Fuel Tax Refund??????

Discussion in 'Lawn Mowing' started by eggy, Feb 8, 2001.

  1. eggy

    eggy LawnSite Senior Member
    Posts: 954

    Hey guys, I had heard of course this is rumor only, that since we use our mowing equipment off road that we can get a refund of the 18.4cents fed tax and the 15.6cents state tax that is applied in Indiana. Just doing my taxes and it looks like uncle sam is going to take more then I predicted again this year. Anybody know of this? I will check with my cpa also. Thanks,eggy.
     
  2. Barkleymut

    Barkleymut LawnSite Bronze Member
    Posts: 1,117

    It's true, talk to your CPA for the rates in your state. Everyone should be taking advantage of this, it will save you at least a couple hundred maybe up to $500.
     
  3. CCLC

    CCLC LawnSite Senior Member
    Posts: 261

    I have often wondered about this also but have never done any research on it. Next week I will do some snooping around and see what I can find.
     
  4. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    You can take a federal credit on your tax return for the tax paid on fuel used off-road in equipment; use form 4136.
    You can get an IN state refund of fuel taxes paid for business off road equipment use (sorry, no home lawnmower refunds) by using state form GR-4136. You need to send original copies of an acceptable (see rules for GR-4136) receipt, and credits can be claimed for purchases up to three years old at time of filing.
    For procedures in other states, check with your own state revenue office.
     
  5. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    As far as I know, in CT you cannot claim a refund of tax paid, if you dont want to pay the tax you must buy it from bulk supplier tax exempt ahead of time. Please correct me on this if you know it to be wrong. As for Form 4136(?) I have been claiming the tax credit ever since I started, but dont forget to include the amount of last years tax return credit you claimed on Schedule C line 6. For example, on your 1999 return you had a credit of 200 on form 4136, on your 2000 form 1040 schedule C line 6 you must claim the credit as business income.

    This is a big "gotcha" as penalties and interest more than eat up any savings if you blow it off.
     
  6. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    Very good point, Bill. Also need to include state fuel refund on same line 6.
     
  7. Vandora Lawn & Landscape

    Vandora Lawn & Landscape LawnSite Senior Member
    Posts: 386

    Are you sure your refund is taxable?
     
  8. eggy

    eggy LawnSite Senior Member
    Posts: 954

    Thanks for the help guys, I didnt have a chance to talk to my cpa today...The refund that we have to show next year sounds odd. It would be like taxing a tax refund....
     
  9. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    The instructions for line 6, Schedule C, are specific about fuel tax credits/refunds, at least they were in the past. Since you claimed all the gas cost used in 2000 on your 2000 Sch C as a business expense, the credit you get in Jan - Apr, 2001, when you file 2000 taxes, is treated as income in 2001. Same treatment for state tax refund or credit during year.
     
  10. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    You still come out ahead; the amount from 4136 reduces your tax liability dollar for dollar, while the amount on sch c line 6 only adds whatever percentage tax bracket you are in, of that amount (from last year).

    Yes it is in the sch C instructions as well as the 4136 instructions.
     

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