§ 3003. Imposition of tax; exceptions

(a) A tax of $0.28, a fee of $0.01 established pursuant to the provisions of 10 V.S.A. § 1942, and a $0.03 motor fuel transportation infrastructure assessment which for purposes of the International Fuel Tax Agreement only shall be deemed to be a surcharge, are imposed on each gallon of fuel:

(1) sold or delivered by a distributor; or

(2) used by a user.

(b) Collection of the tax and its payment to the State shall be as follows:

(1) The distributor shall collect the tax from a dealer or user on delivery of fuel into the dealer's or user's bulk tanks. The tax shall attach at the time of delivery into the bulk tank. When a distributor collects a tax from a dealer or user, the distributor shall pay the same to the Commissioner with the monthly report required by section 3014 of this title.

(2) A user who uses fuel shall pay the tax to the Commissioner as provided in section 3015 of this title. The tax shall attach at the time of the consumption of such fuel in the propulsion of a motor vehicle upon the highways of the State.

(c) A tax of three cents per gallon is imposed on each gallon of railroad fuel used in the State.

(d)(1) For users, the following uses shall be exempt from the tax and motor fuel transportation infrastructure assessment imposed under this chapter and be entitled to a credit for any tax paid for such uses under section 3020 of this title:

(A) uses, the taxation of which would be precluded by the laws and Constitution of the United States and this State;

(B) uses for agricultural purposes not conducted on the highways of the State;

(C) uses by any State, municipal, school district, fire district, or other governmentally owned vehicles for official purposes;

(D) uses by any vehicle off the highways of the State; and

(E) uses by any vehicle registered as a farm truck under subsection 367(f) of this title.

(2) Provided, however, that no tax shall be due with respect to fuel for use in any State, municipal, school district, fire district, nonprofit public transit system as defined in 24 V.S.A. § 5088(3), or other vehicle owned, leased, or contracted for other than single-trip use by a government entity, as long as the distributor takes from the purchaser at the time of sale an exemption certificate in the form prescribed by the Commissioner; and provided, further, that no tax shall be due with respect to fuel delivered for farm use to a farm bulk fuel storage tank.

(e) A distributor may use as the measure of the tax so levied and assessed the gross quantity of diesel fuel purchased, imported, produced, refined, manufactured, and compounded by the distributor, instead of the quantity sold, distributed, or used. (Added 1981, No. 172 (Adj. Sess.), § 1; amended 1983, No. 107 (Adj. Sess.) eff. Feb. 29, 1984; 1985, No. 147 (Adj. Sess.), § 1; 1987, No. 282 (Adj. Sess.), § 6, eff. April 1, 1989; 1989, No. 51, § 2, eff. June 1, 1989; 1993, No. 65, § 1; 1999, No. 154 (Adj. Sess.), § 2; 2009, No. 50, §§ 22, 23, eff. Oct. 1, 2009; § 77, eff. July 1, 2010; 2013, No. 12, § 21; 2013, No. 12, § 22, eff. July 1, 2014; 2015, No. 159 (Adj. Sess.), § 1, eff. June 1, 2016; 2015, No. 159 (Adj. Sess.), § 1a, eff. June 1, 2017.)