Did California's use fuel tax prevent sales tax from applying to diesel fuel sold for highway trucks?

Plain-English summary

California concluded that state sales tax applied to diesel fuel sold for use in highway trucks even though the same fuel sale was subject to the Use Fuel Tax Law.

The opinion said section 6357's only retail motor-fuel exemption covered fuel whose distribution was taxed under the Motor Vehicle Fuel License Tax Law, commonly called the Gas Tax Law. The diesel at issue did not fall within that stated exemption.

Common questions

Did paying use fuel tax eliminate sales tax?

No.

What retail fuel did section 6357 exempt under the opinion?

Fuel whose distribution was subject to the Motor Vehicle Fuel License Tax Law.

Citations and references

• California Revenue and Taxation Code § 6357

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/380-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/380-0040.pdf

Original ruling text

380.0040

STATE OF CALIFORNIA

STATE BOARD OF EQUALIZATION
1020 N STREET, SACRAMENTO, CALIFORNIA
(P.O. BOX 942879, SACRAMENTO, CALIFORNIA 94279-0001)
(916) 445-5550

January 4, 1950

I--- F--- L-XXXX So. --- West
--- --- --- X, Utah
Gentlemen:
In answer to your letter of December 27 you are advised that the state sales tax does apply to sales of diesel fuel for use in highway trucks, even though the sale of the fuel is subject to the Use Fuel Tax Law. The only exemption in the Sales and Use Tax Law with respect to retail sales of motor vehicle fuel is contained in Section 6357 thereof which exempts the sale of motor vehicle fuel the distribution of which is subject to the tax imposed by the Motor Vehicle Fuel License Tax Law, commonly referred to as the “Gas Tax Law.” Very truly yours,

R. G. Hamlin
Associate Tax Counsel

RGH:hb