Section 316-73-003 - EXEMPTIONS003.01 Fuels transported into Nebraska which meet the following requirements are exempt from the fuels tax: 003.01A Fuels sold to the United States Government, its agencies, and federal corporations wholly owned by the United States Government (i.e., Federal Land Banks, Federal Land Bank Association, the American National Red Cross and its local chapters). U.S. Tax Exemption Certificates, Federal Form 1094, received by the seller, or other evidence of sale to the federal government must be retained; or003.01B Fuels sold to a metropolitan transit authority established under section 14-1810 of the Nebraska Revised Statutes. The metropolitan transit authority must provide at the time of payment for the fuel a statement to the seller that such fuel was purchased by and used in the operation of a metropolitan transit authority. The statement must be retained in the seller's records to support the tax exempt nature of the sale; or003.01C Fuels delivered for use in a state other than Nebraska. Bills of lading or other documentation must be retained by suppliers, distributors, importers, wholesalers, and exporters of fuels for substantiation; or003.01D Methanol, benzine, benzol, naphtha, kerosene and any other volatile, flammable, or combustible liquid suitable for use as a fuel blending agent or fuel expander shall be exempt from the taxes imposed under the fuels statutes unless and until such methanol, benzine, benzol, naphtha, kerosene or other blending agent or fuel expander is blended with fuel or placed directly into the supply tank of a licensed motor vehicle. Methanol, benzine, benzol, naphtha, kerosene or other blending agent or fuel expander which is blended with fuel shall become subject to the fuels tax at the same time as the fuel with which it is blended becomes subject to tax or upon blending if tax has already been paid on the fuel. Fuel taxes shall not apply to fuel additives which are used to enhance engine performance or prevent fuel line freezing or clogging when placed directly into the supply tank of a motor vehicle in quantities of one quart or less; or003.01E Natural gasoline purchased for use as a denaturant by a producer at an ethanol facility.003.02 Unless otherwise provided by an agreement between the State of Nebraska and a federally recognized Indian tribe within the state, Native Americans may purchase fuels tax free if the purchaser is a resident of a Nebraska Indian Reservation and the purchase is made on the Nebraska Indian Reservation. This provision also applies to any purchase made on a Nebraska Indian Reservation by a business which is wholly owned by Native Americans. The purchaser must provide the seller documentation that the business is owned by Native Americans. The seller must keep records, which include the following information, to support each tax-free sale: a copy of the documentation that the business is owned by Native Americans or that the purchaser is a Native American; the name and address of the purchaser; the date of purchase; the type of fuel sold; the total gallons sold; the total sale price; and the signature of the purchaser.003.03 Except as provided in Reg-73-003.03B, diesel fuel dyed in accordance with regulations issued by the Secretary of the Treasury of the United States under 26 U.S.C. 4082 shall be exempt from the diesel fuel tax and may not be placed into the supply tank of any motor vehicle registered or required to be registered for operation upon the highways of this state. Also, diesel fuel which contains a concentration of sulphur in excess of five-hundredths percent by weight or which fails to meet a cetane index minimum of forty and has been indelibly dyed in accordance with regulations promulgated by the Administrator of the Environmental Protection Agency pursuant to 42 U.S.C. 7545 shall be exempt from the tax. However, dyed diesel fuel shall not be exempt from the Petroleum Release Remedial Action Fee.003.03A Any person who unlawfully uses dyed diesel fuel in the supply tank of a motor vehicle registered or required to be registered for operation upon the highways of this state shall be subject to an administrative penalty of $250 for the first such violation. If the person had another violation under this section within the last five years, the person shall be subject to an administrative penalty of $1,000 for the current violation. If the person had two or more violations under this section within the last five years, the person shall be subject to an administrative penalty of $2,500 for the current violation. These penalties are assessed against the owner of the vehicle as of the date of the violation.003.03B Any motor vehicle owned or leased by any state, county, municipality, or other political subdivision may be operated on the highways of this state with dyed diesel fuel (except high sulphur diesel fuel dyed in accordance with regulations promulgated by the Administrator of the Environmental Protection Agency pursuant to 42 U.S.C. 7545) if the diesel fuel tax is paid. Such fuel tax shall be paid directly to the department on the Nebraska Motor Fuels Consumer's Use Tax Return, Form 74, as set forth in Reg-73-010.003.03C Any person who unlawfully uses compressed fuel in the supply tank of a motor vehicle registered or required to be registered for operation upon the highways of this state without paying the compressed fuel taxes to the retailer at the time of purchase shall be subject to an administrative penalty of $1,000 for each violation. This penalty is assessed against the owner of the vehicle as of the date of the violation.003.04 Undyed diesel fuel used for agricultural, quarrying, industrial, or other nonhighway purposes is exempt from the diesel fuel tax. Except as provided in Reg-73-003.01A, Reg-73-003.02, and Reg-73-003.05, all undyed diesel fuel must be purchased tax paid and the purchaser must apply for a refund of the diesel fuel tax paid on fuel used for an exempt purpose. 003.04A Undyed diesel fuel used in clearing or flushing dyed diesel fuel from delivery lines is not considered to be a nonhighway use or purpose and is consequently subject to the diesel fuel tax and to the Petroleum Release Remedial Action Fee.003.05 A purchaser of diesel fuel that has not been indelibly dyed may present an exemption certificate to the seller when not more than fifty gallons of such fuel is placed directly into the supply tank of a temperature control unit or power take-off unit. To qualify for this exemption, the supply tank of the temperature control unit or power take-off unit cannot be connected to the engine which provides motive power to a motor vehicle or connected to any fuel supply tank connected to the engine of a motor vehicle.003.05A Temperature control units shall mean reefers.003.05B Power take-off unit shall mean any piece of diesel-powered equipment used exclusively for operating another piece of equipment by means of a pulley or shaft-driven transfer of power, such as irrigation pump motors and certain agricultural equipment, but does not include any operation that is powered by the main engine of a motor vehicle.003.05C Agricultural equipment which qualifies as power take-off units includes, but is not limited to, utility tractors that are used exclusively for operating feed grinders, augers, irrigation pumps or other predominantly stationary operations. Incidental use of the equipment, such as moving it from location to location, will not disqualify it from the exemption.003.05D The exemption certificate presented by the purchaser to the seller must either be a Nebraska Tax Exempt Certificate for Purchase of Diesel Fuel, Form 91EX, or a substitute exemption certificate or invoice which contains the following information: 003.05D(1) Name and address of the seller;003.05D(2) Name and address of the purchaser;003.05D(3) Date of the sale;003.05D(4) Name of the product;003.05D(5) Number of gallons purchased;003.05D(6) Price per gallon;003.05D(7) Total sales price;003.05D(8) A statement to the effect: "The undyed diesel fuel indicated on this invoice is being sold tax free for use in a temperature control unit or power take- off unit and was placed directly into the supply tank of the temperature control unit or power take-off unit. Placement of the tax-free, undyed diesel fuel into the supply tank of a motor vehicle will subject the purchaser to tax, interest, and a $1,000 penalty"; and003.05D(9) Signature of the purchaser. 003.05E Any person who unlawfully issues a Nebraska Tax Exempt Certificate for Purchase of Diesel Fuel, Form 91EX, or a substitute exemption certificate or invoice shall be liable for the tax on the diesel fuel and shall be subject to an administrative penalty of $1,000.003.06 If the seller of tax-free undyed diesel fuel is a licensed supplier, distributor, wholesaler, or importer, the seller may deduct the number of gallons sold without the tax from the return for the period during which the fuel was sold or for a subsequent period. If the seller is a licensed retailer, the seller may provide a Nebraska Retailer's Claim for Exempt Sales of Motor Fuels, Form RC73 to the distributor, wholesaler, importer or other supplier of the taxed diesel fuel for the total number of gallons of undyed diesel fuel sold without tax during the prior month.003.07 Fuels transported into Nebraska which meet the following requirements are exempt from the Petroleum Release Remedial Action Fee: 003.07A Fuels sold to the United States Government, its agencies, and federal corporations wholly owned by the United States Government (i.e., Federal Land Banks, Federal Land Bank Association, the American National Red Cross and its local chapters). U.S. Tax Exemption Certificates, Federal Form 1094, received by the seller, or other evidence of sale to the federal government must be retained; or003.07B Fuels delivered for use in a state other than Nebraska. Bills of lading or other documentation must be retained by suppliers, distributors, importers, wholesalers, and exporters of fuels for substantiation; or003.07C Natural gasoline purchased for use as a denaturant by a producer at an ethanol facility.316 Neb. Admin. Code, ch. 73, § 003
Sections 66-6,115 and 66-741, R.R.S. 2003, 14-1810, 66-489.01, 66-495, 66-495.01, 66-726 and 66-1521, R.S.Supp. 2004, 66-489, Laws 2006, LB 1003. January 8, 2007.