Service station owners pocket diesel tax

[snopes]

Comment: I'm excited because Honda is considering releasing a diesel version of the
Accord in the US, because converting a car's engine to run on biodiesel
(or possibly waste vegetable oil) is something that I would love to
attempt. However, my friend said something that she heard from her
father:

"my dad told me that when you get a Diesel, the price of the gas (on the
sign) includes a 15 cent commercial road tax ... so even though your car
is private, you're paying the 15 cent commercial tax, but when they report
it on their books, they report you as private, so they can pocket the
extra 15cents/gallon"

In past I would have swallowed that pretty fast, but after two weeks
straight of going through your site and learning that a lot of "facts" I
accepted as gospel were well-meaning bunk to outright lies, I'm leery.
Have you heard anything in any direction about this?

[jimmy101_again]

Tax laws can be pretty screwy (well duh ).

The "15 cent commercial road tax" could well be exactly the same as the non-commercial tax.

Since businesses don't usually pay taxes (in the US) on things that are business expenses (fuel for a commercial trucker for example), the "commercial road tax" could well be to offset that. If there is a 15% sales tax then a trucker will either inform the gas station (and show his commercial license) to get the tax removed from the bill or he'll pay the tax and then deduct it from his tax liability at the end of the year.

One way for a state to get around this is to add the "commercial road (use) tax". Now the trucker pays that tax instead of the sales tax. I believe the two taxes are set to be the same to avoid the bookkeeping nightmares.

Besides, I would think that a state (or the Feds) would take a pretty dim view of a gas station charging, then pocketing, the tax. Sounds like a great way to (1) loose your license, (2) have to repay the money with interest and penalties and (3) get thrown in jail.

In general, a retailer of fuel (diesel, gas or what have you) posts the price of fuel including all taxes. A commercial vehicle then would pay the price with all taxes in, and have it deducted from the fuel statement at the end of the year, either by the credit company, or getting a tax deduction at the end of the year. So, if you're paying $3 a gallon for diesel, that's with all taxes. A retailer usually doesn't discount at the counter for commercial vehicles. That's left to the commercial customer's accountant, or crediting company, not the retailer. Especially because as a commercial company, there will be different tax rates for the amount of fuel purchased and used in a year, and whether all the miles were in that state, or whether other states will need their bite of the fuel tax. And they are usually different based on the size of the company and the volume being done at that retailer. The retailer may give a deduction for high volume purchasers, but it will be out of their profit, not out of the tax revenue.

Long story short, in most instances, everybody pays full rate for the fuel, but a commercial company may get a rebate on the tax paid. And the retailer has no part in making the decision to grant the tax exemption.