Texas Comptroller of Public Accounts    STAR System


200911559L



November 12, 2009

**************

Dear **************:

Thank you for your message concerning payment of the automotive oil sales fee 
for your company. It was a pleasure to talk to you. I have restated the fact 
situation below, followed by my response.

Your company is a parts/oil distributor and distributes parts, equipment, oil, 
transmission fluid, etc. to lube centers, car dealerships, parts stores, repair 
shops and individuals. The same facility sells more than 25,000 gallons of 
automotive oil a year and is also a used oil collector registered with the 
Texas Commission on Environmental Quality (TCEQ). It is your understanding, 
based on my response in July 2001, that distributors are exempt from not only 
paying the oil fee to vendors but also from collecting the fee from customers, 
therefore not having to file the Texas Automotive Oil Sales Fee report, similar 
but not the same as Wal-Mart, Sam’s or Sears. You asked if your company is 
exempt from these fees and, if so, what information do you need to provide our 
office in lieu of the quarterly reports.

As an automotive oil distributer and registered used oil collection center, 
your company will need to file the automotive sales fee report but may report 
zero as sales.

The automotive oil sales fee law, in Health and Safety Code Section 371.062, 
imposes a fee on the first sale of automotive oil in this state. Subsection 
(a)(2) defines “first sale” to mean the first actual sale of automotive oil 
delivered to a location in this state and sold to a purchaser who is not an 
automotive oil manufacturer or distributor. The term does not include the sale 
of automotive oil:  (1) exported from Texas to a location outside Texas; (2)  
for resale to or use by vessels exclusively engaged in foreign or interstate 
commerce; (3) to a subsequent purchaser who maintains a do-it-yourselfer used 
oil collection center or used oil collection center registered by the 
commission at the location where the automotive oil is changed, used, consumed, 
or resold to do-it-yourselfers; or (4) to the United States.

Subsection 371.062(m) of the law requires an automotive oil distributor to 
obtain a permit. According to Rule 3.701(f)(2), a distributor of automotive oil 
must file a quarterly report even if no tax is due. Your company may report 
zeros on its automotive oil sales fee report for as long as the facility where 
oil is sold is registered with the TCEQ as a used oil collection center. This 
question was also addressed in STAR document 9509L1376F04.

Links to laws, rules and our State Tax Automated Research “STAR” system are on 
our “Automotive Oil Sales Fee” Web page at 
http://window.state.tx.us/taxinfo/auto_oil/index.html.

This opinion is based on the facts presented and current law. Other facts, 
though similar, may result in different answers.

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If you have questions or need more information, please contact me.

Sincerely,


Donald S. Dillard
Oil & Gas, Fuels and Miscellaneous Taxes
Tax Policy Division




From: **************
Sent: Wednesday, November 04, 2009 3:04 PM
To: Donald Dillard
Subject: Automotive oil sales fee

Donald,

My company is a parts/oil distributor in **************. Our facility 
distributes parts, equipment, oil, transmission fluid, etc...to lube centers, 
car dealerships, parts stores, repair shops, and individuals. This same 
facility sells more than 25,000 gallons a year and also performs a service in 
that we are a used oil collector registered with TCEQ. It was my understanding 
years ago based on your response in July of 2001 that distributors such as ours 
are exempt from not only paying the oil fee to our oil vendors but also from 
collecting the fee from our customers, therefore not having to file the Texas 
Automotive oil fee report, similar but not the same as a Walmart, Sams, or 
Sears. Have the laws changed, am I exempt from these fees? If so what 
information do I need to provide to the comptrollers office in lieu of the 
quarterly reports?
 
Thank you,
**************




ACCESSION NUMBER: 200911559L
SUPERSEDED: N
DOCUMENT TYPE: L
DATE: 11/12/2009
TAX TYPE: FEE