IMPORTANT NOTICE
PREMIUMS ON OIL CHANGES IS AMENDED TO INCLUDE PREPACKAGED OIL
AND BULK MOTOR VEHICLE OIL
Recent legislation expands the premium imposed on motor vehicle oil sold or distributed by motor vehicle oil dealers in the State to pre-packaged motor vehicle oil. A premium of 35 ¢ per gallon is effective on October 1, 2009.
The premium on prepackaged motor vehicle oil not only applies to crankcase oil but also to transmission, gear box, hydraulic and differential fluids/oils. The premium on bulk motor vehicle oil continues to apply only to crankcase motor oil.
The bulk motor vehicle oil premium became effective August 1, 2008 and was imposed at $1.10 per gallon for gasoline engine bulk motor vehicle oils and 35¢ per gallon for diesel engine bulk motor vehicle oils sold or distributed in the State.
Both the pre-packaged and bulk premiums are imposed on the “motor vehicle oil dealer that makes the first sale or distribution of bulk motor vehicle oil in the State”. The statute provides no exemptions based on who the purchaser or end user is nor with respect to what the purchaser or end user will do with the oil. If you are adding sales tax to the invoice of a customer, the sales tax applies to the entire sales price including the premium.
If you are engaged in selling or distributing motor vehicle oil as defined above, the premium must be collected and remitted to the State Tax Assessor. The premiums will continue to be reported on line 14A of the sales tax return (Form ST-7).
A number of retailers continue to incorrectly charge their customers the $1, $2 or $3 oil change fee that had been in place from October 1, 2007 thru August 1, 2008. Retailers are reminded that these fees have not been in place since August 1, 2008 and are advised to discontinue this erroneous collection. Current premiums are imbedded in the cost of the oil purchased by the retailer from their vendors and is not imposed on the ultimate consumers.
The statute provides the following definitions:
“Bulk motor vehicle oil” means all motor vehicle oil other than prepackaged motor vehicle oil.
“Prepackaged motor vehicle oil” means motor vehicle oil sold in a container with a volume not in excess of 5 gallons.
“Motor vehicle oil” means any lubricating oil that is reclaimable and classified for use in an internal combustion engine or the transmission, gear box, hydraulic reservoir or differential for a motor vehicle, including but not limited to natural, synthetic, and rerefined motor oils, whether or not in retail containers.
“Motor vehicle oil dealer” means any person, firm, or corporation engaged in the business of producing, packaging, or otherwise preparing motor vehicle oil for market, or selling, or distributing motor vehicle oil.
For more information on this topic, please contact the Sales, Fuel and Special Tax Division at (207) 624-9693 or email us at sales.tax@maine.gov.
