The Special Fuel User or Seller License is mandatory for a person importing, exporting or buying any special fuel in bulk, tax-free, with the intent of using or selling the fuel. Special fuel are any fuels other than gasoline, including diesel fuel, fuel oil, kerosene, natural gas, propane, jet fuel, SVO (straight vegetable oil) and any form of liquid biological fuel, such as bio-diesel fuel. The three types of special fuel license are: Special Fuel Seller, Special Fuel User and Turbine Fuel Seller. The licenses ensure that the state receives the appropriate motor fuel taxes. Taxes collected are used to pay for transportation-related construction and maintenance projects statewide.
PRE-APPROVAL: The application form is a general business profile questionnaire used to determine the classification of special fuel license and the amount of potential tax liability for surety bond. The application must include the following information:
- The applicant's legal name and address.
- The applicant's federal identification number.
- Type of ownership and type of business.
- Types of fuel used or sold.
- Number of highway and non-highway vehicles.
- Corporate officer information.
- Estimated annual purchase and sales information.
- Location of any bulk storage.
POST-APPROVAL: The licensee files monthly reports. If delivered by the licensee, reports must be filed with the Comptroller of Maryland by the last day of the month following the month being reported. For example, the May activities report must be received by the last day of June. If mailed, the report must be postmarked at least two days prior to the last day of the month following the report period. For example, the May activity report must be postmarked by June 28.
If motor fuel taxes due on the report exceed $20,000, the financial portion must be submitted by electronic funds transfer (EFT). All surety bonds and licenses expire May 31 every year. Any outstanding reports and unpaid taxes, penalties, or interest must be cleared by May 1 to ensure uninterrupted continuation of the license. If a license expires or is canceled for cause, all special fuel activity must stop immediately.
A trader's license or other general business license may be required from the local Clerk of the Court. Some local jurisdictions impose a form of energy tax on special fuels used for purposes other than propelling vehicles.
At least one motor fuel inspection registration is required for each Special Fuel Seller License. Each storage facility in surrounding states directly supplying motor fuel to Maryland as well as each bulk storage facility in Maryland must be registered for fuel quality assurance purposes. Registration information is available from the Comptroller of Maryland. Out-of-State registrants must first register with the Maryland Department of Assessments and Taxation by calling 410-767-1340.
- An applicant submits an application form.
- The Comptroller of Maryland determines the license classification most suited to the described business. A surety bond amount is determined, if required.
- The surety bond form is mailed to the applicant.
- The applicant submits the required motor fuel registration forms.
- After return of the executed bond and power of attorney, the Special Fuel License is issued.
The average processing time is 30 days
There is no fee.
A person may appeal a decision to cancel a license to the circuit court within 30 days. No further business is permitted when a motor fuel license is canceled. All persons should be aware of the confiscation provisions of the Tax-General, Article Title 13, Subtitle 8, Annotated Code of Maryland.
Monthly reports are required of all licensees, even if there is no activity in month. Zero activity would be reported. If a licensee has no activity for six or more months, the license is subject to cancellation. Minimum surety bond amounts are established in the Tax-General Article, Section 13-825 and vary by license class. There is no maximum bond amount. For a return not to be considered delinquent, the detail and financial portions must be received by the Comptroller of Maryland by the due date.
FEDERAL: There is no federal authority for this type of state license; however, there is a very similar federal excise tax imposed on certain diesel fuels. The tax is administered by the U.S. Treasury Department, Internal Revenue Service, Excise Tax Section.
STATE: Tax-General Article, Title 9, Subtitle 3, Annotated Code of Maryland; COMAR 03.03.01
Field Enforcement Division
Motor-fuel, Alcohol and Tobacco Tax Unit
P.O. Box 2999
Annapolis, MD 21404-2999