OAR 735-170-0100: Fuel Lost or Destroyed — Tax Exemption Requirements

The following requirements are for claims by Oregon licensed dealers for exemption from the Oregon tax on motor vehicle fuel or aircraft fuel lost or destroyed through transportation and other mishaps prior to the time title to the product passes from the licensed dealer: (1) Motor vehicle fuel or aircraft fuel lost by a carrier or other person in this state must be included in the taxable distribution section of the monthly tax report. When a carrier or person responsible for lost motor vehicle or aircraft fuel furnishes acceptable documentation of actual loss, credit for the Oregon tax may be taken. Acceptable documentation of the loss, as described in section (2) of this rule, must be submitted to the Department for approval. After approval by the Department, the documents must be filed with the accounting records in the dealer’s office where the tax audit is to be made. Credits for approved losses must be reported as prescribed by the Department. (2) Acceptable documentary proof of loss will include the following: (a) A signed statement by the driver of the vehicle, or some person having actual knowledge of the loss, stating: (A) The circumstances surrounding the accident or mishap; (B) The total quantity of fuel shipped; (C) The quantity of fuel actually lost or destroyed; (D) The quantity of fuel salvaged; (E) The disposition of the salvaged fuel; and (F) The procedure used in the determination of the exact quantity of fuel lost or destroyed. (b) A certified copy of the carrier’s settlement of claim against the insurance company, if the loss is occasioned by a for-hire or other insured carrier. The details required by subsection (2)(a) of this rule must be supplied; or (c) A signed statement by a State Police officer or other person witnessing the accident or mishap, that: (A) Sets out the details of the accident; and (B) States the quantity of fuel actually lost as nearly as can be determined by the officer or other person. The details required by subsection (2)(a) of this rule must be supplied. (3) Losses that occur through accident or mishap to the dealer’s own equipment must be supported by a signed statement made by the driver of the vehicle or person directly in charge of the equipment at the time of the accident. The statement must include the details required by subsection (2)(a) of this rule. This statement must be filed in the dealer’s office where the tax audit is to be made. (4) A tax exemption cannot be allowed when motor vehicle fuel is lost under the following conditions: (a) Fuel lost from storage tanks that are directly connected by means of a pipe line to retail service station pumps, or fuel that the licensed dealer no longer retains complete control over; or (b) Fuel claimed to have been lost from spillage, leaky valves, loose connections, unloading mishaps, leaky or defective storage tanks, or similar circumstances, where the nature of the loss is such that it cannot be positively established that an actual loss did occur and the exact quantity cannot be determined. (5) In all cases where employers, agents, carriers, or other persons fail to account satisfactorily or completely for motor vehicle fuel and are charged by the dealer with the value of the product, such transactions must be included in the computation of the license tax.