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Wisconsin Department of Revenue

Alternate Fuel Tax

  1. What definitions apply for purposes of the Wisconsin alternate fuel tax?
  2. What is the tax rate on alternate fuel?
  3. Who must obtain an alternate fuel tax license?
  4. Who pays the alternate fuel tax?
  5. How is the alternate fuel tax paid?
  6. Where are the alternate fuel tax reports filed?
  7. When are the alternate fuel tax reports due?
  8. Are any fuel sales exempt from the alternate fuel tax?
  9. Who may receive a refund of alternate fuel tax paid?
  10. How do I correct an alternate fuel tax report that I previously filed?
  11. Am I subject to interest or penalties if I file an incorrect alternate fuel tax report?
  12. Should I notify the Department of Revenue if the business has a change to its name, address, or ownership or if the business ceases operating in Wisconsin?
  13. How can I obtain additional information or forms relating to the alternate fuel tax?
  14. What records should I keep for Wisconsin tax purposes, and how long should I keep them?

  1. What definitions apply for purposes of the Wisconsin alternate fuel tax?

    • Alternate fuel - All combustible gases and liquids, other than motor vehicle fuel or aviation fuel, used for the generation of power to propel a motor vehicle; for example, liquefied propane gas (LPG) and compressed natural gas (CNG) [sec. 78.39(1), Wis. Stats.].

    • Person - The term "person" includes a natural person, sole proprietorship, partnership, limited liability company, corporation, association, the State of Wisconsin or any political subdivision, but not the United States or any of its agencies.

    • Licensee - A person who holds an alternate fuel tax license issued by the Wisconsin Department of Revenue.

  2. What is the tax rate on alternate fuel?

    Effective April 1, 2006, the excise tax on alternate fuel is 22.6¢ per gallon for LPG and 24.7¢ per gallon for CNG. The formula used to compute the tax rates for LPG and CNG include the British Thermal Unit (BTU) for each product. Thus the tax rate for LPG may differ from the tax rate for CNG [sec. 78.40(1), Wis. Stats.].

    Annual adjustment of alternate fuel tax rate - Wisconsin law provided for an annual automatic adjustment every April 1st of the alternate fuel tax rate based on the U.S. Consumer Price Index [sec. 78.405, Wis. Stats.]. This annual automatic adjustment was done away with after the calculation of the rate that takes effect on April 1, 2006.

    Inventory tax - Currently there is no statutory authority to impose an inventory tax on alternate fuel if the tax rate were to change.

  3. Who must obtain an alternate fuel tax license?

    You must obtain an alternate fuel tax license if you will place alternate fuel into the supply tanks of licensed motor vehicles, snowmobiles, motorboats, or all-terrain vehicles (unless the ATV is registered for private use) in Wisconsin [sec. 78.47, Wis. Stats.].

    Persons who want a fuel license must hold a Business Tax Registration (BTR) Certificate [sec. 73.03(50), Wis. Stats.]. The BTR certificate and alternate fuel license are issued by the Excise Tax Section in Madison, (608) 261-6435. There is no charge for the fuel license. However, there is a one-time $20 charge for the BTR certificate. The certificate is renewable every two years for $10. The BTR certificate and alternate fuel license are valid until canceled by the licensee or revoked by the Department [sec. 78.48, Wis. Stats.]. A person need only obtain one BTR certificate regardless of the number of licenses or permits held with the Department.

    Security required - The Department may require persons who are responsible for paying the alternate fuel tax to have security (e.g., cash, bond) on file. The amount of security cannot exceed three times a licensee's average monthly liability for alternate fuel tax [sec. 78.48(9), Wis. Stats.].

    Revocation of fuel licenses - It is very important that licensees file their reports timely and pay any amount owing. Licensees with poor filing and/or payment records may have their licenses revoked by the Department.

  4. Who pays the alternate fuel tax?

    The Wisconsin alternate fuel tax is imposed on all alternate fuels placed into the supply tanks of licensed motor vehicles, snowmobiles, recreational motorboats, or all-terrain vehicles (unless the ATV is registered for private use) in Wisconsin, with the exceptions noted below. The alternate fuel tax is payable by the following persons who must be licensed by the Department (and any nonlicensed person who uses nontaxed alternate fuel in a taxable manner) [secs. 78.47 and 78.49(2), Wis. Stats.]:

    • Fuel "users" who make bulk purchases of alternate fuel that they will place into supply tanks of their own licensed motor vehicles, snowmobiles, recreational motorboats, or all-terrain vehicles (unless the ATV is registered for private use). Fuel users who make bulk purchases and do not want to obtain an alternate fuel license from the Department can authorize their supplier via a Certificate of Authorization (Form MF-207) to charge the user the Wisconsin alternate fuel tax which the supplier will then remit to the Department.

    • Fuel "dealers" who place alternate fuel into the supply tanks of licensed motor vehicles, snowmobiles, recreational motorboats, or all-terrain vehicles (unless the ATV is registered for private use), owned by others, or owned by others as well as themselves.

  5. How is the alternate fuel tax paid?

    The alternate fuel tax is paid with a monthly report, Form MF-007 [sec. 78.49, Wis. Stats.]. Persons with a tax liability of less than $500 per quarter can receive approval from the Department to file and pay the alternate fuel tax on a quarterly basis.

    EFT tax payments - Taxes can be paid to the Department by electronic funds transfer (EFT). Information about paying by EFT can be obtained from the Electronic Funds Transfer page or by calling (608) 264-9918.

  6. Where are the alternate fuel tax reports filed?

    Send reports and remittances to:

    Wisconsin Department of Revenue
    Mail Stop 5-107
    P.O. Box 8900
    Madison, WI 53708-8900

  7. When are the alternate fuel tax reports due?

    All reports are due on the last day of the month following the period (month/quarter) covered by the report [sec. 78.49(1)(a), Wis. Stats.]. For example, a report for October is due November 30.

    Late-filed reports are subject to the following charges:

    • Late-filing fee - $10 [sec. 78.68(2), Wis. Stats.].
    • Delinquent interest - 1.5% per month [sec. 78.68(2), Wis. Stats.].
    • Late-filing penalty - 5% per month, maximum 25% [sec. 78.68(4), Wis. Stats.].

    There are no extensions of time granted if you are unable to file an alternate fuel tax report and pay any amount owing by the due date.

  8. Are any fuel sales exempt from the alternate fuel tax?

    The alternate fuel tax is not imposed upon the following [sec. 78.40(2), Wis. Stats.]:

    • Alternate fuel sold to the United States government or its agencies (e.g., Armed Forces, Red Cross).

    • Alternate fuel sold to common motor carriers for the urban mass transportation of passengers.

  9. Who may receive a refund of alternate fuel tax paid?

    • Taxicabs

      Wisconsin law provides that persons who use alternate fuel in operating a taxicab to transport passengers may receive a refund of the Wisconsin fuel tax paid [sec. 78.75, Wis. Stats.]. Vehicles used as taxicabs must be designated as "Vehicle has or will be used for public transportation (taxi)" on the motor vehicle registration form (MV-1) filed with the Wisconsin Department of Transportation. Refund claims must be filed within one year of the date fuel is purchased, and must cover at least 100 gallons. To obtain a refund, contact the Department at (608) 266-7363 or (608) 266-6701 for the Form MF-001, Taxicab Claim for Refund.

    • Off-Road Usage of Alternate Fuel

      Wisconsin law provides that alternate fuel is not subject to the Wisconsin alternate fuel tax when it is used for off-road purposes in mobile machinery and equipment [sec. 78.75, Wis. Stats.]. Exceptions: The tax paid on alternate fuel placed in licensed motor vehicles, snowmobiles, motorboats, and all-terrain vehicles (unless the ATV is registered for private use) is not refundable.

      Generally when alternate fuel is purchased for off-road use, the alternate fuel tax is not charged. However, when you have paid the fuel tax on alternate fuel used for off-road purposes, you can obtain a refund of the tax paid by sending a letter to the Department explaining the circumstances and enclosing the invoice showing your name, the name of the supplier, the date you purchased the alternate fuel, the number of gallons purchased, and the amount of the Wisconsin alternate fuel tax paid. Send your letter and invoice to:

      Excise Tax Section
      Wisconsin Department of Revenue
      Mail Stop 5-107
      P.O. Box 8900
      Madison, WI 53708-8900

      Your letter must be received within one year of the date the alternate fuel is purchased, and must cover at least 100 gallons. If you have any questions, call (608) 266-3223 or (608) 266-0064.

  10. How do I correct an alternate fuel tax report that I previously filed?

    If you need to change the gallons shown on a report previously filed, send the Department of Revenue a letter detailing the changes. Calculate the additional tax you owe or refund you have coming.

    Do not file an amended report or reflect the adjustments on your current report. Send your letter and any remittance owing to:

    Excise Tax Section
    Wisconsin Department of Revenue
    Mail Stop 5-107
    P.O. Box 8900
    Madison, WI 53708-8900

  11. Am I subject to interest or penalties if I file an incorrect alternate fuel tax report?

    The following interest and discretionary penalties may be applied when you file incorrect alternate fuel tax reports:

    • Unpaid taxes bear interest at the rate of 12% per year [sec. 78.68(1), Wis. Stats.].
    • Refunded taxes bear interest at the rate of 9% per year [sec. 78.68(1), Wis. Stats.].
    • Negligence penalty of 25% of the tax is imposed if there was negligence in filing a report [sec. 78.68(3), Wis. Stats.].
    • Fraud penalty of 50% of the tax is imposed if there was intent to defeat or evade the alternate fuel tax [sec. 78.68(5), Wis. Stats.].

  12. Should I notify the Department of Revenue if the business has a change to its name, address, or ownership or if the business ceases operating in Wisconsin?

    You must notify the Department of Revenue when your business has any change to its name, address, or ownership, or when you cease operating in Wisconsin. You can notify the Department by letter or attach a note to your report. If your name or ownership changes and you receive a different Federal Employer Identification Number (FEIN), you must file a new application with the Department and update your security. When you cease operations, you must be sure to file a report for the last month (or quarter) of operations even if you were in business only a few days during that period. Call (608) 261-6435 if you have any questions about your alternate fuel tax license.

  13. How can I obtain additional information or forms relating to the alternate fuel tax?

    Contact the following Department offices to receive more information or forms regarding Wisconsin's alternate fuel tax:

    • Registration and Security

      Wisconsin Department of Revenue
      Excise Tax Section
      Mail Stop 5-107
      P.O. Box 8900
      Madison, WI 53708-8900
      (608) 261-6435
      Fax: (608) 261-7049
      E-Mail Additional Questions

    • Filing Reports, Paying Tax, and Forms

      Excise Tax Section
      Wisconsin Department of Revenue
      Mail Stop 5-107
      P.O. Box 8900
      Madison, WI 53708-8900
      (608) 266-3223 or (608) 266-0064
      Fax: (608) 261-7049
      E-Mail Additional Questions

  14. What records should I keep for Wisconsin tax purposes, and how long should I keep them?

    You must keep a complete copy of your alternate fuel tax reports and all records pertaining to your business for at least 4 years so the Department can determine how you computed your tax liabilities [secs. 78.66 and 78.70(7), Wis. Stats.]. The required records include, but are not limited to, your purchases, receipts, inventories, sales (whether taxable or exempt), distribution and consumption of products. Your records must be kept in a place and manner easily accessible for review by Department representatives. When records are not maintained, the Department presumes that all products you purchase or receive are subject to tax without benefit of any deductions.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Excise Tax Section
Mail Stop 5-107
P.O. Box 8900
Madison, WI 53708-8900
Phone: (608) 266-3223 or (608) 266-0064
Fax: (608) 261-7049
E-Mail Additional Questions

Last updated November 6, 2009