Biodiesel Fuel

  1. What is biodiesel?
  2. What is the classification of biodiesel for Wisconsin fuel tax purpose?
  3. Are all blends of biodiesel, including B100, subject to the Wisconsin motor vehicle fuel tax and petroleum inspection fee?
  4. Is recycled vegetable oil the same thing as biodiesel?
  5. Is recycled vegetable oil and/or straight vegetable oil (SVO) sold or used in powering a motor vehicle subject to Wisconsin motor fuel tax and the petroleum inspection fee?
  6. What are the motor fuel tax and petroleum inspection fee rates?
  7. Can biodiesel be sold without the motor vehicle fuel tax?
  8. Do I have to be registered in Wisconsin if I place biodiesel or recycled vegetable oil in a motor vehicle?
  9. How do I report the motor vehicle fuel tax and petroleum inspection fee I owe if I am producing and/or selling biodiesel?
  10. When is biodiesel or diesel replacement renewable fuel exempt from the motor vehicle tax?
  11. Can I file a claim for refund for tax paid on biodiesel used off-road?
  12. How do I obtain a refund?
  13. How do I obtain additional information?

  1. What is biodiesel?

    Biodiesel is an alternative to petroleum diesel that is made from vegetable oils and animal fats through a process called "trans esterification." Biodiesel may be used as a pure fuel or blended with petroleum and used in any diesel engine with little or no engine modifications. Biodiesel is most often blended with petroleum diesel in ratios of 2 percent (B2), 5 percent (B5), or 20 percent (B20). It can also be used in a more pure biodiesel form (B99 or B100).

  2. What is the classification of biodiesel for Wisconsin fuel tax purpose?

    Biodiesel is classified as a "motor vehicle fuel" for Wisconsin fuel tax purposes. Biodiesel falls under the definition of diesel as "liquid fuel capable of use in discrete form or as a blended component in the operation of diesel-type engines in motor vehicle…"

  3. Are all blends of biodiesel, including B100, subject to the Wisconsin motor vehicle fuel tax and petroleum inspection fee?

    Yes. Sections 78.01 and 168.12, Wis. Stats., impose the tax and fee on all motor vehicle fuel received by a supplier for sale in this state, or for export to this state, unless an exemption applies.

  4. Is recycled vegetable oil the same thing as biodiesel?

    No. Raw vegetable oil does not meet biodiesel specifications and it is not registered with the Environmental Protection Agency as a legal motor fuel. For more information on biodiesel fuel, see the National Biodiesel Board's website at biodiesel.org.

  5. Is recycled vegetable oil and/or straight vegetable oil (SVO) sold or used in powering a motor vehicle subject to Wisconsin motor fuel tax and the petroleum inspection fee?

    Yes. Recycled vegetable oil and/or SVO used to power a motor vehicle are subject to the motor vehicle fuel tax and petroleum inspection fee.

  6. What are the motor fuel tax and petroleum inspection fee rates?

    The Wisconsin excise tax on motor vehicle fuel is 30.9 cents per gallon.

    The petroleum inspection fee is 2 cents per gallon.

  7. Can biodiesel be sold without the motor vehicle fuel tax?

    Biodiesel may be sold without the motor vehicle fuel tax only if it is sold as dyed biodiesel. The sale of clear biodiesel must include the motor vehicle fuel tax.

  8. Do I have to be registered in Wisconsin if I place biodiesel or recycled vegetable oil in a motor vehicle?

    You must be registered if you:

    1. Produce or convert, from another purpose, biodiesel for resale.
    2. Produce or convert, from another purpose, more than 1,000 gallons of renewable fuel within a given year for use in your personal motor vehicle, or
    3. Sell any such renewable fuel during that year.

    To register for a fuel license, complete Form MF-100, Application for Fuel License. This form is located at: revenue.wi.gov/forms/excise/index-f.html.

  9. How do I report the motor vehicle fuel tax and petroleum inspection fee I owe if I am producing and/or selling biodiesel?

    Report the tax and fee on Form MF-002, Wisconsin Combined Monthly Fuel Summary Report, or on the Form MF-017, Wisconsin Blender's Fuel Report. These forms are located at: revenue.wi.gov/forms/excise/index-f.html.

    Example 1: Individual A obtains used vegetable oil from restaurants or purchases SVO. Individual A puts the oil through a filtering process and uses the recycled vegetable oil or SVO in powering Individual A's licensed motor vehicle. Individual A should report and remit the Wisconsin motor vehicle fuel tax on Form MF-017, Column 2, line 2, based on the number of gallons of recycled vegetable oil or SVO placed in the licensed motor vehicle.

    Example 2: Company B obtains used vegetable oil from restaurants. Company B puts the oil through a filtering process and dispenses the recycled oil into Individual A's licensed motor vehicle for powering it. Company B should report and remit the Wisconsin motor vehicle fuel tax and petroleum inspection fee on Form MF-002, based on the number of gallons of recycled vegetable oil dispensed.

    Example 3: Same facts as Example 2, except that rather than dispensing the oil into Individual A's licensed motor vehicle, Company B sells the oil in 55-gallon drums to Individual A. Individual A places the oil from the drum into Individual A's clear diesel fuel bulk storage tank for use in powering Individual A's motor vehicle. Company B should report and remit the Wisconsin motor vehicle fuel tax and petroleum inspection fee on Form MF-002, based on the number of gallons of recycled vegetable oil sold to Individual A.

    Example 4: Farmer C operates a mashing unit to manufacture biodiesel from harvested soybeans. Farmer C uses some of the biodiesel in powering licensed motor vehicles. Farmer C also uses some of the biodiesel in powering farm tractors. Farmer C should report and remit the Wisconsin motor vehicle fuel tax and petroleum inspection fee on Form MF-017, Column 2, line 2, based on the number of gallons of biodiesel placed in the licensed motor vehicles. Farmer C should report on Form MF-017, line 8, the biodiesel used in farm tractors.

  10. When is biodiesel or diesel replacement renewable fuel exempt from the motor vehicle tax?

    Biodiesel fuel is exempt from motor vehicle fuel tax when:

    1. Biodiesel is sold to the United States government or its agencies.
    2. Clear biodiesel is sold to a common carrier for urban mass transportation of passengers.
    3. Clear biodiesel is exported from Wisconsin.
    4. Clear biodiesel is sold as heating oil.
    5. Clear biodiesel is sold for use in trains.
    6. Clear biodiesel is sold to enrolled tribal members living on their own tribe's reservation or trust lands.
    7. Dyed biodiesel is used for off-road purposes.
    8. The first 1,000 gallons of renewable fuel produced or converted from another purpose each year by an individual is used by that individual in their personal motor vehicle, provided the individual does not sell any such renewable fuel during that year.
  11. Can I file a claim for refund for tax paid on biodiesel used off-road?

    Yes. Wisconsin law provides that motor vehicle fuel is not subject to the Wisconsin motor vehicle fuel tax when it is used for off-road purposes in mobile machinery and equipment. Farmers, construction companies, landscapers, and logging operations often have off-road usage of motor vehicle fuel in non-licensed mobile machinery and equipment. Waste management, ready-mix, liquid waste (e.g., septic service), and utility companies have licensed vehicles with power take-off units that share the same fuel supply tank used to power the vehicle. These companies may claim a refund of the motor vehicle fuel tax paid on fuel placed into the vehicles and used by power take-off units.

  12. How do I obtain a refund?

    Users should file Form MF-001, Off-Road Fuel Tax Refund Claim with the Wisconsin Department of Revenue. You may file as many as two claims per month. Claims must be filed within 12 months from the date the fuel is purchased. Each refund claim must be for 100 gallons or more and the fuel must be consumed prior to submitting a claim. Claims may be filed electronically through Online Services or My Tax Account, both are located at revenue.wi.gov.

    Exceptions – Refunds may NOT be claimed on fuel purchased for use in the following vehicles:

    1. Snowmobiles
    2. Recreational motorboats
    3. All-terrain vehicles, unless registered for private use
    4. Aircraft
  13. How do I obtain additional information?

    Forms and publications are available online at revenue.wi.gov.

    To register your business, file tax returns, pay taxes, and claim refunds you may visit the department at:

    Madison Office Location
    2135 Rimrock Road
    Madison, WI 53713

    Mailing Address
    Excise Tax Section 3-107
    Wisconsin Department of Revenue
    P. O. Box 8900
    Madison, WI 53708-8900

    Phone: 608-266-6701
    FAX: 608-261-7049

    Email: excise@revenue.wi.gov

Last updated December 27, 2013