiving party under a two-party exchange
agreement or similar arrangement.
   (b) The refiner or positionholder shall remain primarily liable
for payment of the tax imposed by Section 7362 or 7363 for motor
vehicle fuel removed at the refinery or terminal rack, as the case
may be, plus any penalty or interest, until the amount is finally
paid and credited to the account of the responsible refiner or
positionholder; provided, however, that the board, at its discretion,
may relieve the refiner or positionholder from primary liability for
payment of tax imposed by Section 7362 or 7363 and hold another
person primarily liable for the tax if (1) the Internal Revenue
Service authorizes payment of fuel taxes by the receiving party under
a two-party exchange agreement, and (2) under the Internal Revenue
Service approach to two-party exchange agreements, another person is
primarily liable for payment of the tax, and (3) the board elects to
follow the Internal Revenue Service approach.
   (c) The board may adopt those regulations as it deems appropriate
to carry out this section.


7373.  (a) For the purpose of the proper administration of this part
and to prevent evasion of the tax, unless the contrary is
established, it shall be presumed that all motor vehicle fuel
received at a terminal in this state, imported into this state, or
refined and placed into storage for removal at a refinery in this
state or blended motor vehicle fuel blended or converted in this
state and no longer in the possession of the supplier has been
removed or sold by the supplier.
   (b) The presumption shall not apply if the supplier proves to the
satisfaction of the board that both:
   (1) The supplier has exercised ordinary care in entrusting control
or possession of the motor vehicle fuel to another person.
   (2) The person to whom the supplier has entrusted the control or
possession of the motor vehicle fuel as bailee, consignee, employee,
or agent, caused a removal or sale by the act of converting to that
person's own use the motor vehicle fuel so entrusted to that person
by the supplier.
   (c) If the supplier proves to the satisfaction of the board, the
existence of both of the circumstances in paragraphs (1) and (2) of
subdivision (b), then the person who converted the motor vehicle fuel
to his or her own use, as well as any other person receiving that
motor vehicle fuel with the knowledge that it was so converted, shall
be liable for payment of the tax imposed upon that removal or sale,
and all of those persons shall be considered as suppliers for the
purpose of Chapter 5 (commencing with Section 7651) or Chapter 6
(commencing with Section 7851) of this part.