Pennsylvania Consolidated & Unconsolidated Statutes
Chapter 90 - Liquid Fuels and Fuels Tax
Section 9004.1 - Political subdivision and volunteer service use of tax-free motor fuels

(a) Limitations.--An exempt entity:
(1) May not be a distributor.
(2) May use tax-free motor fuels only for its own official business purposes.
(3) May not sell or deliver tax-free motor fuels to any other person or exempt entity.
(4) May purchase and take delivery of tax-free motor fuels only from a distributor.
(5) Shall cooperate with the department during an investigation or audit related to the use, sale or delivery of tax-free motor fuels provided for in this chapter.
(b) Penalty.--An exempt entity that improperly uses, sells or delivers tax-free motor fuels shall:
(1) Pay the tax imposed under section 9004(b) (relating to imposition of tax, exemptions and deductions).
(2) Pay an additional penalty equal to 100% of the tax imposed under section 9004(b).
(3) Be subject to any other penalty, summary offense or misdemeanor that may be imposed upon distributors who violate the provisions of this chapter.
(c) Exempt entity use of commingled tax-free motor fuels.--An exempt entity may withdraw tax-free motor fuels from a bulk storage tank containing only commingled tax-free motor fuels if the following apply:
(1) The bulk storage tank is located on property owned by one of the exempt entities that owns tax-free motor fuels placed into the tank and the exempt entity owning the property is the owner of the bulk storage tank.
(2) Each exempt entity commingling tax-free motor fuels in the bulk storage tank contracts separately with a distributor for purchase and delivery of tax-free motor fuels placed into the tank.
(3) Each exempt entity owning tax-free motor fuels in the bulk storage tank enters into an agreement with the exempt entity that owns the bulk storage tank and the agreement includes provisions pertaining to:
(i) purchase from distributors of tax-free motor fuels placed into the bulk storage tank;
(ii) method of delivery of tax-free motor fuels into the bulk storage tank;
(iii) controls and security procedures for the removal of tax-free motor fuels from the bulk storage tank by the volunteer service;
(iv) storage of tax-free motor fuels in the bulk storage tank;
(v) removal of tax-free motor fuels from the bulk storage tank;
(vi) compliance with all of the recordkeeping requirements for liquid fuels and fuels as provided under this chapter; and
(vii) acknowledgment of joint and several liability for loss, misuse or undocumented withdrawals of tax-free motor fuels from the bulk storage tank.
(4) The exempt entity does not withdraw from the bulk storage tank any amount of commingled tax-free motor fuels for which the exempt entity has not previously paid a distributor to deliver into the tank, except as provided for volunteer services under subsection (d).
(5) Tax-paid motor fuels are not placed into a bulk storage tank containing commingled tax-free motor fuels.
(6) Only exempt entities may own tax-free motor fuels placed into or removed from the bulk storage tank containing commingled tax-free motor fuels.
(7) All of the recordkeeping compliance provisions of this chapter are satisfied by each entity owning commingled tax-free motor fuels in the bulk storage tank.
(d) Conditions on use of motor fuels transferred to volunteer services from political subdivisions.--A volunteer service may use tax-free motor fuels transferred to the volunteer service from a political subdivision if the following apply:
(1) The political subdivision's bulk storage tank from which the volunteer service removes tax-free motor fuels contains only tax-free motor fuels that are either owned exclusively by the political subdivision or owned by both the political subdivision and one or more volunteer services pursuant to a valid commingling agreement as provided for under subsection (c)(3).
(2) The volunteer service provides services to the political subdivision and the residents of the political subdivision.
(3) The volunteer service takes delivery of the motor fuel directly from a bulk storage tank owned by the political subdivision.
(4) Tax-free motor fuels withdrawn from the political subdivision's bulk storage tank by a volunteer service must be placed directly into the vehicle propulsion tank of a vehicle owned and operated by the volunteer service.
(e) Definitions.--The following words and phrases when used in this section shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:
"Exempt entity." A political subdivision or volunteer service in accordance with section 9004(e).
"Motor fuels." Liquid fuels or fuels. The term does not include alternative fuels.
"Political subdivision." A county, city, borough, incorporated town, township, school district, vocational school district or county institution district.
"Tax-free motor fuels." Motor fuels upon which the oil company franchise tax under 9004(b) has not been imposed.
"Volunteer service." A volunteer fire company, volunteer ambulance service or volunteer rescue squad.
(Nov. 25, 2020, P.L.1242, No.129, eff. imd.)

2020 Amendment. Act 129 added section 9004.1.