I was doing some research today and ran across this web page at the department of energy. It has a link to each state and answers some general questions about what the requirement are for different fuels. It also lays out the way they "should" be taxed. Take a look. Click on your state and see what your lawmakers are up to.
We appreciate your question and thank you for the opportunity to address the taxability of the waste motor oil or transmission fluid. Waste motor oil or transmission fluid is taxable as a motor fuel under 5735.01 (D) of the Ohio Revised Code. Because it is used to power a diesel engine, unless you possess an Ohio Motor Fuel Dealer's license, remitting the tax to the state can be difficult. As long as you are not making and selling the biodiesel, you will not need to become a licensed dealer. If this is the case, please call the Motor Fuel Tax Unit to discuss the requirements for an Ohio Motor Fuel Dealer's license.
Note that the diesel fuel that you are making must be clear in nature. Using anything with a red cast is considered a dyed product and if pulled over by our enforcement unit, could result in criminal and civil charges. I am telling you this so that you are aware.
You can report the gallons used on road (only the waste motor oil or transmission fluid, not the diesel as you have already paid the tax on this fuel) by printing the MF 2, Licensed Dealer's Monthly Ohio Motor Fuel Tax Report, from our website (directions listed below), listing the gallons used on road for the period on line 4 and computing the tax at a rate of $0.28 per gallon. I suggest filing this semi-annually and not as the form suggests. I also recommend you keep a copy in your vehicle as you will be able to provide law enforcement a copy of the return showing that you have filed and paid taxes for the waste motor oil or transmission fluid. They can contact our office to confirm that you paid this. I also recommend you keep a copy of this email with your documents. There are no guarantees but documentation will acknowledge the communication with the tax department.
On the MF-2 write "Alternative Fuel Payment" on the top; enclose a check to the treasurer of state and mail to the Excise and Motor Fuel Unit, Ohio Department of Taxation, P.O. Box 530, Columbus, OH 43216-0530. Thanks for you interest and please feel free to call with any additional questions. My telephone number is (614) 466-3505.
To get the MF-2, go to tax.ohio.gov, click on tax forms on the left, in the tax type drop down box, drop down to Motor Fuel tax and click search. Next look for the MF 2 form and print it out. Additionally, here is a link to the form. http://tax.ohio.gov/documents/forms/excise/motor_fuel/MVF_MF2_FI.pdf
Have a great day!
Debbie ****son
Tax Commissioner Agent - Motor Fuel Tax Division
Ohio Department of Taxation
30 E Broad St, 19th Floor, Columbus OH 43215
PO Box 530 Columbus OH 43216-0530
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Here are the rules for alternative fuels.
