Motor Fuel Excise Taxes
South Dakota’s 8,000-mile network of highways and airport runways are essential to the state’s economy and its citizen’s quality of life. Fuel taxes are used to fund the maintenance and construction of these highways, bridges, and airport runways.
What is the Motor Fuel Tax?
A fuel excise tax on motor fuel, special fuel, aviation fuel and alternative fuels used to propel a motor vehicle.
Who Needs a Motor Fuel License?
Any business buying, selling, storing or transporting fuel in South Dakota. A business may need to hold one or more fuel tax licenses depending on the kind of business conducted. Each license type grants certain privileges and carries specific responsibilities. Learn more in the Motor Fuel Manual (PDF).
There are several motor fuel licenses:
- Biodiesel Producer: Person who engages in the business of producing biodiesel for sale, use, or distribution.
- Blender: Person engaged in the activity of making Biodiesel blends.
- Bulk Plant Operator: Person who has responsibility and physical control over the operation of a bulk plant.
- Compressed Natural Gas (CNG) Vendor: Person engaged in the business of selling compressed natural gas for use in the engine fuel supply tanks of motor vehicles and is regulated by the Public Utilities Commission.
- Ethanol Broker: Person engaged in the business of marketing ethyl alcohol produced by ethanol producers located in South Dakota.
- Ethanol Producer: Person engaged in the business of producing ethyl alcohol for sale, use, or distribution.
- Highway Contractor: Person engaged in the activity of highway construction work in South Dakota. The term does not include any person who only owns and operates motor vehicles within the right-of-way hauling gravel or concrete and does not own or operate off-road machinery in the highway construction work.
- Importer/Exporter: Person who purchases or owns motor fuel or special fuel in another state or country and transports or delivers or causes the fuel to be transported or delivered into South Dakota by any means other than a pipeline.
- Liquid Natural Gas (LNG) Vendor: Person engaged in the business of selling liquid natural gas for use in the engine fuel supply tanks of motor vehicles.
- Liquid Petroleum Gas (LPG) User: Person using liquid petroleum gas in the engine fuel supply tank of a motor vehicle and wishes to purchase liquid petroleum gas in bulk into a storage tank which has a delivery hose attached to tank on a tax unpaid basis in South Dakota.
- Liquid Petroleum Gas (LPG) Vendor: Person engaged in the business of selling liquid petroleum gas for use in the engine fuel supply tank of a motor vehicle.
- Marketer: Person engaged in business as a wholesale distributor or retail dealer.
- Supplier: Person that owns motor fuel or special fuel in the pipeline and terminal distribution system in South Dakota or makes sales or authorizes the removal of this fuel from the terminal at the rack. They are also the person who owns fuel in the pipeline immediately before it is withdrawn at the terminal rack.
- Tribal Marketer: Person engaged in the wholesale or retail sale of motor fuel or special fuel on Indian reservations and/or in Indian country that have tax agreements with the State of South Dakota and the Department of Revenue.
- Terminal Operator: Person who by ownership or contractual agreement is charged with the responsibility and physical control over the operation of the terminal.
- Transporter: Person engaged in the activity of interstate or intrastate movement of fuel within South Dakota by transport truck, rail car, or by any other means in quantities of over 4,200 gallons.
Any person engaged in highway construction work in this state is required to obtain a Highway Contractor License. Highway construction work is defined as, “all work which is performed in any capacity to propel vehicles, machinery, or equipment within the right-of-way in the construction, reconstruction, repair, or maintenance of public roads & highways.”
Highway Contractors are required to file a quarterly paper tax return that contains information for the three preceding months. Returns and any fuel tax payment due must be filed and remitted on or before the twentieth day of the month following each quarterly period. A bidder must be licensed as a Highway Contractor to obtain a public highway or street contract awarded by the State of South Dakota, or by a county, a township or a municipality within the state. If you are applying for a Highway Contractor’s license you must also apply for a Contractor’s Excise Tax license.
Motor Fuel Filing Dates & Guides
Return and payment due dates vary depending on your license type. Please refer to the guide below for filing dates and guides.
|License Type||Frequency||Return Due Date||Payment Due Date||Filing Guides|
|Bulk Plant Operator||N/A||N/A||N/A||N/A|
If you have been approved to file paper returns you are required to file your tax return and payment by the 20th of the month in which the return is due.
If you have questions on filing returns electronically, submitting a payment, or need a template for uploading, click here to get the information you need.
Other Motor Fuel Tax Resources
- Schedule of Tribal Sales (PDF)
- Summary of Amending Motor Fuel Tax Returns (PDF)
- Uniform Schedule of Disbursements (PDF)
- Uniform Schedule of Receipts (PDF)
- Affidavit of Loss of Taxable Fuel (PDF)
Motor Fuel Tax Online Forms
- Blender Affidavit
- Change of Address
- Designate Power of Attorney
- Affidavit of Bad Debt Loss—Marketer
- Affidavit of Bad Debt Loss-Supplier
- Accidental Mixing Affidavit
- Affidavit of Inspection of LPG Bulk Tank
- Affidavit of Sale of Undyed Diesel Fuel as Heating Oil
- Motor Fuel Exemption/Indian Tribe School License
Everything a business needs to know about the motor fuel tax system.
|Type||FTA Product Code||Price|
|Undyed Diesel Fuel||160||.28|
|Liquid Petroleum Gas (LPG)||054||.20|
|Compressed Natural Gas||224||.10|
|Aviation Gas (AVGAS)||125||.06|
|Tank Inspection Fee||.02|
- Depending on what the dyed fuel is being used for will determine the tax rate that is paid.
- State Sales Tax plus applicable municipal sales tax applies to the selling price of dyed fuel when it is. Dyed fuels subject to sales tax are:
- 072 Dyed Kerosene
- 171 Dyed Biodiesel Blends
- 228 Dyed Diesel Fuel
- 290 Dyed Biodiesel
- Dyed Diesel may be purchased tax exempt if it is for Agriculture use.
- Dyed diesel is sales taxable for use other than agriculture.
Both state and federal law require that most owners of petroleum storage tanks be able to demonstrate financial responsibility for pollution cleanup and third-party liability. The United States Environmental Protection Agency (EPA) has approved the South Dakota Petroleum Release Compensation Fund (PRCF) as an acceptable mechanism for tank owners to demonstrate financial responsibility for corrective action and third-party compensation. PRCF revenues are generated by a two cents per gallon tank inspection fee on petroleum products received, shipped and stored in the state. This fund is used for the clean-up of petroleum spills. Please refer to SDCL 34A-13-20 and Administrative Rule 74:32:02:01 for further information about the Tank Inspection Fee.
- There are a number of motor fuel licenses: Terminal Operator, Supplier, Importer/Exporter, Transporter, Bulk Plant Operator, Ethanol Producer, Blender, Marketer, Tribal Marketer, CNG Vendor, LNG Vendor, LPG Vendor, LPG User, and Highway Contractor. Depending on the type of business you are conducting will determine what licenses you will need for your business.
- Each license grants certain privileges and carries specific responsibilities. An individual or business may hold one or several licenses depending on the business transacted. For more information regarding each license type please refer to the Licenses-Tax Returns section of the Motor Fuel Manual.
No fees are charged for Motor Fuel licenses and there are no bonding requirements (except for individuals who are delinquent in reporting and remitting fuel tax, and to reinstate a revoked license).
A separate license is required for each type of business and for each location in the case of multiple sites.
The secretary may refuse to issue or renew a license for any of the following reason:
- The application is filed by a person whose license has been canceled for cause by the Secretary;
- The applicant has made false or misleading statements in the application;
- The application is filed by a person as a subterfuge for another person whose license has been canceled for cause by the Secretary;
- At the time of application for license renewal, the person is found to have been delinquent in the filing of tax returns or the payment of taxes two or more times during the preceding license year; or
- The applicant was convicted of a crime involving fuel tax or owes fuel tax, penalty, or interest to South Dakota or another state.
You must notify the Department of Revenue when your business has any changes to its name, address, contact information. You can notify the department by sending a letter signed by an owner or officer we have on file for your company.
- In situations where your business changes ownership please contact the Department of Revenue for information on what to do.
- Please call Alyssa Hudecek at (605) 773-8178.
- If your business ceases operating you may either cancel your licenses online or notify the Department of Revenue by completing the Request to Cancel Motor Fuel License(s) form or by sending a letter signed by an owner or officer we have on file for your company.
- If a business changes its name, address, or contact officer a written notice must be submitted to the Department with the updated information.
All records must be preserved for the current year and the three preceding calendar years.
Yes, South Dakota motor fuel tax returns are due for every tax period, even if you did not have any activity during that period.
The filing or payment is due the next business day when a filing or payment due date falls on a Saturday, Sunday, or legal holiday.
|10/21/2019||September - Return Due Date|
|11/20/2019||October - Return Due Date|
|12/20/2019||November - Return Due Date|
|02/21/2020||December - Return Due Date|
Yes, gallons need to be rounded to the nearest whole gallon. For example if 125.78 gallons of alcohol were sold you would round the number to 126.
The following are exempt from fuel excise tax:
- Motor fuel or undyed special fuel removed from a terminal in this state at the rack by the federal government or defense fuel supply center for consumption in any federal government motor vehicle, machinery, equipment, or aircraft.
- Motor fuel or undyed special fuel imported into this state by the federal government or defense supply center for consumption in any federal government motor vehicle, machinery, equipment, or aircraft.
- Trans-mix removed from a terminal in this state at the rack by the terminal operator and transferred to another terminal, or to a licensed supplier for refinement and re-introduction into the pipeline system.
- Undyed special fuel removed from a terminal in this state at the rack delivered directly into a railroad locomotive if the railroad company is also the supplier.
- Motor fuel or undyed special fuel removed from a terminal in this state by an electrical power company of cooperative and directly used for the generation of electricity.
- Motor fuel or special fuel transfers in bulk by pipeline into a terminal or in bulk by pipeline within a terminal. This subdivision does not apply to any transfers for ethyl alcohol or methyl alcohol into a terminal or within a terminal. The subsequent removal of the fuel from the terminal is not exempt from tax.
Any business or person may collect a refund of fuel excise taxes paid when undyed fuel that is accidentally mixed with clear fuel. However, to qualify for this refund, the amount of undyed fuel accidentally mixed must exceed 500 gallons. The claimant must notify the Department of Revenue within five days of the accidental mixture and complete the Affidavit of Accidental Mixing of Undyed Fuel with Dyed Fuel.