Motor Fuel Tax Schedules And Reports Instruction (Page 40 of 43) in pdf

Delivery Errors – Buy-Backs – Adjustments

Delivery errors and buy-backs will be considered on a case-by-case basis. Written documentation

covering the delivery error is required within a reasonable time following the occurrence. Adjusting

entries may be needed on applicable schedules. Or, amended schedules and reports may be needed.

● When adjustments are made to a speciﬁ c transaction during the month of the original transaction,

only the corrected transaction should be reported.

● When adjustments are made one or more months after the original transaction was reported, adjusting

entries reversing the original transaction should be reported on the applicable schedule whenever

possible. This needs to coincide with the month during which the correction between buyer and seller

was actually made.

Pre-Sold Fuel to Consumers

Partial Delivery or No Delivery Made

Sellers need to be consistent in reporting these transactions. Choose one of the two options referred to in

the example below and use that option for all pre-sold gallonage transactions.

OPTION #1:

Your business pre-sold 5,000 gallons of fuel to consumer ABC on July 5, 2005 for delivery in increments

as needed. No delivery is made in July 2005.

● Report the entire 5,000-gallon sale on the applicable schedule type for July 2005.

► When you use this method, you will have an inventory discrepancy.

► Written documentation covering tracking of the discrepancy must be traceable for audit purposes

and must be retained for a period of not less than three years.

OPTION #2:

Your business pre-sold 5,000 gallons of fuel to consumer ABC on July 5, 2005 for delivery in increments

as needed. Deliveries are made as follows: 2,000 gallons in July 2005, 1,000 gallons in August 2005,

1,000 gallons in September 2005, and 1,000 gallons in October 2005.

● Report the 2,000-gallon delivery made in July 2005 as a sale in July 2005.

● Report the 1,000-gallon delivery made in August 2005 as a sale in August 2005.

● Report the 1,000-gallon delivery made in September 2005 as a sale in September 2005.

● Report the 1,000-gallon delivery made in October 2005 as a sale in October 2005.

► When you use this method, your inventories will be accurate; however, you may loose track of

the transactions for purposes of reporting gallons and remitting taxes.

► If using this method, you will need an accurate tracking system to assure that the sales are

reported and taxes remitted when delivery is made.

► These transactions based on delivery must be journalized in an accurate manner to assure proper

reporting and to be traceable for audit purposes.

► This documentation must be retained for a period of not less than three years.

Inventories

Physical inventory readings:

All licensees are required by law to report their actual physical inventory readings for each product for

each month.

“Physical inventory reading” means a measurement of fuel available for distribution in a terminal, an

underground storage tank, an aboveground storage tank, or in a tank wagon, bulk delivery vehicle,

railcar, barrel, drum, or other receptacle.

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Motor Fuel Tax Schedules And Reports Instruction Page 40