Instructions For Form Boe-401-Gs - Fuel Retailers Return (Page 6 of 9) in pdf

BOE-401-GSIN REV. 5 (4-13)

STATE OF CALIFORNIA

BOARD OF EQUALIZATION

Line 2. Diesel Fuel Used in Farming and Food Processing

For additional information for this exemption refer to publication 66, Agricultural Industry and Regulation 1533.2, Diesel

Fuel Used In Farming Activities or Food Processing.

Complete this line to claim a partial tax exemption for the sale, storage, use, or other consumption of diesel fuel used in

farming or food processing activities.

The diesel fuel must be consumed during the activities of a farming business as set forth in Internal Revenue Code (IRC)

263A or food processing. A farming business is a business that grows crops, fruit- or nut-bearing trees, sod, or nursery

plants. Farming activities also include transporting these crops, fruit- or nut-bearing trees, sod, or nursery plants to the

marketplace.

Line 3. Timber Harvesting Equipment and Machinery

For additional information for this exemption refer to Regulation 1534, Timber Harvesting Equipment and Machinery.

Complete this line to claim a partial exemption of the sales and use tax for the sale, use, or other consumption of timber

harvesting equipment, machinery, and their parts. Such equipment and machinery must be designed for use 50 percent

or more of the time off-road in commercial timber harvesting and be used 50 percent or more of the time in timber har

vesting. A qualified person is a person who is engaged in commercial timber harvesting. Commercial timber harvesting

involves the cutting or removal, or both, of timber and other solid wood forest products from timberlands for commercial

purposes. The partial exemption also applies to a qualified person’s lease payments for qualified commercial timber har

vesting equipment and machinery rentals payable on or after September 1, 2001.

Timber is considered to be trees of any species, excluding nursery stock, harvested for for est products. Some examples

of these products include firewood, Christmas trees, biomass, poles and pilings.

Typical off-road commercial harvesting equipment and machinery and their general use, that may be eligible for this par

tial exemption include:

• Tractors or rubber tired skidders—move the logs from the woods to the logging trucks

• Front end loaders—load logs onto trucks

• Feller-bunchers—cut very small trees

• Cable Yarders—harvest trees on very steep slopes by suspending the logs on a cable

• Chippers—chip small logs and brush into very small pieces

• Chainsaws—used to cut down trees

Section D. Partial State Tax Exemption on Motor Vehicle Fuel (MVF)

Effective July 1, 2010, sales of MVF are partially exempt from tax. Since the exemption for the sale of MVF is only a par

tial exemption, a portion of the state sales tax, the local and district taxes still apply. Sellers of MVF must complete this

section on the 401-GS return form.

Note for Tax Recovery Deductions on Sales of MVF

No adjustment is required if you have tax recovery deductions where the MVF was sold prior to 7-1-12 at the full tax rate.

Claiming a tax recovery deduction in Section B. Tax Recovery Adjustment/Deduction provides a full state tax exemption.

However, in order to recover only the partial state tax rate paid on MVF sold prior to 7-1-12, you must also make an

adjustment in Section D, Column A for any tax recovery deductions claimed where the original transaction occurred

prior to July 1, 2011, and was reported as eligible for the partial state tax exemption. If no adjustment is made, tax will

be recovered at the full state tax rate and your return will be underpaid. Making an adjustment in Section D, Column A

for tax recoveries on MVF sales prior to 12-31-12, will allow you to claim your recovery deduction at the rate the original

transaction was taken (sales made between 7-1-11 and 12-31-12).

To make an adjustment for tax recoveries on partially exempt MVF sales where the original transaction occurred

after January 1, 2013, enter the amount in Column B. Column B will provide the adjustment for the Partial State Tax

Exemption on MVF at the current exemption rate. The amount entered must not include sales tax.

If you need assistance in reporting your tax recoveries on MVF sales, please call our Taxpayer Information Section.

Instructions For Form Boe-401-Gs - Fuel Retailers Return Page 6

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