The 2017 Montana legislature passed House Bill 466 which makes DIESEL purchased at the pump (within 50 miles of applicant’s agricultural operation) with a credit or debit card, eligible for a partial refund of the Montana tax to persons qualified for the refund based on agricultural use. Because the refund application requires you to submit the original of the purchase, you will need to keep the receipt you print out from the pump. Keeping the receipt will be a bit of a hassle, but will make a big difference on your refund.
MCA 15-70-430 allows an estimated (standard deduction) amount of fuel eligible for refund based on applicant’s agricultural income. The department may request state or federal income tax information from the applicant or the department of revenue to determine eligibility. To qualify, at least 30% of an applicant’s gross earned income must be from operations directly associated with farming and/or ranching.
**Effective January 1, 2018, credit or debit card purchases for diesel fuel are eligible for refund under the estimate allowed for agricultural use. Only credit or debit card purchases made within 50 miles of the applicant’s agricultural operation are eligible and receipts identifying the purchase as a credit or debit card transaction must be submitted with the application to support the claim.
MCA 15-70-432 requires that all applications for refunds be filed within 36 months of the date of purchase of the tax paid fuel.
MCA 15-70-434 allows the department 120 working days after receiving a refund claim to approve or reject it.
Agricultural use means use of gasoline and/or clear diesel, by a person who earns income while engaging in the business of farming or ranching and who files farm or income reports for tax purposes as required by the United States internal revenue service.
Gross Earned Agricultural or farm income means all taxable income and wages, before expenses, a person or business receives from: cultivating, operating, or managing a farm for gain or profit, either as owner or tenant; operating a livestock, dairy, poultry, fish, fur-bearing animals, or horticultural commodities business; operating a feed yard for the fattening of cattle; operating a fruit or truck farm; operating an agricultural commodities business; operating a plantation, ranch, range, nursery or orchard; and sale of crop shares if the person materially participates in producing the crop.
"Gross earned Non-AG income" means all taxable income and wages, before expenses, a person or business earns from non-agricultural activity such as: Custom hire, fuel tax refunds, real estate rental, pasture/farm rental (unless you materially participate, and file taxes that confirm your material participation) and equipment rental.
To support your claim for refund, you must submit your original bulk delivery invoices, original or copies of your cardtrol statements, and/or original or copies of your credit and debit card receipts (diesel only) issued at the time of each purchase.
All information listed below is required on an invoice or receipt to be eligible for a motor fuel tax refund and must be filled out at the time of purchase and delivery. If any information is missing, the applicant may provide a copy of the corresponding billing statement with the original invoice/receipt that supports the missing information. No altered or corrected invoice/receipt will be accepted for refund purposes. Invoices/receipts altered in any way must be voided and a new invoice/receipt issued by the dealer. The name on the invoices/receipts must exactly match the name on the application. If there is any variance, the applicant must list alternate names and/or DBA information box on front page of refund form or the invoice/receipt will not be accepted. Each invoice, receipt, cardtrol statement and accompanying billing statement collectively must contain or show the following:
a) name and address of seller;
b) name or account number of purchaser;
c) complete date of delivery or purchase;
d) type of fuel;
e) number of gallons purchased;
f) price per gallon or total amount of sale;
g) Any person who requests a refund or credit of motor fuel tax must have satisfactory evidence that the Montana motor fuel tax was included in the total price paid. Examples: “All taxes included in the price or a breakdown of taxes charged”, etc.