A.R.S. tit. 28 ch. 16 — Arizona Revised Statutes Title 28 Chapter 16 — Taxes

28-5601. Definitions In this article and articles 2 and 5 of this chapter, unless the context otherwise requires: 1. "Blending": (a) Means the mixing of one or more products, regardless of the original character of the product blended, if the product obtained by the blending is capable of use or otherwise sold for use in the generation of power for the propulsion of a motor vehicle, aircraft or watercraft. (b) Does not include blending that occurs in the process of refining by the original refiner of crude petroleum or the blending of products known as lubricating oil and greases. 2. "Bulk end user" means a person who receives into the person's own storage facilities in transport truck lots motor fuel for the person's own consumption. 3. "Bulk plant" means a motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be removed at a rack. 4. "Bulk transfer" means any transfer of motor fuel from one location to another by pipeline tender or marine delivery within the bulk transfer terminal system. 5. "Bulk transfer terminal system" means the motor fuel distribution system consisting of refineries, pipelines, marine vessels and terminals. Motor fuel in a refinery, pipeline, vessel or terminal is in the bulk transfer terminal system. Motor fuel in the fuel supply tank of any engine, or in any tank car, rail car, trailer, truck or other equipment suitable for ground transportation, is not in the bulk transfer terminal system. 6. "Consumer" means the end purchaser of motor vehicle fuel for use on the highways in this state, the end purchaser of motor vehicle fuel for use in watercraft on waterways of this state or the end purchaser of aviation fuel for use in aircraft. 7. "Destination state" means the state, territory or foreign country to which motor fuel is directed for delivery into a storage facility, a receptacle, a container or a type of transportation equipment for the purpose of resale or use. 8. "Distributor" means a person who acquires motor fuel from a supplier or another distributor for subsequent sale or use and who may blend or import into or export from this state motor fuel in the original package or container or otherwise but excluding a person who imports motor fuel in the fuel tank of a motor vehicle or aircraft. 9. "Dyed diesel fuel" means diesel fuel that is dyed pursuant to United States internal revenue service regulations or requirements, including any invisible marker requirements. 10. "Fuel tank" means a receptacle on a motor vehicle, watercraft or aircraft from which fuel is supplied for the propulsion of the motor vehicle, watercraft or aircraft, excluding a cargo tank but including a separate compartment of a cargo tank used as a fuel tank and an auxiliary tank or receptacle of any kind from which fuel is supplied for the propulsion of the motor vehicle, watercraft or aircraft, whether or not the tank or receptacle is directly connected to the fuel supply line of the motor vehicle, watercraft or aircraft. 11. "Highway" means any way or place in this state of whatever nature that is maintained by public monies and that is open to the use of the public for purposes of vehicular travel, including a highway under construction. 12. "In this state" means any way or place within the exterior limits of the state of Arizona that is maintained by public monies, including any such way or place that is owned by or ceded to the United States of America. 13. "Indian reservation" means all lands that are within the limits of areas set aside by the United States for the exclusive use and occupancy of Indian tribes by treaty, law or executive order and that are currently recognized as Indian reservations by the United States department of the interior. 14. "Indian tribe" means any organized nation, tribe, band or community recognized as an Indian tribe by the United States department of the interior. 15. "Interstate user" means a person registering a use class motor vehicle under chapter 7, article 7 or 8 of this title or section 28-2321 or 28-2324. 16. "Invoiced gallons" means the gallons actually billed on an invoice in payment to a supplier. 17. "Light class motor vehicle" means a motor vehicle that uses use fuel on the highways in this state but excludes a road tractor, truck tractor, truck or passenger carrying vehicle having a declared gross vehicle weight of more than twenty-six thousand pounds or having more than two axles. 18. "Motor fuel" means motor vehicle fuel, use fuel and aviation fuel. 19. "Motor vehicle" means a self-propelled vehicle required to be licensed or subject to licensing for operation on a highway. 20. "Permissive supplier" means an out-of-state supplier that elects, but is not required, to have a supplier's license pursuant to this article. 21. "Person" means an individual, firm, partnership, joint venture, association, corporation, estate, trust, business trust, receiver or syndicate, this state, any county, city, town, district or other subdivision of this state, an Indian tribe, or any other group or combination acting as a unit. 22. "Position holder": (a) Means the person who holds the inventory position in motor fuel in a terminal, as reflected on the records of the terminal operator. For the purposes of this subdivision, "a person who holds the inventory position in motor fuel" means a person who has a contract with the terminal operator for the use of storage facilities and terminaling services for fuel at the terminal. (b) Includes a terminal operator who owns fuel in the terminal. 23. "Public monies" means those monies that are received by this state and that are derived all or in part from tax revenues or other funding sources. 24. "Qualified terminal" means a terminal that is designated as a qualified terminal pursuant to the United States internal revenue code, regulation and practices and that has been assigned a terminal control number by the United States internal revenue service. 25. "Rack" means a mechanism for delivering motor fuel from a refinery, a terminal or a bulk plant into a railroad tank car, a transport truck or other means of transfer that is outside the bulk transfer terminal system. 26. "Refiner" means any person who owns, operates or otherwise controls a refinery within the United States. 27. "Refinery" means a facility that is used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, transmix or other hydrocarbons or by blending and from which motor fuel may be removed by pipeline, by vessel or at a rack. 28. "Road tractor" means a motor vehicle that is designed and used for drawing other vehicles and that is not constructed to carry either a load independently or any part of the weight of a vehicle or load so drawn. 29. "Sell" includes a transfer of title or possession, exchange or barter in any manner or by any means. 30. "Supplier": (a) Means a person who is registered pursuant to section 4101 of the United States internal revenue code for transactions in motor fuels in the bulk transfer terminal distribution system and who is one of the following: (i) The position holder in a terminal or refinery in this state. (ii) A person who imports motor fuel into this state from a foreign country. (iii) A person who acquires motor fuel from a terminal or refinery in this state from a position holder pursuant to a two party exchange. (iv) The position holder in a terminal or refinery outside this state with respect to motor fuel that that person imports into this state on the account of that person. (b) Includes a permissive supplier unless specifically provided otherwise. Supplier does not include a terminal operator merely because the terminal operator handles motor fuel consigned to the terminal operator within a terminal. 31. "Terminal" means a storage and distribution facility for motor fuel, which is supplied by pipeline or marine vessel, that is registered as a qualified terminal by the United States internal revenue service and from which motor fuel may be removed at a rack. 32. "Terminal bulk transfer" includes the following: (a) A marine barge movement of motor fuel from a refinery or terminal to a terminal. (b) Pipeline movements of motor fuel from a refinery or terminal to a terminal. 33. "Terminal operator" means any person who owns, operates or otherwise controls a terminal and who does not use a substantial portion of the motor fuel that is transferred through or stored in the terminal for the person's own use or consumption or in the manufacture of products other than motor fuel. A terminal operator may own the motor fuel that is transferred through or stored in the terminal. 34. "Transmix" means the buffer or interface between two different products in a pipeline shipment or a mix of two different products within a refinery or terminal that results in an off-grade mixture that is not usable or salable as motor fuel. 35. "Two party exchange" means a transaction: (a) In which motor fuel is transferred from one licensed supplier or licensed permissive supplier to another licensed supplier or licensed permissive supplier. (b) That includes a transfer from the person that holds the original inventory position for motor fuel in the terminal as reflected on the records of the terminal operator. (c) That is simultaneous with removal from the terminal by the receiving exchange party. (d) In which the terminal operator in the terminal operator's books and records treats the receiving exchange party as the supplier that removes the product across a terminal rack for purposes of reporting the events to the department. 36. "Use" includes the placing of fuel into any receptacle on a motor vehicle from which fuel is supplied for the propulsion of the vehicle unless the operator of the vehicle establishes to the satisfaction of the director that the fuel was consumed for a purpose other than to propel a motor vehicle on a highway in this state and, with respect to fuel brought into this state in any such receptacle on a use class motor vehicle, the consumption of the fuel in this state. A person who places fuel in a receptacle on a use class motor vehicle of another is not deemed to have used the fuel. 37. "Use class motor vehicle" means a motor vehicle that uses use fuel on a highway in this state and that is a road tractor, truck tractor, truck or passenger carrying vehicle having a declared gross vehicle weight of more than twenty-six thousand pounds or having more than two axles. 38. "Use fuel" includes all gases and liquids used or suitable for use to propel motor vehicles, except fuels that are subject to the motor vehicle fuel tax imposed by this article. 39. "User" includes a person who, within the meaning of the term use as defined in this section, uses fuel in a use class motor vehicle. 40. "Vendor" includes a person who sells use fuel in this state and who places the fuel or causes the fuel to be placed into any receptacle on a motor vehicle from which receptacle fuel is supplied for the propulsion, including a service station dealer, a broker and a user who sells use fuel to others. 28-5602. Enforcement The following persons have authority to enforce this article: 1. The director of the department of transportation and the director's duly appointed agents. 2. The associate director of the weights and measures services division of the Arizona department of agriculture and the associate director's duly appointed agents. 3. The department of public safety and its officers. 28-5603. Motor fuel testing A. The director may take samples of any liquid believed to be motor fuel and may make or cause to be made an analysis of the liquid. B. The chemistry department or other qualified department of the university of Arizona shall: 1. Analyze samples on request of the director. 2. Promptly furnish to the director a full report of the analysis without cost. 28-5604. Reward for detecting violations The department may set up in its budget for the fiscal year an item from which a person, other than a state officer or employee, who directs the attention of the director to a person who has failed to file the required reports and has failed to pay taxes imposed by this article or section 28-8344 may be paid an amount that in the discretion of the department is deemed proper but that does not exceed ten per cent of the amount of the tax, penalty and interest ultimately collected from the person as a result of the information. 28-5605. Use fuel tax collection; fuel dispenser labels; civil penalty A. A vendor shall not collect more than the use fuel tax imposed pursuant to section 28-5606, subsection B, paragraph 1 from a person who purchases use fuel for use in the propulsion of a light class motor vehicle on a highway in this state or for use in the propulsion of a use class motor vehicle that is exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433 on a highway in this state. B. Subject to the following, vendors shall label use fuel dispensers pursuant to standards established by the weights and measures services division of the Arizona department of agriculture: 1. Labels on use fuel dispensers shall notify the purchaser of the state use fuel tax rate. The department of transportation shall provide the use fuel dispenser labels to vendors if the vendor submits a receipt from one fueling position for each use fuel type and, if applicable, one in-store point-of-sale system. 2. If the vendor sells use fuel only to light class motor vehicles or use class motor vehicles that are exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433, or both, the vendor shall post that limitation and include the tax rate prescribed in section 28-5606, subsection B, paragraph 1. 3. If light class motor vehicles and use class motor vehicles are allowed to fuel at the same use fuel dispenser, the vendor shall include the tax rate prescribed in section 28-5606, subsection B, paragraph 2 and post a notice that the tax rate for light class motor vehicles and use class motor vehicles that are exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433 is the tax rate prescribed in section 28-5606, subsection B, paragraph 1. 4. If the vendor prohibits light class motor vehicles or use class motor vehicles from dispensing fuel from a specific fuel dispenser, the vendor shall post that prohibition. 5. In addition to posting a sign on a use fuel dispenser that indicates that the price of the use fuel dispensed from that dispenser includes the applicable federal and state taxes, a vendor that dispenses use fuel from a cardlock facility shall require the purchaser of use fuel for light class motor vehicles or use class motor vehicles that are exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433, or both, to complete a declaration of status in a form and a manner approved by the director. For the purposes of this paragraph, "cardlock facility" means a use fuel vendor that satisfies all of the following: (a) Is licensed in this state. (b) Sells only to preapproved purchasers of use fuel who have been issued cards, keys or other controlled access to identify the exclusive withdrawal of that particular purchaser. (c) Does not have a representative on the premises to observe the withdrawal of use fuel from the vendor's storage. (d) Measures volumes of fuel dispensed by pump meters or other accurate recording devices. C. A vendor who violates subsection B of this section is subject to a civil penalty of $100 for each day the violation continues. 28-5606. Imposition of motor fuel taxes A. In addition to all other taxes provided by law, a tax of $.18 per gallon is imposed on motor vehicle fuel possessed, used or consumed in this state. B. To partially compensate this state for the use of its highways: 1. A use fuel tax is imposed on use fuel used in the propulsion of a light class motor vehicle on a highway in this state at the same rate per gallon as the motor vehicle fuel tax prescribed in subsection A of this section, except that there is no use fuel tax on alternative fuels. 2. A use fuel tax is imposed on use fuel used in the propulsion of a use class motor vehicle on a highway in this state at the rate of $.26 for each gallon, except that there is no use fuel tax on alternative fuels and use class vehicles that are exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433 are subject to the use fuel tax imposed by paragraph 1 of this subsection. C. The motor vehicle fuel and use fuel taxes imposed pursuant to this section and the aviation fuel taxes imposed pursuant to section 28-8344 are conclusively presumed to be direct taxes on the consumer or user but shall be collected and remitted to the department by suppliers for the purpose of convenience and facility only. Motor vehicle fuel, use fuel and aviation fuel taxes that are collected and paid to the department by a supplier are considered to be advance payments, shall be added to the price of motor vehicle fuel, use fuel or aviation fuel and shall be recovered from the consumer or user. D. Motor vehicle fuel and use fuel taxes imposed pursuant to this section on the use of motor vehicle fuel and use fuel and the aviation fuel taxes imposed pursuant to section 28-8344 on the use of aviation fuel, other than by bulk transfer, arise at the time the motor vehicle, use or aviation fuel either: 1. Is imported into this state and is measured by invoiced gallons received outside this state at a refinery, terminal or bulk plant for delivery to a destination in this state. 2. Is removed, as measured by invoiced gallons, from the bulk transfer terminal system or from a qualified terminal in this state. 3. Is removed, as measured by invoiced gallons, from the bulk transfer terminal system or from a qualified terminal or refinery outside this state for delivery to a destination in this state as represented on the shipping papers if a supplier imports the motor vehicle, use or aviation fuel for the account of the supplier or the supplier has made a tax precollection election pursuant to section 28-5636. E. If motor fuel is removed from the bulk transfer terminal system or from a qualified terminal or is imported into this state, the original removal, transfer or importation of the motor fuel is subject to the collection of the tax. If this motor fuel is transported to another qualified terminal or reenters the bulk transfer terminal system, the subsequent sale of the motor fuel on which tax has been collected is not subject to collection of an additional tax if proper documentation is retained to support the transaction. 28-5607. Fuel imported by other than licensed supplier; payment of tax; fee; import limitation A. A person who is not licensed as a supplier and who imports motor fuel from a point outside this state to a point in this state shall pay both: 1. The tax at a department facility approved by the director before importing the fuel. 2. A twenty-five dollar administrative processing fee. B. A person who is not licensed as a supplier and who causes motor fuel on which taxes have not been collected to be transported from a point outside this state to a point in this state shall pay to the director the following: 1. The tax required by section 28-5606 or 28-8344. 2. A penalty equal to the tax required by section 28-5606 or 28-8344. 3. Interest of one per cent per month or portion of a month on the tax. C. A person who is not licensed as a supplier may not import more than sixteen thousand gallons of motor fuel per calendar year. 28-5608. Fuel imported in fuel tanks; violation; classification A. An owner or operator of a motor vehicle, watercraft or aircraft who imports motor fuel into this state in the fuel tank or tanks of a motor vehicle, watercraft or aircraft in a quantity exceeding the capacity of the fuel tank or tanks of that vehicle, watercraft or aircraft according to the manufacturer's stock specifications shall pay to the director the tax required of suppliers on the excess motor fuel. B. A person who violates this section is guilty of a class 2 misdemeanor. 28-5609. Railroad common carrier exemption; exception; report A. Except for section 28-5607, subsection B, sections 28-5602, 28-5603, 28-5608, 28-5610, 28-5611, 28-5612, 28-5622, 28-5624 and 28-5923 and this section, this article does not apply to railroad common carriers that are not engaged in the business of a supplier for pecuniary gain. B. A railroad common carrier: 1. If it imports motor fuel, shall make a verified report to the director on forms prescribed and furnished by the director, on or before the twenty-seventh day of the next succeeding month, showing the amount of fuel it has imported. 2. If it sells, otherwise disposes of or uses any fuel it has imported in a motor vehicle operated on the highways in this state or in a watercraft or an aircraft, shall make a verified report to the director on forms prescribed and furnished by the director, on or before the twenty-seventh day of the next succeeding month, showing either: (a) The name of the person or persons to whom the fuel was sold or otherwise disposed of. (b) If used by it in a motor vehicle operated on the highways in this state or in a watercraft or an aircraft, a description of the vehicle, watercraft or aircraft in which the fuel was used. 3. Shall pay to the director at the time the report is made the tax required of suppliers by this article. 4. Shall furnish to the director other information concerning motor fuel imported by it as the director requires. 5. May be required to file a bond with the director in an amount fixed by the director to ensure compliance with this section. 28-5610. Exemptions A. The following are exempt from motor vehicle fuel and use fuel taxes imposed by section 28-5606 and aviation fuel taxes imposed by section 28-8344: 1. Motor fuel for which proof of export is available in the form of a terminal-issued destination state shipping paper or bill of lading and that is either: (a) Exported by a supplier who is licensed in the destination state. (b) Sold by a supplier to a distributor for immediate export. 2. Motor fuel that was acquired by a distributor, as to which the tax imposed by this article or section 28-8344 has previously been paid or accrued and that was subsequently exported by transport truck by or on behalf of the distributor in a diversion across state boundaries properly reported to the department. If diverted by a distributor, the distributor shall perfect the exemption by filing a refund application with the department within six months after the diversion. 3. Motor vehicle fuel or use fuel that is sold within an Indian reservation to an enrolled member of the Indian tribe who is living on the Indian reservation established for the benefit of that Indian tribe and that is used by the enrolled member for the enrolled member's own benefit. This exemption does not apply to sales within an Indian reservation by an Indian or Indian tribe to non-Indian consumers or to Indian consumers who are not members of the Indian tribe for which the Indian reservation was established or to use fuel used to operate motor vehicles for a commercial purpose outside of the reservation on highways in this state. For the purposes of this paragraph, "Indian" means an individual who is registered on the tribal rolls of the Indian tribe for whose benefit the Indian reservation was created. 4. Motor vehicle fuel or use fuel used solely and exclusively as fuel to operate a motor vehicle on highways in this state if the motor vehicle is leased to or owned by and is being operated for the sole benefit of an Indian tribe for governmental purposes only. 5. Motor fuel that is moving in interstate or foreign commerce and that is not destined or diverted to a point in this state. 6. Motor vehicle or aviation fuel that is sold to the United States or an instrumentality or agency of the United States. 7. Taxable use fuel that has been accidentally contaminated so as to be unsalable as highway fuel as proved by proper documentation. 8. Dyed diesel fuel, including fuel used by either of the following: (a) A farm tractor or implement of husbandry designed primarily for or used in agricultural operations and only incidentally operated or moved on a highway. (b) A road roller or vehicle that is all of the following: (i) Designed and used primarily for grading, paving, earthmoving or other construction work on a highway. (ii) Not designed or used primarily for transportation of persons or property. (iii) Incidentally operated or moved over the highway. B. A use class vehicle shall pay the use fuel tax for light class motor vehicles prescribed by section 28-5606, subsection B, paragraph 1 if the vehicle is a truck and satisfies all of the following: 1. Is at least twenty-five years old. 2. Has been issued a historic vehicle license plate pursuant to section 28-2484. 3. Is not used as a commercial vehicle. C. Notwithstanding subsection A, paragraph 8 of this section, the following are not exempt from use fuel taxes imposed by section 28-5606: 1. A vehicle that was originally designed for the transportation of persons or property and to which machinery is attached or on which machinery or other property may be transported. 2. A dump truck. 3. A truck mounted transit mixer. 4. A truck or trailer mounted crane. 5. A truck or trailer mounted shovel. D. Except as provided in subsections E and F of this section, a person who claims an exemption pursuant to this section shall perfect the exemption by claiming a refund pursuant to section 28-5612. E. Subject to sections 28-5645, 28-5646, 28-5647, 28-5648, and 28-5649, dyed diesel fuel is exempt from use fuel taxes at the time of sale. F. Motor fuel that originates outside this state, is moving in interstate or foreign commerce and is not destined or diverted to a point in this state is exempt from motor fuel taxes as the motor fuel travels across this state. 28-5611. Refunds; motor vehicle fuel A. Except as provided in subsection B of this section, on application to the director pursuant to this article and if section 28-5612 is complied with, a person who buys and uses motor vehicle fuel shall receive a refund in the amount of the tax if the person pays the tax on the fuel and either: 1. Uses the fuel other than in any of the following: (a) A motor vehicle on a highway in this state. (b) Watercraft on the waterways of this state. (c) A motor vehicle operating on a transportation facility or toll road pursuant to chapter 22 of this title. 2. Buys aviation fuel for use in aircraft applying seeds, fertilizer or pesticides. 3. Loses the fuel by fire, theft or other accident. B. If a claim for refund is based on the use of motor vehicle fuel in aircraft, five cents of the tax collected on each gallon of motor vehicle fuel claimed shall remain in the state aviation fund, and the department shall refund the remainder of the tax pursuant to section 28-5612. 28-5612. Refund procedure; violation A. A person who is seeking a refund and who is not licensed as a supplier, interstate user, restricted distributor or use fuel vendor shall: 1. File an application with the director within six months after the date of sale. 2. Submit proof satisfactory to the director of the following: (a) The purpose for which the fuel was used. (b) The tax paid purchase. 3. Make an application in a form prescribed by the department that requests the following information: (a) Name and address of the claimant. (b) Period covered by the claim showing dates. (c) Location of equipment, if applicable. (d) Gallons on which a refund is claimed. (e) Amount of the refund claimed. (f) Other information required by the director. B. The claim shall not be under oath but shall contain or be accompanied by a written declaration that it is made under penalties of perjury and, if it is for motor vehicle fuel, that it complies in all respects with section 28-5611 relating to refunds. C. The original invoice or a duplicate that is satisfactory to the director and that includes the following information shall accompany the application: 1. The date of purchase. 2. The seller's name and address. 3. The number of gallons purchased. 4. The type of fuel purchased. 5. The price per gallon of the fuel. 6. Other information required by the director. D. If a person files a claim for a refund pursuant to this section for motor fuel exported, the person shall make satisfactory proof of export to the director and file the claim within three months after the date of export in the form and containing the information required by the director. The original invoice or an acceptable duplicate shall accompany the claim. E. The director shall accept only one application for refund of motor fuel taxes for any one person within a six month period if the aggregate total of all motor fuel taxes paid and for which a refund is claimed does not equal at least ten dollars. F. If a person who is exempt from use fuel taxes pursuant to section 28-5610 submits a claim for a refund pursuant to this section for use fuel taxes, the department shall not pay the refund until the department determines the difference between the amount of the refund and the amount of the use tax that is imposed under title 42, chapter 5, article 4 on the fuel exempt from use fuel taxes if owed by the person. If the department determines that the amount of the refund is greater than the amount owed for the use tax, the department shall deposit the amount owed for the use tax pursuant to subsection M of this section and refund the amount of the difference to the person. If the department determines that the amount of the refund is less than the amount owed for the use tax, the department shall forward any balance due information to the department of revenue for collection. G. Except as provided in subsection F of this section, if the director does not issue a refund within sixty days after a complete application for refund is filed as prescribed in this article, the director shall pay interest at the rate of eleven per cent per year from the date the complete application for refund is filed until the date on which the refund is made. H. If the director denies a refund, the director shall notify the claimant that the refund is denied. The director's denial is final unless the applicant makes a written request for a hearing as prescribed in section 28-5924. I. It is unlawful for a person to knowingly operate a motor vehicle on the highways or a watercraft on the waterways using motor vehicle fuel or use fuel that has been sold to a person making a claim pursuant to this section. J. In addition to other penalties prescribed by law, the director shall not give a person who violates this section a refund on motor fuel purchased during the six months succeeding the date the director advises the person by mail of the director's discovery of the violation. K. A person whose right to a refund is suspended may bring an action in superior court in Maricopa County to set aside the suspension. L. The director may recover excess refunds from the person to whom the refund was made. The director shall assess the claimant the amount of the excess refund and interest. The director shall compute interest at one per cent per month of the amount of excess refund due beginning on the date of refund and until the date the assessment is paid. M. The department of transportation shall deposit, pursuant to sections 35-146 and 35-147, use tax revenues collected pursuant to subsection F of this section in the state general fund by the end of each month and notify the department of revenue of the amount of use tax collected each month. 28-5613. Licensee refunds; definition A. A licensee who is seeking a refund shall apply pursuant to section 28-5612, except that a licensee shall file an application for refund within three years after the date of purchase or invoice of the motor fuel for which a refund is claimed. B. For the purposes of this section, "licensee" includes a supplier, an interstate user, a restricted distributor or a licensed use fuel vendor. 28-5614. Refunds; use fuel A. If a vendor pays the use fuel tax rate for use class motor vehicles on use fuel that is actually used in the propulsion of a light class motor vehicle on a highway in this state or that is actually used in the propulsion of a use class motor vehicle that is exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433 on a highway in this state and for the purpose of convenience and facility only, the vendor may apply to the department for a refund of the difference between the amount of the use class motor vehicle use fuel tax paid and the amount of the light class motor vehicle use fuel tax on the same number of gallons purchased. B. The director may prescribe any forms the director deems necessary to implement this section. C. A vendor may file an application for a refund pursuant to this section on a monthly basis subject to the limitations prescribed in section 28-5612. D. The director shall: 1. Pay the refund from current use fuel tax receipts. 2. Deduct the refund from the monthly use fuel tax receipts before the deposit pursuant to section 28-5730 is made. 28-5615. Presumption of use A. For the proper administration of this article and to prevent evasion of the use fuel tax, it is presumed, until the contrary is established by competent proof under rules and procedures the director adopts, that all use fuel received into any receptacle on a motor vehicle from which fuel is supplied to propel the vehicle is consumed in propelling the vehicle on the highways in this state. B. If a vendor's dealings in use fuel primarily involve delivery of use fuel into the fuel tanks of motor vehicles it is presumed, until the contrary is established by competent proof under procedures the director adopts, that the vendor's total use fuel acquisitions have been delivered into the fuel tanks of motor vehicles for the propulsion of the vehicles on the public highways. 28-5616. Light class motor vehicles With respect to light class motor vehicles, the director shall not: 1. Issue a refund for use fuel purchased in this state and consumed on the highways of another state. 2. Tax use fuel acquired in another state and consumed on the highways in this state. 28-5617. Vendors; receipt A. A vendor of use fuel, the use of which is taxable under this article, who sells and delivers the use fuel into a fuel tank shall give the user a receipt for the use fuel. The receipt shall include the following: 1. The date of purchase. 2. The seller's name and address. 3. The number of gallons purchased. 4. The type of fuel purchased. 5. The price per gallon of the fuel. 6. The rate of tax paid. 7. Other information required by the director. B. A person who is the owner of use fuel that is contained in bulk storage and who permits the fuel to be delivered into the fuel tank of a motor vehicle for which the person is not the owner or lessee: 1. Is presumed to be a vendor of use fuel. 2. Shall comply with the requirements in this article for vendors of use fuel. 28-5618. Report requirements A. On or before the twenty-seventh day of each month, a supplier shall file with the director a true and verified statement in a form prescribed by the director showing: 1. The total number of gallons of motor vehicle fuel or aviation fuel, blended, imported, exported or acquired during the preceding calendar month. 2. The number of gallons of motor vehicle fuel or aviation fuel sold or otherwise disposed of by the supplier for use in each of the several counties of this state. 3. The total number of gallons of motor vehicle fuel that is included in this subsection and that is intended for use in aircraft. 4. Other information the director requires. B. In addition to making the statement required in subsection A and if the supplier received an interstate shipment of motor vehicle fuel during the preceding month, the supplier shall report on or before the twenty-seventh day of each month to the director in a form prescribed by the director: 1. The quantity and particular description of the fuel received by interstate shipment and delivered intercounty. 2. The name of the consignor and consignee. 3. The date shipped. 4. The date received. 5. How it was shipped. 6. Other information the director requires. C. A supplier may amend a report filed pursuant to this section within three years after the date the original tax report was filed unless the report for the period is final due to an audit. D. If an amended report results in a reduction in taxes paid, the department shall credit the licensee's account unless the licensee files a written request for a refund. 28-5619. Records required; violation; classification A. Suppliers and restricted distributors shall maintain and keep records of motor vehicle fuel or aviation fuel received, acquired, used, sold and delivered in this state by the supplier or restricted distributor, the amount of tax paid as part of the purchase price, invoices, bills of lading and other pertinent records and papers required by the director for the reasonable administration of this article at least until the later of the following: 1. Three years after a report is required to be filed pursuant to this article. 2. Three years after a report is filed. B. Any person, other than a restricted distributor, purchasing motor vehicle fuel taxable under this article or aviation fuel taxable under section 28-8344 from a supplier for the purpose of resale shall maintain and keep for one year a record of motor vehicle fuel or aviation fuel received, the amount of tax paid to the supplier as part of the purchase price, delivery tickets, invoices, bills of lading and other records the director requires. C. Each distributor and vendor shall maintain and keep for three years the following: 1. Records of use fuel received, sold or delivered in this state by the distributor or vendor. 2. Invoices, bills of lading and other pertinent records and papers required by the director for the reasonable administration of this article. D. The director may require distributors to file information as to sales or deliveries to vendors or users of use fuel at the times and in the form as the director requires. E. A person who violates this section is guilty of a class 1 misdemeanor. 28-5620. Records and equipment inspections; hearings; use restrictions; violation; costs A. The director or a deputy, employee or agent authorized by the director may examine during usual business hours records, books, papers, storage tanks and any other equipment of a person pertaining to motor fuel imported, received, sold, shipped, delivered or used to either: 1. Verify the truth and accuracy of a statement, report, return or claim. 2. Ascertain whether the tax imposed by this article or section 28-8344 has been paid. 3. Determine the financial responsibility of the supplier for the payment of the taxes imposed by this article or section 28-8344. 4. Determine the validity of a refund. B. In the enforcement of this article, the director may hold hearings, take testimony of persons, issue subpoenas for the purpose of taking testimony, compel attendance of witnesses and conduct investigations the director deems necessary. C. The director may prescribe forms for required reports or claims for refund or forms of record to be used by suppliers, distributors, restricted distributors, vendors or refund claimants. D. Records required by this article may be maintained in this state. If the records are maintained outside this state and on request of the director, the records shall be made available at a location in this state designated by the director. If the records are maintained outside this state and will not be made available at the location designated by the director, the director may require the person to whom a records request has been made to pay in advance costs reimbursable for subsistence and travel expenses for the director or an agent of the director to conduct the examination of the records. 28-5621. Failure to report or pay tax; penalties; interest; transmittal date A. Except as otherwise provided in this subsection, if a supplier fails to submit the monthly report to the director on or before the twenty-seventh day of the month, fails to submit the data or information required under this article in the monthly report or fails to pay the amount of taxes due when payable, the supplier shall pay interest on the unpaid tax at the rate of one per cent per month or portion of a month from the due date until paid and a penalty of five per cent shall be added to any tax not paid on or before the day prescribed for the payment of the tax. A supplier is not subject to the five per cent penalty on transactions reported within ninety days after the due date if the supplier has paid at least ninety-nine and one-half per cent of the actual tax liability for the month by the due date. B. In addition to the penalty provided by subsection A, a person who fails to file a report required by this section when due shall pay an additional penalty of twenty-five dollars. C. If a report or remittance required by this article is transmitted through the United States mail and is not received by the director until after the date on which the report is required to be filed or the payment was required to be made and if the envelope in which the report or remittance is enclosed has a post office cancellation mark dated on or before that date, on receipt of the envelope, the director shall treat the report or remittance as if it had been received on the required date. 28-5622. Tax estimate If a person neglects or refuses to make and file a report as required by this article, or files an incorrect or fraudulent report, the director shall determine from information obtainable in the director's office or elsewhere the number of gallons of motor fuel with respect to which the person has incurred liability under this article or section 28-8344. 28-5623. Civil penalty; use fuel purchaser; vendor refund; financial penalty prohibited; subsequent violations A. Notwithstanding any other law, if a person intentionally purchases use fuel for use in a use class motor vehicle that is not exempt pursuant to section 28-5432 from the weight fee prescribed in section 28-5433 and the person pays the use fuel tax rate for a light class motor vehicle, all of the following apply: 1. Except as provided in subsection B of this section, the person is subject to a civil penalty of one thousand dollars or ten dollars for each gallon of use fuel dispensed, whichever is greater, and shall pay to the department the difference between the amount of light class motor vehicle use fuel tax paid and the amount of the use class motor vehicle use fuel tax on the same number of gallons purchased. 2. The department may not deny a refund requested by a vendor pursuant to section 28-5614 for that purchase. 3. The department shall not impose any penalty, including a financial penalty of any kind, on a vendor for that purchase if the purchase was determined as a result of any inquiry, including any audit process. B. For a second or subsequent violation, the civil penalty shall be determined by multiplying the amount prescribed in subsection A of this section by the number of prior violations. C. A vendor shall not be liable for the civil penalty imposed by this section provided the vendor is not the owner or operator of the vehicle into which the fuel was dispensed or conspired with the purchaser to evade the proper tax rate. 28-5624. Transportation of fuel by motor vehicle; documentation; violation; penalties A. An operator of a motor vehicle transporting motor fuel on a highway in this state shall carry documentation to accompany the shipment at all times while the shipment is being transported on the highways in this state. The director may inspect the documentation at any time. B. The documentation shall include: 1. The date of shipment of the fuel. 2. The quantity and particular description of the fuel. 3. The names of the consignor and consignee. 4. The destination state of the fuel shipment. 5. Other information as the director requires. C. An operator of a motor vehicle transporting motor fuel in this state who fails to carry documentation at the time and in the manner required pursuant to subsection A of this section shall pay to the director a penalty of one hundred dollars for each shipment not accompanied by the required documentation in addition to payment of the tax required by section 28-5606 or the tax prescribed in section 28-8344. An operator of a motor vehicle transporting motor fuel may apply for abatement of the penalty pursuant to section 28-5934. 28-5625. Restricted distributor licenses; reports; violation; classification A. A person shall obtain a license and report pursuant to subsection D of this section as a restricted distributor of motor vehicle fuel from the director if all of the following apply: 1. The person transports for sale motor vehicle fuel to another county from the county that was originally reported by the supplier. 2. The person purchases or otherwise acquires motor vehicle fuel in tank car or cargo lots. 3. The person sells the motor vehicle fuel for delivery in this state or export from this state. 4. The person is not required by this article to be licensed as a supplier. B. To obtain a restricted distributor license, a person shall file with the director an application that contains the following: 1. The name under which the person is transacting business in this state. 2. The address of the person's principal office or place of business in this state. 3. The name and address of the owner, the names and addresses of the partners if the restricted distributor is a partnership or the names and addresses of the principal officer if the restricted distributor is a corporation or association. 4. Other information the director requires. C. If the application is in proper form and is accepted for filing, the director shall issue to the applicant a license to transact business as a restricted distributor in this state subject to cancellation as provided by law. D. A restricted distributor shall report on or before the twenty-seventh day of each month to the director in a form prescribed by the director: 1. The quantity of motor vehicle fuel acquired during the preceding calendar month. 2. The disposition of the motor vehicle fuel for use in each of the several counties. 3. The name of the consignor and consignee. 4. The date shipped. 5. The date received. 6. How it was shipped. 7. Other information the director requires. E. A restricted distributor may amend a report filed pursuant to this section within three years after the date the original tax report was filed unless the report for the period is final due to an audit. F. If a restricted distributor files a false report or fails, refuses or neglects to file a report pursuant to subsection D of this section, the director may cancel the restricted distributor's license and notify the restricted distributor of the cancellation by regular mail at the last known address of the restricted distributor appearing in the department's records. G. If a restricted distributor ceases to engage in business as a restricted distributor in this state by reason of discontinuance, sale or transfer of the business, the restricted distributor shall notify the director in writing at least ten days before the discontinuance, sale or transfer takes effect. If the restricted distributor sells or transfers the business, the restricted distributor shall include the name and address of the purchaser or transferee in the notice to the director. H. A person who is required to be licensed as a restricted distributor of motor vehicle fuel pursuant to this section and who fails to obtain a license is guilty of a class 1 misdemeanor. 28-5626. Suppliers; vendors; licenses required A. Except as provided in section 28-5607, a person who acts as a distributor and who possesses motor fuel on which fuel taxes have not been accrued or collected by a supplier shall be licensed as a supplier. B. It is unlawful for a person to engage in business in this state as a supplier, unless the person has a license issued by the director to engage in that business. C. A person who sells use fuel for delivery directly into a vehicle fuel tank shall also be licensed as a vendor and shall maintain separate business records. 28-5627. License application A. To obtain a license, a supplier shall file with the director an application under oath and in the form the director prescribes including: 1. The name under which the supplier will transact business in this state. 2. The location and address of the supplier's principal office or place of business in this state. 3. The name and complete residence address of either: (a) The owner. (b) The partners, if the supplier is a partnership. (c) The principal officers, if the supplier is a corporation or association. 4. If the supplier is a corporation or association organized under the laws of another state, territory or country, a certified copy of the certificate of license issued by the corporation commission showing that the corporation or association is authorized to transact business in this state. 5. A bond of the character stipulated and in the amount provided for in section 28-5631. 6. A filing fee of fifty dollars. 7. Other information the director requires. B. A person who desires to precollect the tax imposed by this article as a supplier and who is a permissive supplier may obtain a permissive supplier's license by filing an application as prescribed in subsection A of this section. Application for or possession of a permissive supplier's license does not in itself subject the applicant or licensee to the jurisdiction of this state for any purpose other than administration and enforcement of this article. C. The director shall not issue a license unless the application is accompanied by the required bond or evidence that the bond exists. D. The director shall keep and file all applications and bonds with an alphabetical index of the applications and bonds and a record of all licensed suppliers. 28-5628. Refusal to issue license If an application for a license to transact business as a supplier in this state is filed by a person whose license has previously been cancelled for cause by the director or if the director is of the opinion that the application is not filed in good faith or that the application is filed by some person as a subterfuge for a real person in interest whose license or registration has previously been cancelled for cause by the director and after a hearing, the director may refuse to issue a license to transact business as a supplier in this state. The director shall give the applicant five days' notice in writing of the hearing. The applicant may appear in person or by counsel and present testimony. 28-5629. License issued If the application is in proper form and has been accepted for filing, if the filing fee is paid and if the bond is accepted and approved, the director shall issue to the supplier a license to transact business as a supplier in this state, subject to cancellation as provided by law. 28-5630. License; assignability; display; duplicates A. A license issued to a supplier under section 28-5629: 1. Is not assignable. 2. Is valid only for the supplier in whose name it is issued. 3. Shall be displayed conspicuously in the principal place of business of the supplier in this state. B. A licensee shall obtain a duplicate license for each established branch office or location for a fee of five dollars and shall display the duplicate license in the same manner as the original license displayed in the licensee's principal place of business. 28-5631. Bonds; amount; failure of security A. A supplier shall file a bond with the director on a form approved by the director with a surety company authorized by the Arizona corporation commission to transact business in this state as surety on the bond. The supplier shall be the principal obligor, and this state shall be the obligee on the bond. The bond shall be conditioned on the prompt filing of true reports and the payment by the supplier to the director of all motor fuel taxes that are levied or imposed by this state, together with all penalties and interest on the taxes, and generally on faithful compliance with this article. B. The director shall fix the total amount of the bond required of a supplier and may increase or reduce the amount at any time, subject to the limitations provided in this article. In fixing the total amount of the bond required of a supplier, the director shall require a bond in an amount equal to two times the director's estimate of the supplier's monthly tax, determined in a manner the director deems proper. The total amount of the bond required of a supplier shall be at least five thousand but not more than five million dollars. C. A supplier may request in writing that the director return, refund or release a bond required pursuant to this section. The director may return, refund or release a bond if the director determines that the supplier has continuously complied with this article for at least the previous three consecutive years. If the director determines that the return, refund or release of the bond would jeopardize state revenues, the director may elect to retain the bond or may reimpose a requirement for a bond. A person who is aggrieved by a decision of the director pursuant to this subsection may request a hearing pursuant to section 28-5924. D. If liability on the bond filed by the supplier with the director is discharged or reduced or if in the opinion of the director a surety on the bond given has become unsatisfactory or unacceptable, the director may require the supplier to file a new bond with satisfactory sureties in the same amount. If the supplier fails to file a new bond as required, the director shall cancel the license of the supplier immediately. If the new bond is furnished by the supplier, the director shall cancel and surrender the bond for which the new bond is substituted. E. If on a hearing, of which the supplier was given five days' notice in writing mailed to the supplier's last known address, the director decides that the amount of the existing bond is insufficient to ensure payment to this state of the amount of the tax, penalties and interest for which the supplier is or may become liable, the supplier, on the written demand of the director, shall immediately file an additional bond in the same manner and form with a surety company on the bond approved by the director in an amount determined by the director as necessary to secure at all times payment by the supplier of all taxes, penalties and interest due under this article. If the supplier fails to file an additional bond as required, the director shall cancel the license of the supplier immediately. F. A surety on a bond furnished by a supplier shall be released and discharged from all liability to this state accruing on the bond on the last day of the month that includes the sixtieth day after the date on which the surety files with the director a written request to be released and discharged. The request does not relieve, release or discharge the surety from liability already accrued or from liability that accrues before the last day of the month that includes the end of the sixty day period. On receipt of notice of the request, the director shall promptly notify the supplier who furnished the bond and shall cancel the license of the supplier immediately, unless the supplier, on or before the last day of the month that includes the end of the sixty day period, files with the director a new bond with a surety company satisfactory to the director in the amount and form provided in this section. If the new bond is furnished by the supplier, the director shall cancel and surrender the bond for which the new bond is substituted. G. This section does not relieve a supplier of the supplier's duty to file the verified monthly report required by this article. 28-5633. License cancellation A. The director may immediately cancel the license of a supplier and notify the supplier in writing of the cancellation by certified mail, mailed to the last known address of the supplier appearing in the files of the department, if the supplier either: 1. Files a false report of data or information required by this article. 2. Fails, refuses or neglects to file a monthly report or any other report required by this article. 3. Fails, refuses or neglects to pay the full amount of the tax required by this article or section 28-8344. B. The director may cancel a license that is issued to any supplier and that becomes effective sixty days after the date of receipt of the written request of the supplier for the cancellation. The director shall not cancel a license on request of a supplier unless the supplier pays, before the date of the cancellation, all taxes payable under this article or section 28-8344 and all penalties and fines accruing by reason of the supplier's failure to make accurate reports as required by this article or to pay the taxes or penalties. C. The director may cancel the license of a supplier on investigation and sixty days' notice mailed to the last known address of the supplier if the director determines that the person to whom the license has been issued is no longer engaged in the business of a supplier and has not been engaged in the business of a supplier for six months before the cancellation. 28-5634. Bond cancellation If the license of a supplier is cancelled by the director pursuant to section 28-5633 and if the supplier has paid all taxes due and payable by the supplier as required by this article or section 28-8344 on the receipt, sale or use of motor vehicle fuel or aviation fuel and has paid all interest and penalties accruing by reason of the supplier's failure to make accurate reports or to pay the tax and interest and penalties, the director shall cancel and surrender the bond filed by the supplier. 28-5635. Discontinuance, sale or transfer of business; violation; classification A. When a supplier ceases to engage in business as a supplier in this state and discontinues, sells or transfers the business: 1. The supplier shall notify the director in writing at least ten days before the discontinuance, sale or transfer takes effect. The notice shall give: (a) The date of discontinuance, sale or transfer of the business. (b) The name and address of the purchaser or transferee of the business. 2. All taxes, penalties and interest not then due and payable under this article or section 28-8344 are due and payable concurrently with the discontinuance, sale or transfer. Concurrent with the discontinuance, sale or transfer, the supplier shall: (a) Make a report. (b) Pay all taxes, interest and penalties. (c) Surrender to the director the license issued to the supplier by the director. B. Unless the notice is given to the director, the purchaser or transferee is liable to this state for the amount of all taxes, penalties and interest accrued under this article or section 28-8344 against the supplier who is selling or transferring the supplier's bu