If you manage a fleet in Minnesota, you probably already know that taxes on gasoline and diesel will rise 12% on January 1, 2025. What you may not know is that the state has also clarified the administrative rules for filing refunds, a move that (in our experience) leads to states more actively auditing tax refund filings. In fact, we’ve already heard from customers in Minnesota that they’re facing increased scrutiny on their fuel tax filings. Meanwhile, the penalties for incorrectly filed refunds are $10 per gallon.
In short: taxes are rising, scrutiny is increasing, and penalties are steep. Add in the state’s existing tangle of percentage-based deductions for 23(!) different types of Power Take-Off, and what do you get? A tax environment where maximizing your refund and staying in compliance matter more than ever.
How much money are we talking about here?
Figuratively and literally, your mileage will vary. Your potential tax refund value depends significantly on your off-road fleet size and fuel consumption patterns. While refund amounts vary widely across different operations, a sampling of FuelCloud customers in Minnesota shows refunds ranging from $5,000 to $15,000. But the numbers can be even more substantial – the average FuelCloud customer files refunds worth more than $20,000 annually.
These values, of course, reflect the current tax situation. When taxes rise on January 1, so will the potential refunds!!
Untangling refund compliance
To get this full refund, you’ll need to keep track of how much fuel is being used for off-road vehicles and what purpose that fuel is being used for. We mentioned the 23 different types of Power Take-Off that the state designates for refund purposes - each of those categories allows for a different percentage of fuel to be deemed tax refundable.
For example, let's say that you own a construction company doing a job to demolish an old building, then pump new concrete foundations. You’ll need to keep track of all of the fuel used by concrete pumping trucks, dump trucks, and service trucks with jackhammers when those vehicles are used off-road, as well as the gallons used by Power Take-Offs for those vehicles to operate their equipment. However, while you can claim 75% of the gallons used for the PTO in the Concrete pumping truck, you can only claim 15% of the fuel used in the dump trucks and service vehicles, and you’ll need to be able to account for those vehicles separately.
You can, of course, do the necessary fuel tracking by hand. But you don’t have to…
The power of FuelCloud
FuelCloud’s cloud-based fuel management system is designed to automatically track and organize fuel usage by vehicles to make off-road fuel tax filings as easy as possible. FuelCloud even goes a step beyond other automated fuel management systems with our specialized tax tools, which generate specialized reports specifically designed to complete Minnesota (and other states!) fuel tax forms. FuelCloud can even autofill some tax refund forms for you to review, print, sign, and send.
Don't let Minnesota's fuel tax changes impact your bottom line. Implement a modern fuel management system that turns tax compliance from a challenge into an opportunity for optimization. Contact FuelCloud today to learn how our tax reporting tools can help your business navigate Minnesota's new fuel tax landscape while maximizing your refund potential.
