Michigan – Explanation of Prepaid Sales Tax Requirements for Diesel Fuels

SALT Report 2283 – The Michigan Department of Treasury released additional guidance regarding the expanded prepaid sales tax requirements for diesel fuels that go into effect April 1, 2013. The bulletin provides that the procedures for collecting and reporting the prepaid sales tax will generally follow those already in place for gasoline.

The Department announced that they will provide an estimated credit to assist diesel fuel retailers with the tax payment requirement for their April purchases. This credit may be claimed by filing Form 5042 – Diesel Fuel Advanced Prepaid Credit by April 20, 2013. The credit will be based on the taxpayer’s retail sales of diesel fuel for March 2013. The estimated prepaid credit must be repaid either on the date the retailer stops selling diesel fuel or October 15, 2013, whichever is earlier.

Also, the Department is currently in the process of revising Form 173, Form 429 – Gasoline Supplier and Wholesale Distributor Prepaid Sales Tax Report, Form 2189 Gasoline Retailer Supplemental Report, and Form 5043 to accommodate the diesel fuel prepaid sales tax reporting requirements. These forms will be available on the Department’s website no later than April 5, 2013.

Finally, the frequency in which the Department will announce its prepaid sales tax rates will change from quarterly to monthly.

For Further Information

Michigan Department of Treasury – Notice

SALT Report 2266 – Diesel Fuel Pre-payment Requirement Takes Effect in April