Diesel Fuel Tax & Refunds

Vermont diesel fuel tax applies to all clear diesel.

Vermont diesel fuel tax does not apply to dyed diesel. Dyed diesel is colored red and has either a high or low sulfur content.

  • High Sulfur dyed diesel may be used only in unregistered equipment, stationary engines, tractors, etc. EPA regulations prohibit its use in motor vehicles.
  • Low Sulfur dyed diesel may be used in stationary engines, tractors, equipment and other vehicles that are not required to be registered. It may also be used in vehicles operated exclusively by state and local Governments.

Diesel in Storage Tanks:

If you have only one diesel storage tank and use the fuel in both taxable and nontaxable ways, you must buy taxed clear diesel. When you use tax-paid diesel fuel in nontaxable ways, you may apply for a tax refund by filing the Vermont Diesel Fuel Refund Application. Records must be maintained for 4 years indicating the number of gallons withdrawn from the tank and put into each vehicle or piece of equipment.

Sales tax on dyed diesel:

Vermont requires a use tax be paid on dyed diesel unless the sale is for propulsion use. If you have any questions please call Commercial Vehicle Operations at 802-828-2070

Vermont Diesel Fuel Refunds

You may claim a refund of the Vermont diesel tax (and Motor Fuel Transportation Infrastructure Assessment fee) if:

  • You have fuel receipts indicating the state tax was paid, and
  • You use the fuel in a nontaxable manner, such as to operate:
    • A stationary engine
    • A refrigeration unit with a separate fuel tank
    • A furnace or other device to heat a building or structure
    • Off-road use

You may NOT claim a refund for fuel used in a licensed motor vehicle that is operated on a Vermont road or highway that is open to the public.

To claim a refund:

  • Complete the Vermont Diesel Fuel Refund Application
  • Include legible copies of fuel invoices indicating the Vermont state tax was paid
  • Invoices must be legible and include the following
    • Distributors name and address
    • Date of purchase
    • Number of gallons purchased
    • Total sale amount
    • Price per gallon
  • Mail the completed application to:
    Commercial Vehicle Operations
    120 State Street
    Montpelier, VT 05603

When you claim your diesel tax refund, you may owe Vermont sales tax. This requires that you must be registered with the Vermont Department of Taxes. For additional information please contact Tax Payer Services at 802-828-2551.

Related Forms & Information

Contact Us

Vermont Department of Motor Vehicles
120 State Street
Montpelier, VT 05603-0001

Monday-Friday: 7:45am-4:30pm
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