The State of California collects a prepayment of a portion of the sales tax (imposed on a per gallon basis) from wholesalers and suppliers of gasoline, gasohol, diesel (including dyed), and aircraft jet fuel, and this prepaid sales tax is passed down the supply distribution chain. California participants who have prepaid the sales tax to their suppliers are entitled to claim a credit for the prepaid tax when they file their sales and use tax return. California participants are required to have an “SG” permit from the California State Board of Equalization.
As a California participant, your sales to other California fuel distributors through a Cardlock network are considered sales for resale and should be reported on your “SG” and your regular sales and use tax return. For these transactions, CFN will collect and switch the CA Prepay Tax. Under CA Revenue and Taxation Code section 6007, if the other fuel distributor is located out-of-state and not required to have a California seller’s permit, you are making a retail sale that should be reported on your “SG” and regular sales and use tax return. For these transactions, CFN will collect and switch the Sales Tax.
In summary, when a foreign transaction occurs at your CA site, you are reimbursed (via CFN) differently depending on whether the card issuing Participant whose customer is fueling at your site is based in California or outside of California.
• If IN California, you are reimbursed:
CFN BASE PRICE (OPIS + Haul + Fee) + Federal Excise Tax + Federal Environmental Tax + CA State Excise Tax + CA State Environmental Tax + CA Prepay sales Tax.
• If OUTSIDE California, you are reimbursed:
CFN BASE PRICE (OPIS + Haul + Fee) + Federal Excise Tax + Federal Environmental Tax + State Excise Tax + State Environmental Tax + Local Tax + Sales Taxes.
You must file the appropriate forms and submit the appropriate taxes.
The California Sales Tax is a percentage tax that is calculated differently for gasoline and diesel.
For gasoline, sales tax is calculated by multiplying the percentage tax by the sum of:
Base price + federal gas excise tax + state gas excise tax + markup + federal environmental tax + state environmental tax.
For diesel, sales tax is calculated by multiplying the percentage tax by the sum of:
Base price + markup + federal diesel excise tax + federal environmental tax + state environmental tax.
Note that state diesel excise tax is excluded.