Current through Register Vol. 48, No. 38, September 20, 2024
a) Filing of Claims. Any distributor or
supplier who shall have paid Motor Fuel Tax upon motor fuel used by the
distributor or supplier for any purpose other than operating a motor vehicle
upon the public highways or waters, may file a claim for credit or refund to
recover the amount so paid. The claims shall be filed on forms prescribed by
the Department. On and after January 1, 2016, claims are required to be filed
electronically in accordance with 86 Ill. Adm. Code 760 only for periods for
which an original return is required to be filed electronically. All other
claims must be filed on paper forms. The claims shall be made to the
Department, duly verified by the claimant (or by the claimant's legal
representative if the claimant shall have died or become a person under legal
disability). The claim shall state such facts relating to the purchase,
importation, manufacture or production of the motor fuel by the claimant as the
Department may deem necessary and shall state when the nontaxable use occurred
and shall specify the purpose for which the motor fuel was used by the
claimant, together with such other information as the Department may reasonably
require. Claims for credit or refund for tax paid on motor fuel purchased on or
after July 1, 1965, must be filed not later than one year after the date on
which tax was paid by the claimant. In case the distributor or supplier
requests and the Department determines that the claimant is entitled to a
refund, the refund shall be made only from such appropriation as may be
available for that purpose. If it appears unlikely that the amount appropriated
would permit everyone having a claim allowed during the period covered by the
appropriation to elect to receive a cash refund, the Department shall provide
for the payment of refunds in hardship cases as provided in 86 Ill. Adm. Code
130.1510.
b) The Department will approve claims for
refund only when the claims are based upon a showing that the motor fuel was
used for a nontaxable purpose, and that the part for which refund is claimed
can, as a practical matter, be calculated and itemized. When the claims are
estimated or calculated, they must be supported by verifiable documentation
retained in the claimant's books and records. Only claims that can be supported
by proof of the amount of motor fuel not used for a taxable purpose will be
approved.
c)
For claims
based upon taxes paid on or after January 1, 2001, no claim based upon the use
of undyed diesel fuel shall be allowed except for claims for the
following:
1)
Undyed diesel
fuel used: in a manufacturing process, as defined in Section 2-45 of the
Retailers' Occupation Tax Act, wherein the undyed diesel fuel becomes a
component part of a product or byproduct, other than fuel or motor fuel, when
the use of dyed diesel fuel in that manufacturing process results in a product
that is unsuitable for its intended use; or for testing machinery and equipment
in a manufacturing process, as defined in Section 2-45 of the Retailers'
Occupation Tax Act, wherein the testing takes place on private
property.
2)
Undyed diesel fuel used by a manufacturer on private property in the
research and development, as defined in Section 1.29 of the Law, of machinery
or equipment intended for manufacture.
3)
Undyed diesel fuel used by a
single unit self-propelled agricultural fertilizer implement, designed for on
and off road use, equipped with flotation tires and specially adapted for the
application of plant food materials or agricultural
chemicals.
4)
Undyed diesel fuel used by a commercial motor vehicle for any purpose
other than operating the commercial motor vehicle upon the public highways.
Claims shall be limited to commercial motor vehicles that are operated for both
highway purposes and any purposes other than operating such vehicles upon the
public highways and shall be limited to the nonhighway portion of the fuel
used. For instance, such claims include, but are not limited to,
commercial motor vehicles such as 3-axle dump trucks operated both on public
highways and on landfills in landfill operations. This subsection (c)(4) does
not include claims filed for undyed diesel fuel used by power take-off
equipment. This type of claim is described in subsection (c)(7).
5)
Undyed diesel fuel used by a unit
of local government in its operation of an airport if the undyed diesel fuel is
used directly in airport operations on airport property.
6)
Undyed diesel fuel used by
refrigeration units that are permanently mounted to a semitrailer, as defined
in Section 1.28 of the Law, wherein the refrigeration units have a fuel supply
system dedicated solely for the operation of the refrigeration units.
Claims may be made for 100% of the fuel consumed by the refrigeration
units.
7)
Undyed diesel
fuel used by power take-off equipment as defined in Section 1.27 of the
Law. (Section 13 of the Law) Claims shall be based upon actual
consumption of undyed diesel fuel. The maximum amounts of undyed diesel fuel
that may be claimed for refund under this Section, however, is 25% of the fuel
consumed, unless prior to submission of the claim the claimant submits a
specific study conducted by the claimant and approved by the Department for
claims in excess of this amount. Approved studies shall be valid for 2 years
after the date of approval. However, upon petition of a taxpayer, the
Department may approve an extension of a previously approved study for no more
than 2 years. No study may be relied upon for a total of more than 4
years.
8)
Beginning on
August 22, 2005, undyed diesel fuel used by tugs and spotter equipment to shift
vehicles or parcels on both private and airport property. Any claim
under this subsection (c)(8) may be made only by a claimant
that owns tugs and spotter equipment and operates that equipment on both
private and airport property. The aggregate of all credits or refunds resulting
from claims filed under this subsection (c)(8) by a claimant
in any calendar year may not exceed $100,000. A claim may not be made under
this subsection (c)(8) by the same claimant more often than
once each quarter. For purposes of this subsection (c)(8),
"tug" means a vehicle designed for use on airport property that shifts
custom-designed containers of parcels from loading docks to aircraft, and
"spotter equipment" means a vehicle designed for use on both private and
airport property that shifts trailers containing parcels between staging areas
and loading docks. (Section 13 of the Law)
9) Claims for taxes paid on and after January
1, 2001 are not authorized for commercial vehicles unless the commercial
vehicle falls within the definition of a "commercial motor vehicle" as provided
in Section
500.100 of this
Part and the claim is eligible for refund under subsection (c)(4), or the claim
is eligible for refund under any of the other provisions of this subsection
(c).
10) Claims for taxes paid on
and after January 1, 2001 are not authorized for undyed diesel fuel used by
unlicensed commercial vehicles operating exclusively on private property,
unless the vehicles are eligible for refund under any of the provisions of this
subsection (c).
d)
Effective July 1, 2001, any person who has paid the tax imposed by
Section 2 of the Law upon undyed diesel fuel that is unintentionally mixed with
dyed diesel fuel and who owns or controls the mixture of undyed diesel fuel and
dyed diesel fuel may file a claim for refund to recover the amount paid. The
amount of undyed diesel fuel unintentionally mixed must equal 500 gallons or
more. Any claim for refund of unintentionally mixed undyed diesel fuel and dyed
diesel fuel shall be supported by documentation showing the date and location
of the unintentional mixing, the number of gallons involved, the disposition of
the mixed diesel fuel, and any other information that the Department may
reasonably require. Any unintentional mixture of undyed diesel fuel and dyed
diesel fuel shall be sold or used only for nonhighway purposes.
(Section 13 of the Law)
e) Issuance
of Credit Memoranda - Use Thereof to Satisfy Prior Rights of Department. The
Department may make such investigation of the correctness of the facts stated
in the claims for credit or refund as it deems necessary. When the Department
approves a claim for credit or refund the Department shall issue a refund or
credit memorandum to the distributor or supplier who made the payment for which
the refund or credit is being given or, in the event that the distributors or
suppliers shall have died or become incompetent, to the distributor's or
supplier's legal representative, as such. The amount of the refund or credit
memorandum shall first be credited against any tax due or to become due under
the Law from the distributor or supplier who made the payment for which credit
has been given. This means that if there is an established or admitted unpaid
Motor Fuel Tax liability on the part of the claimant, the amount of the credit
or refund will be credited against the tax that is due. If the credit or refund
is in an amount less than that of the unpaid liability, the credit or refund
shall be applied against the liability. If the amount of the credit or refund
exceeds that of the unpaid liability, after crediting an amount sufficient to
liquidate or cancel out the unpaid liability, the Department will issue a new
credit memorandum or refund representing the difference between that of the
original credit or refund found to be due and that of the liability liquidated
or paid as aforesaid, and such new credit memorandum or refund will be
delivered to the person entitled to receive the delivery, provided that no
proceeding is pending against the claimant to establish an unpaid liability
under the Law. If a proceeding to establish such an unpaid liability is
pending, the credit memorandum or refund will be held by the Department until
the proceeding is concluded; and if the proceeding results in a determination
that Motor Fuel Tax is due from the claimant, the credit memorandum or refund
will be applied by the Department, to the extent that may be necessary, in
liquidation of the liability, and the balance of the credit memorandum or
refund, if any (after cancellation of the credit memorandum or refund applied
in liquidation of said liability), will be issued in the form of a new credit
memorandum or refund and delivered to the person entitled to receive the
delivery.
f) Disposition of Credit
Memoranda by Holder Thereof
1) Assignment of
Credit Memoranda. Credit memoranda may be assigned or transferred only after a
request for that purpose is filed with the Department upon forms prescribed and
furnished by it, and subject to the following conditions:
A) That the assignment is made to a person
who is licensed as a distributor of motor fuel or a supplier of special fuel
under the Law;
B) that there is no
proceeding pending to establish an unpaid Motor Fuel Tax liability against the
assignor; and
C) that there is no
established or admitted unpaid Motor Fuel Tax liability against the assignor;
provided, that if the amount of the credit memorandum must first be applied, in
whole or in part, against an unpaid liability of the claimant-assignor, notice
to this effect will be given the claimant-assignor by the Department. If any
balance is due the claimant-assignor, after application of the credit
memorandum in the manner and to the purposes aforesaid, the balance may be
assigned upon receipt by the Department of instructions to that effect. If
there is no unpaid liability and no proceedings pending to determine a
liability as aforesaid, and if the assignee is a licensed distributor of motor
fuel, the request for leave to assign will be approved. The original credit
memorandum will be cancelled, and a new credit memorandum will be issued to the
assignee in the amount shown on the cancelled memorandum. However, before a
credit memorandum is issued to the assignee, the amount of the credit will be
applied, to the extent that may be necessary, in liquidation of any unpaid
Motor Fuel Tax liability of the assignee, and a credit memorandum for the
balance, if any, will be issued to the assignee, provided that there is no
proceeding pending against the assignee to establish an unpaid Motor Fuel Tax
liability against him or her. If a proceeding to establish such an unpaid
liability is pending, the credit memorandum will be held by the Department
until the proceeding is concluded; and if the proceeding results in a
determination that Motor Fuel Tax is due from the assignee, the credit will be
applied by the Department, to the extent that may be necessary in liquidation
of the liability, and the balance of the credit, if any (after cancellation of
the credit memorandum applied in liquidation of said liability), will be issued
in the form of a new credit memorandum and delivered to the person entitled to
receive the delivery.
2)
Submission of Credit Memoranda With Monthly Returns. Credit memoranda, in the
hands either of the original claimant or of his or her assignee, may be
submitted to the Department, along with monthly tax returns, in payment of
Motor Fuel Tax due from the holder of the credit memoranda. If, after applying
any such credit memorandum against the amount of tax shown to be due by the tax
return with which the credit memorandum is submitted, the Department finds that
there is a balance of the credit memorandum in favor of the distributor or
supplier submitting the credit memorandum, the Department will cancel the
credit memorandum that has been submitted and will issue and deliver to the
distributor or supplier a new credit memorandum for the balance. This process
will be followed until the credit, to which the distributor or supplier is
entitled, is exhausted. However, any new credit memorandum, which is issued as
provided in this subsection (f)(2) for a balance of credit due the distributor
or supplier after applying the amount of a credit memorandum to the payment of
current taxes, is subject to the prior rights of the Department to the same
extent that such prior rights take precedence when a credit memorandum is first
issued (see subsection (e) of this Section) or when leave to assign a credit
memorandum is requested (see subsection (f)(1) of this Section).
g) Refunds to Distributors and
Suppliers. If any distributor or supplier ceases to be licensed as a
distributor or supplier while still holding an unused credit memorandum, the
distributor or supplier may, at his or her election (instead of assigning the
credit memorandum to another licensed distributor or supplier under the Law),
surrender the unused credit memorandum to the Department and receive a refund
in lieu of the credit.
h)
Claims filed under this Section for overpayment of the Motor Fuel Tax
imposed by Section 2 of the Law shall bear interest at the rate and in the
manner specified in the Uniform Penalty and Interest
Act.Claims made under this Section that are based upon motor
fuel used for any purpose other than operating a motor vehicle upon the public
highways or waters shall be paid within 90 days after receipt of a complete and
correct application for credit. If credits based upon motor fuel used for any
purpose other than operating a motor vehicle upon the public highways or waters
are issued after expiration of the 90 day period, the Department shall include
interest at the rate and in the manner set by the Uniform Penalty and Interest
Act [35 ILCS 735 ]. (Section 13 of the Law) Refunds paid after the
expiration of the 90 day period shall bear interest from the date that a
properly completed claim for refund was filed with the Department.
