Fuel Tax | Licensing

Licensing Requirements

Distributors, Common Carrier, and Terminal Operators are required to be licensed. See below for more information.

Distributor

A distributor is required to have additional licensing for any of the following activities: 

  • Importer: Imports gasoline or special fuel by bulk transfer or by truck or rail transport load into this state from another state by truck, rail, or pipeline.
  • Exporter: Acquires fuel in this state and delivers it to another state 
  • Blender: Any person who produces blended gasoline or blended special fuel outside of the bulk transfer and terminal system.
  • Supplier: Owns and stores gasoline or special fuel in a pipeline terminal, terminal, or refinery.

Common Carrier

Any carrier who transports fuel that they do not own must be licensed as a common carrier. A person, including a railroad operator, who transports gasoline or special fuel from a terminal located in this state or transports gasoline or special fuel imported into this state and who does not own the gasoline or special fuel but does not include transportation by bulk transfer. 

Terminal Operator

Terminal Operators must be licensed in Colorado and provide their IRS terminal code. A fuel license is location-specific. Each fuel license must be posted at the location of the business to which it applies. Third-party terminal operators are required to report transactions for receipts to the terminal by position holder, disbursements from the rack by position holder, and provide an inventory by position holder. The report is not a tax report, it rather provides accountability for fuel products moving through the terminal. 

How to Apply for a License

Information needed to complete an application:

  • Business Information; including business locations, fuel types, activity, and gallons capability.
  • Terminal Operators should have their IRS Terminal code
  • Corporation information; including stock, corporate officers, and ownership for equity owners with at least 10% ownership interest.
  • Banking information for payment of the $10 application fee and $5.00 per location fee.

Forms that must be submitted:

  • Proof of FEIN/SSN: typically IRS form CP575 or IRS LTR 147C.
  • Imports & Exports: Copies of licenses from other states.
  • Blender and Supplier applicants: copy of IRS Letter of Registration, Letter 3689.

On the Revenue Online homepage, go to the “Sales Tax License” panel and select “Fuel Excise License Registration.” The review, processing, and issuance of your license can take up to four to six weeks, so please plan accordingly to have a valid license when you start your fuel business.

Penalties for Operating Without a License

Any entity operating without a license is subject to civil penalties in the amount of a $5,000 fine for the first offense, $10,000 for the second offense, and $15,000 for the third or subsequent violation.

Change in Business Operations

Currently licensed distributors who want to perform any activity other than what they are currently licensed for must submit an amended application to obtain a license for the other activities. For example, if one is currently licensed as a distributor and intends to import fuel into Colorado, an application requesting an importer license is required before the distributor is licensed to import fuel into Colorado.

How to Update Your Fuel Tax Registration

From your Fuel Distributor account in Revenue Online, go to the “Additional Actions” panel. Then select “Amend Fuel License Registration” and then "Amend Fuel Excise License Registration."  

Business Closures

The Colorado Fuel Distributor License is perpetual until notification from the taxpayer is received by the Department of Revenue. Any person who ceases to be a distributor, supplier, importer, exporter, blender, or carrier must notify the Department of Revenue in writing of the discontinuance, sale, or transfer at the time it takes place. All licenses need to be surrendered to the Department at that time.

After the license has been canceled by the Department, the taxpayer must make sure that all monthly fuel tax filings, up to the period in which the account was closed, are completed with correct payments of all fuel tax liabilities.

How to Close Your Account

In order for the Department to close a fuel distributor license, the following steps must be taken. From your Fuel Distributor account in Revenue Online, go to the “Additional Actions” panel and select “cease account” and follow the steps.

Changes in Ownership

Any person acquiring a 10% equity holding in a company or any change in ownership or equity within a 12 month period must report the change to the Department of Revenue within 30 days. If the change in ownership requires a new federal identification number (FEIN), a new application must be submitted.

How to Change Ownership in Your Account

For a change of ownership (other than stocks of a publicly-traded company), an amended application must be submitted through Revenue Online. To do this, go to the “Amended Fuel License Registration” in the “Additional Actions” panel.