A $0.01 Increase on Motor Oil in the State of California
As of January 1, 2018, the California Motor Oil Fee increase from $0.04/gallon to $0.05/gallon, raising the state Motor Oil Fee to a total of $0.29/gallon from $0.28/gallon. The tax increase will affect motor oil dealers who produce, sell and/or distribute motor oil in packaged retail containers or bulk volumes within the state of California. According to the Department of Food and Agriculture’ Business Regulations Division, part of the Department of Measurement Standards,
“Motor oil includes natural, synthetic and re-refined motor oils, whether or not in retail containers, and in addition, any product used as an additive to a motor oil used in the lubrication of internal combustion engines. Refinery base stocks, manufacturing additives used by motor oil dealers in the commercial compounding and production of motor oils, and other motor oil components are not motor oils for the purposes of fee responsibility unless they are used separately in the lubrication of internal combustion engines, in which case they are “motor oils” for the purpose of the fee responsibility.”
According to Chapter 8. Motor Oil Fee:
- The first motor oil dealer that produces, sells or distributes motor oil in California, whether or not packaged in retail containers, shall pay the fee for all such motor oil sold in California.
- Motor oil exported for sale outside California is exempt from the motor oil fee.
- A person assigned a motor oil dealer permit number and not actively engaged in the business of producing, distributing, or selling motor oil is required to notify the Department in writing within the next reporting period upon ceasing operations dealing with motor oil.
Motor oil dealers facing the recent oil fee increase must prepare and submit to the Department of Food and Agriculture a remittance form in which they must report:
- The amount, in gallons of motor oil purchased, sold, manufactured in California, or imported into California.
- The total amount of gallons of motor oil with fees paid to suppliers.
- The net amount of motor oil gallons to which the fee is applied.
- The signature and title of the representative of the entity authorized to prepare the return.
- The date the return remittance form was signed.
It is important to note that any remittance form and accompanying a motor oil fee received by the Department of Food and Agriculture postmarked after 35 days from the end of the reporting period will be considered delinquent and subject to a late penalty fee. The Department of Food and Agriculture will reject all return remittance forms deemed incomplete, without the full fee due, or one that fails to comply with the necessary reporting requirements. According to the California Code of Regulations, “All payments to the Department must be made by check, draft, money order or cashier’s check payable to the Cashier, California Department of Food and Agriculture.”
Annual remittance forms are possible in lieu of quarterly forms depending on the volume of motor oil sales or purchases, along with a myriad of additional stipulations and adjustments, and we at SCL are here to support you and your business to remain in compliance during this oil fee increase.
Contact an SCL Consultant Today
In a wide range of industrial sectors, if there’s metal touching metal, oil is involved. At SCL, we’re here to protect and optimize the machines that keep our country moving and we pride ourselves on providing superior logistics and solutions, extensive product and industry knowledge and total performance satisfaction for our customers. For information on how we can assist your fleet in choosing the optimal products at a competitive price, contact an SCL consultant today.