(a) An inspection fee is imposed on the ultimate consumer of gasoline at the rate of two cents ($.02) per gallon, if the excise tax levied on gasoline under Section 40-17-325(a)(1) is refunded by the Department of Revenue unless the ultimate consumer is specifically exempted from the inspection fee by this code. The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.
(b) An inspection fee is imposed on the ultimate consumer of undyed diesel fuel at the rate of two cents ($.02) per gallon, if the excise tax levied on diesel fuel under Section 40-17-325(a)(2) is refunded by the Department of Revenue unless the ultimate consumer is specifically exempted from the inspection fee by this code or unless the undyed diesel fuel is subject to a reduced rate inspection fee in subsection (i). The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.
(c) An inspection fee of two cents ($.02) per gallon is imposed on the first sale within this state or upon importation into this state of dyed diesel fuel unless (1) the purchaser or importer is an inspection fee permit holder, in which case the inspection fee is imposed at the point the inspection fee permit holder makes a sale to a purchaser who is not an inspection fee permit holder, or (2) the purchaser is subject to a reduced rate inspection fee in subsections (e), (f), (g), and (h). The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article. If the importer purchases dyed diesel fuel destined for Alabama from a supplier or permissive supplier and the importer is not an inspection fee permit holder and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, the supplier or permissive supplier shall collect and remit the inspection fee imposed by this article. If the importer brings dyed diesel fuel in from bulk storage outside the terminal system, the importer is responsible for collecting and remitting the inspection fee imposed by this article.
(d) An inspection fee of one cent ($.01) per gallon is imposed on the first sale within this state or upon importation into this state of dyed kerosene unless (1) the purchaser or importer is an inspection fee permit holder, in which case the inspection fee is imposed at the point the inspection fee permit holder makes a sale to a purchaser who is not an inspection fee permit holder, or (2) the purchaser is subject to a reduced rate inspection fee in subsections (e), (f), (g), and (h). The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article. If the importer purchases dyed kerosene destined for Alabama from a supplier or permissive supplier and the importer is not an inspection fee permit holder and does not have a valid inspection fee permit issued by the Alabama Department of Revenue, the supplier or permissive supplier shall collect and remit the inspection fee imposed by this article. If the importer brings dyed kerosene in from bulk storage outside the terminal system, the importer is responsible for collecting and remitting the inspection fee imposed by this article.
(e) Dyed diesel fuel and dyed kerosene that is used by the ultimate consumer thereof as motor fuel to operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.
(f) Dyed diesel fuel or dyed kerosene used by the ultimate consumer thereof to propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term tractors as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.
(g) Dyed diesel fuel or dyed kerosene that is of the types customarily used as, and that is intended to be used only as, fuel to propel railroad locomotives, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.
(h) Dyed diesel fuel or dyed kerosene used by the ultimate consumer thereof as a solvent or other agent in the treatment or preservation of wood products, shall be subject to the reduced inspection fee of one fortieth of $.01 ($.00025) per gallon. This reduced rate only applies to purchases by the ultimate consumer directly from an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.
(i) An inspection fee is imposed on the ultimate consumer of undyed diesel fuel at the rate of one fortieth of $.01 ($.00025) per gallon, if the excise tax levied on undyed diesel fuel under Section 40-17-325(a)(2) is refunded by the Department of Revenue and the ultimate consumer specifically used the undyed diesel fuel:
(1) To operate boats, yachts, ships, or other maritime vehicles, whether such boats, yachts, ships, or other maritime vehicles are used commercially or for pleasure;
(2) To propel or operate tractors which are not operated on public highways but which are used exclusively in preparing and cultivating land, harvesting any agricultural commodity, or for other agricultural purposes, including pasture and hay production; provided, however, that the term tractors as used herein shall not include automobiles, trucks, pickups, trailers, semitrailers, or other such vehicles;
(3) To propel railroad locomotives; or
(4) As solvent or other agent in the treatment or preservation of wood products.
The Department of Revenue is authorized to reduce the excise tax refund by the amount due for the inspection fee.
(j) An inspection fee of fifteen cents ($.15) per gallon is imposed on the person first selling lubricating oil in this state or importing lubricating oil into this state, regardless of whether the excise taxes levied on lube oil under Sections 40-17-171 and 40-17-220 are paid, unless the purchaser or importer is an inspection fee permit holder, in which case the inspection fee is imposed at the point the inspection fee permit holder makes a sale to a purchaser who is not an inspection fee permit holder. The person first selling, the person importing, or the inspection fee permit holder shall collect the fee imposed by this article.
(k) An inspection fee of two cents ($.02) per gallon is imposed on removal within this state of gasoline and undyed diesel fuel from the terminal using the terminal rack, other than by bulk transfer, if the supplier sells the gasoline or undyed diesel fuel to a licensed entity which is exempt from the excise tax levied on gasoline or diesel fuel under Section 40-17-325(a); unless the purchaser is the federal government. The supplier shall collect the inspection fee imposed by this article from the purchaser at the time of sale of the gasoline or undyed diesel fuel.
(l) An inspection fee of two cents ($.02) per gallon is imposed at the time gasoline and undyed diesel fuel is imported into this state, other than by bulk transfer, for delivery to a destination in this state, if the supplier sells the gasoline or undyed diesel fuel to a licensed entity which is exempt from the excise tax levied on gasoline or diesel fuel under Section 40-17-325(a); unless the purchaser is the federal government. The supplier or permissive supplier shall collect the inspection fee imposed by this article from the person who imports the gasoline or undyed diesel fuel into this state.
(m) In each subsequent sale of petroleum products on which the inspection fee has been paid, the amount of the inspection fee shall be added to the selling price so that the inspection fee is paid ultimately by the person using or consuming the petroleum product.
(n) Petroleum products in a refinery, a pipeline, a terminal, or a marine vessel transporting petroleum products to a refinery or terminal is in the bulk transfer/terminal system. Petroleum products in a motor fuel storage facility including, but not limited to, a bulk plant that is not part of a refinery or terminal, in the motor fuel supply tank of any engine or motor vehicle, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system.
(o) The inspection fee provided for in this section is in addition to all other fees and all taxes payable with respect to petroleum products. The inspection fee shall be paid on the net gallons of dyed diesel fuel or dyed kerosene.
(p) Aviation gasoline and aviation jet fuel are exempt from the inspection fee.
Last modified: May 3, 2021