Colorado allows a refund of fuel tax paid for gasoline, aviation fuel, and special fuels. The allowance of the refund depends on how the fuel is used, the type of fuel, and if and when the fuel excise tax was paid. A Fuel Tax Refund Claim for Exempt Use of Fuel (DR 7118) will be mailed for each calendar quarter, the month following the reporting quarter.
For example, a claim form for April through June will be mailed in early July. The refund claim form is pre-printed with your name, account number, the quarterly filing period, and the pre-approved industry percentage. This is the only percentage that will be allowed for use to calculate your fuel tax refund.
When submitting a fuel tax refund claim, you may file only once per quarter.However, you are not required to file a claim each quarter if no exempt purchases were made in the quarter. Fuel purchases claimed must be filed no later than 12 months from the date of purchase. Any claim for refund for purchases exceeding the 12-month statute of limitations will be denied.
Refunds are not allowed on purchases of fuel in quantities of less than 20 gallons, unless included with a refund claim on which the total refundable gallons exceed 20 gallons. This limitation does not apply to governmental agencies or political subdivisions.
The Fuel Tax Refund Claim (DR 7118) may be submitted without fuel purchase invoices. However, these invoices must be retained for a period of three years from the date of purchase or the date of the refund claim filing, whichever is later. The invoices must be made available upon request by the Colorado Department of Revenue. Invoices must show the following information:
- Dealer's name and address, and address of delivery.
- Purchaser's name and address.
- Correct date of sale and delivery, month, day, and year.
- The kind and quantity of fuel sold.
- Price per gallon of fuel, the total amount of Colorado tax and total amount paid.
- Notation showing payment and signature of dealer.
Electronic invoices are acceptable if the information items (above) are included on the electronic invoice. Fuel purchases must support exempt and non-exempt fuel usage of the account's vehicles and equipment. If your fuel purchase invoices do not meet the specific requirements and you are audited, your claims will be disallowed and your permit/account can be closed.
Allow four to five weeks for the processing of your refund claim. For refund inquiries have your permit/account number, FEIN or Social Security number, the type of fuel claimed, gallons, and amount of your claim readily available.
If you are an IFTA licensee and you are approved for a fuel tax refund permit, you will receive two pre-printed refund claim forms each quarter.
- One claim form is to be used for filing non-IFTA exempt fuel tax refund requests.
- The second claim form is to be used for filing exempt fuel refund requests associated with the taxpayer's IFTA vehicles. You must attach a copy of the IFTA tax report filed for the corresponding calendar quarter to this claim form.
The tax credit is reported on the IFTA Tax Report each filing period and is part of the tax return. If you receive a bill for the penalty on filing past the due date and you pay the penalty then you later protest the billing notice, and the department waives the penalty, use the Claim for Refund (DR 0137) to receive a refund of the penalty you paid.