- (1) In accordance with Section 40-17-326(c), Code of Ala. 1975, tax is imposed on the sale or transfer of motor fuelin the bulk transfer/terminal system in Alabama by an Alabamasupplier to a person who does not hold an Alabama supplier’slicense. The supplier shall collect the tax imposed from theperson who orders the sale or transfer in the bulktransfer/terminal system. A bulk transfer/terminal system is amotor fuel distribution system consisting of refineries,pipelines, marine vessels, and terminals approved by theInternal Revenue Service. Motor fuel in a refinery, pipeline,terminal, or marine vessel transporting motor fuel to a refineryor terminal is in the bulk transfer/terminal system provided all operators are licensed and registered as required by theInternal Revenue Service.
- (2) Based upon the definition of bulk transfer/terminal system as provided in Section 40-17-322,pipelines are considered to be a part of the bulktransfer/terminal system. Therefore, a tax-free transaction can only occur in the pipeline if all parties involved in thetransaction have valid Alabama supplier’s licenses. Otherwise,the tax is to be collected from the person ordering the sale ortransfer in the bulk transfer/terminal system.
Author: Bonita Calhoun
Statutory Authority: Code of Ala. 1975, §40-2A-7(a)(5), 40-17-322, 40-17-323, 40-17-326(c).
History: Filed April 29, 1996; effective June 3, 1996. New Rule: Filed June 29, 2012; effective August 3, 2012. Amended: Filed September 12, 2013; effective October 18, 2013.