THESE REGULATIONS ARE PROMULGATED BY THE SECRETARY OF THE DEPARTMENT OF PUBLIC SAFETY IN ORDER TO PROMOTE THE EFFECTIVE ENFORCEMENT AND ADMINISTRATION OF THE MOTOR FUEL AND SPECIAL FUEL TAX LAW (CHAPTER 51, TITLE 30, DELAWARE CODE) AS SPECIFICALLY AUTHORIZED IN SECTION 5118 AND SECTION 5138 RESPECTIVELY OF SAID LAW AND FURTHER AUTHORIZED IN THE BODY OF SAID LAW.

2244 Motor Fuel Tax Regulations

Subchapter I. Gasoline

1.1 Delegation:

1.1.1 The routine administration of this subchapter is hereby delegated by the Secretary of Public Safety to the Director of the Division of Motor Fuel Tax except in the matters of appeal of tax assessments and promulgation of rules and regulations.

1.2 Definitions:

"Gasohol" shall be a blend of nine (9) parts unleaded gasoline and one (1) part ethanol and shall be mixed by a distributor at time of delivery to a purchaser. A retail seller shall clearly label all pumps dispensing gasohol as such.

"Gasoline" as defined in section 5101(4), shall include the mixture of gasoline and ethyl alcohol (ethanol) commonly referred to as "gasohol".

"Retailer" shall include a service station, operator, broker, jobber, peddler or any person who offers gasoline for sale in Delaware and who does not possess a valid Delaware Distributor's license.

1.3 License:

1.3.1 MFT-6 for a Retailer's license. The license is required before any person can import, export, sell or distribute gasoline in this state. A business operating without a license may be issued a "Stop Sale" order until the proper license has been acquired.

1.3.2 A license issued by the Department shall be displayed in a conspicuous manner on the premises described on the license.

1.3.3 A license is not transferable to a new owner of a business and must be returned to the Department for cancellation if a business terminates, for whatever reason, during a license year.

1.3.4 A license application shall be reviewed within ten (10) state business days of receipt in this Division and immediately processed, if properly prepared and accompanied by the prerequisite surety bond. If the application is not complete (including bond), it will be returned to the applicant within the ten (10) day review period for the necessary information and/or documents required.

1.4 Bond:

Surety bond (Form MFT-3) in the amount of an estimated three (3) months' tax liability is required before a Distributor's license can be issued. A bond is not required for a Retailer's license.

1.5 Tax Exempt Sales:

1.5.1 Any agency of the Federal, State, County, or Municipal governments or a volunteer fire company or a volunteer ambulance service may purchase gasoline tax free, but first they must apply to the Department for tax exemption on Form MFT-16 in triplicate. Upon approval by the Department, two copies will be returned to the applicant - one for the applicant's files and one to be forwarded to the Distributor. The applicant's copy may be reproduced as needed for presentation to a new Distributor.

1.5.2 Any licensed Distributor intending to sell gasoline tax free to exempt purchasers enumerated in paragraph 1 must first require a tax exemption certificate from said purchaser. The gasoline sale will then be billed tax free to said purchaser by the Distributor. Gasoline cannot be purchased tax free with cash at the pump.

1.6 Reporting:

1.6.1 Tax accrues on delivery of gasoline to a retail dealer (Section 5112) whether a sale or on consignment or whether the outlet is owned by the Distributor. This is interpreted to mean at the time of the "drop", i.e., when placed into the storage tank(s) of the retail outlet.

1.6.2 Ethanol used to produce gasohol is to be reported on the Distributor's monthly report in the same manner as gasoline.

1.6.3 The aggregate allowance for evaporation loss of gasoline as reported on line 14 of the Distributor's monthly report (MFT-1) is limited to a maximum of 1% of the total of the beginning inventory plus receipts over a twelve-month period. Loss in excess of this will be taxed. Tax, once paid, is not recoverable on gasoline lost or missing from a bulk storage tank.

1.6.4 A casualty loss of untaxed gasoline may be claimed if documentation is provided to the satisfaction of the Secretary of Public Safety.

1.7 Refunds:

1.7.1 Tax will not be refunded on gasoline used from the supply tank of a licensed vehicle even though that fuel is used off-highway to operate a power take-off or a separate motor. However, if the vehicle has a separate fuel tank for the loading-unloading operation or if the vehicle is equipped with a metering device which measures the gasoline used in loading and unloading operations when the vehicle is at a standstill, a refund may be claimed. Prior permission and reporting requirements must be secured from the Director before claiming such refunds.

1.7.2 As proof of gasoline purchased on refund applications (Form MFT-4), original invoices must be submitted bearing name of seller, name of purchaser, date of purchase, type of fuel, number of gallons purchased, price per gallon and total amount paid. They must also be marked "paid" and initialed by the seller. In the absence of original invoices for bulk purchases, an itemized statement from the seller indicating that payment has been made will suffice. In the case of gasoline purchased at a retail station in a can or drum for boats, planes or other non-highway use, the invoice must so indicate.

1.7.3 On refund applications, persons claiming to have purchased gasoline at a retail station, when the vehicles are normally fueled from claimant's own bulk tank or when a bulk tank is available on claimant's premises, must present copies of invoice tickets or credit cards to substantiate such retail purchases.

1.7.4 A claimant must indicate ALL gasoline purchased and ALL vehicles fueled from bulk tanks owned or controlled by him on a refund claim and be prepared to document off-highway use, if necessary.

1.7.5 A false statement on a refund claim with intent to mislead or defraud the state shall constitute grounds for voiding the entire claim and expose the claimant to criminal prosecution.

1.7.6 The Director has the right and the obligation to determine a reasonable number of gallons of fuel used per acre in each farm claim for refund. The burden of proof of actual fuel used in farming operations rests with the claimant. In the absence of such proof, the Director may adjust the refund claim to a reasonable figure for farm use.

1.7.7 No gasoline tax refund will be made to any person who owes this Division tax or an assessment, for any reason, until payment is received.

1.8 Records:

1.8.1 The records of Distributors, as required in section 5123, may be microfilmed and these presented to auditors conducting periodic audits, providing the original records are maintained for three (3) years and are available when and if required during the audit. Equipment for viewing the microfilm must be provided by the taxpayer.

1.9 Standards:

1.9.1 When analyzed by a laboratory, if the ethanol content of a sample of gasohol is significantly more or less than 10%, a "Stop Sale" will be issued to the seller until the situation is corrected.

1.9.2 Assuming a "Stop Sale" is issued for a specification failure of gasohol, adding straight ethanol to the storage tank to raise the ethanol content will not be permitted. The product must be pumped out and reblended at the proper temperature for homogenizing before replacing into storage.

1.9.3 For purposes of the administration of this chapter, the State of Delaware does hereby adopt the specifications of motor fuels as defined by the "American Society of Testing and Materials" (ASTM).

1.10 Inspection:

1.10.1 The inspection of records authorized under section 5123 shall be deemed to include the inspection of the physical premises, including storage facilities, fuel pump totalizers, the measurement of actual inventories and the taking of fuel samples for testing purposes for which reimbursement will be made.

1.10.2 Whenever an agent of the Department of Public Safety shall find any person marketing gasoline in violation of the provisions of Chapter 51, Title 30, Delaware Code, or the rules and regulations promulgated pursuant thereto, he may direct such person to cease such violation including further sale or distribution of motor fuel and issue a "Stop Sale" for the whole or any part of the operation until such violation has been corrected.

1.10.3 Substandard or contaminated gasoline or gasohol and inoperable or inaccurate pump totalizers shall be specific, but not exclusive, reasons to issue an immediate "Stop Sale". If, after such notification the violation continues, the Secretary of the Department of Public Safety shall refer the matter to the Attorney General of Delaware for legal action as specified in section 5128, Chapter 51, Title 30, Delaware Code.

1.11 Electronic Funds Transfer (EFT)

1.11.1 Definitions:

“Account Name” represents the name that the RDFI will credit with EFT funds being transferred. All funds are credited to the Delaware Transportation Trust Fund.

“Amount” identifies the dollar amount being remitted for each amount type by license and tax period. Since the computer program is right justified, the amount figure should always contain cents (cc).

“Amount Type” is used to identify the payment amount which follows. Identified values include "T" for tax, "P" for penalty and "I" for interest.

“Automated Clearinghouse (ACH)” is a system specifically established to facilitate the processing of electronic payments.

“Automated Clearinghouse Credit (ACH-Credit)” is defined as a transaction in which the taxpayer notifies its originating depository financial institution (ODFI) that it desires to make one or more payments to the receiving depository financial institution (RDFI).

“Bank Routing Number/Account Number” represents the bank routing number for Wilmington Trust Company and Delaware Transportation Trust Fund Account Number

“Electronic Funds Transfer (EFT)” is a generic term applied to any of several means of making payments from one party to another through a series of instructions and messages communicated electronically (via computer) among financial institutions.

“Fedwire” is an alternative method of transferring payment from the taxpayers ODFI to the States RDFI.

“Originating Depository Financial Institution (ODFI)” is defined as the financial institution used by the taxpayer to make one or more payments through a series of instructions or messages.

“Receiving Depository Financial Institution (RDFI)” is defined as the bank designated by the State of Delaware (Wilmington Trust Company) to receive electronic funds transfer (EFT) payments.

“Tax Payment (TXP) Format” is the standardized method of identifying one or more payment types within an EFT transmission.

The TXP Format contains the following segments which identify the data that pertains to an EFT transmission such as FEI-License Number, tax type, tax period, amount type, and amount.

A TXP format may contain payment of tax, interest and penalty if it is in payment of the same federal employer identification number-license number, tax period and tax code.

“Tax Period” is used to identify the tax period in which the payment covers. The digits from left to right represent year-month-date (YYMMDD) respectively.

“Tax type” represents which kind of payment that is being transmitted. Code "051" is used exclusively for payment of motor fuel (gasoline) and "052" is used exclusively for payment of special fuel.

“Taxpayer FEI-License Number” is the identification number used in the TXP format to identify the taxpayer originating the EFT payment. This identification number consists of your Federal Employer Identification number and the five (5) digit license number indicated in the upper right hand corner of the license issued to you by this Division. The FEI number and license number must be separated by a hyphen (-). A separate TXP format is required for each license held.

“Terminator (\)” is used to end a single TXP format.

“The separator” is used to separate fields within a TXP format. The character to be used as a separator is the asterisk (*).

“Total Payment” represents the total monies that are being transferred by the taxpayers bank to the Delaware Transportation Trust Fund. The total amount of the transfer must agree with the payment for each EFT segment.

“Transaction” is defined as the transmittal of the EFT payment accompanied with as many TXP formats as required to completely identify all components of the payment. Refer to "Electronic Funds Transfer Payment Requirements" under Section 11.3.1.

1.11.2 Electronic Funds Transfer Payment Requirements:

1.11.2.1 Every company/firm with a combined (motor fuel and special fuel) minimum monthly tax liability of $20,000 must electronically transmit their tax payments utilizing the ACH-Credit transfer method and follow the tax payment (TXP) format indicated in Section 1.11.3.

1.11.2.2 Any newly licensed company/firm who meets the $20,000 monthly minimum tax threshold requirement must implement the EFT program within two months of receipt of the license.

Any company/firm currently licensed who meets the $20,000 monthly minimum tax threshold requirement for the first time must implement the EFT tax payment program within two months of notification by this Division.

1.11.2.3 Any company/firm that has a combined minimum monthly tax liability of less than $20,000 may electronically transmit their tax payments following the same procedures mentioned in 1.11.2.1 and 1.11.2.2.

1.11.2.4 If payment of penalty and/or interest is for a period other than the tax payment period, a separate TXP format transmission is required for the penalty and/or interest payment.

1.11.2.5 Should a monthly tax period involve a zero payment or no activity tax return, a TXP payment format must be transmitted indicating "0" in the appropriate amount fields.

1.11.2.6 The use of EFT payments, whether required by regulation or on a voluntary basis, cannot be discontinued until requested and approved by the Director.

1.11.2.7 In cases of emergency, the Division will allow the use of Fedwire to electronically transmit tax payments. Prior approval must be obtained from the Department Secretary at least two (2) days prior to the due date so that tax data information may be obtained in order to credit the proper taxpayer account.

1.11.2.8 In lieu of making monthly EFT payments, tax returns and remittances may be hand delivered prior to 12:00 noon (Eastern Standard Time) on or before the due date.

1.11.2.9 All EFT payments must be received by the Receiving Depository Financial Institution before 2:00 p.m. (Eastern Standard Time) on or before the due date. An official state holiday calendar will be distributed annually to all licensed motor fuel and special fuel accounts. When the due date falls on a weekend or state holiday, the due date of the tax payment shall be the next following business day of the state.

1.11.2.10 In order to ensure that tax payments are timely credited to the state account, the Division recommends that the taxpayer notifies its originating bank (ODFI) at least two or three days prior to the impending EFT transaction. A pre-note (test) of the EFT system should take place at least ten days prior to the first EFT transmission in order to establish proper EFT transaction procedures.

1.11.3 Tax Payment (TXP) Format Requirements:

1.11.3.1 The following tax payment format must be used by required EFT accounts and those accounts who elect the EFT program on a voluntary basis.

1.11.4 Tax Report/Schedule Requirements:

1.11.4.1 Tax reports, including applicable schedules, must continue to be filed (U.S. postmarked) on or before the 25th of the month following the tax report month in order to be considered timely filed.