A power take-off generally is a splined shaft on a gearbox, separate from the propulsion or drive shaft, that can be used to power attached auxiliary equipment or a separate machine. A power take-off provides a second power output from the engine that is not used to propel the motor vehicle. Auxiliary equipment operated by a motor vehicle's power take-off can be found on boom trucks, bulk-feed trucks, cement mixers, asphalt-distribution trucks, dump trucks, fire trucks, lime spreaders, aerial-lift trucks, milk-tank trucks, mobile cranes, refrigeration trucks, sanitation trucks, spray trucks, and wreckers, among others. Power take-offs are commonly found on farm tractors and on many lawn tractors.
What is not considered to be auxiliary equipment run by a power take-off?
Engine-driven equipment that is used as an integral part of a vehicle's operation, including alternators, generators, air-conditioner compressors, hydraulic pumps for power steering and brakes, fuel-injection pumps, superchargers, and other similar equipment, is not considered to be auxiliary equipment for purposes of calculating power take-off fuel usage.
What is power take-off fuel use?
This is the fuel withdrawn from the propulsion tank of the motor vehicle that is used to operate auxiliary equipment via the power take-off. It is often stated as a percentage of the total amount of fuel that is withdrawn from the propulsion tank.
Should motor fuel tax be refunded for motor fuel consumed in operating an air-conditioner compressor on a motor vehicle?
No. While some states impose motor fuel tax on fuel used to propel motor vehicles on state highways, Kansas imposes the tax on fuel used in motor vehicle operations on state highways. Fuel used to run a compressor that operates as part of a air conditioning or climate control system is fuel used in the motor vehicle's operations on Kansas highways within the meaning of the motor fuel imposition and refund statutes.
The Kansas motor fuel use tax is imposed on "motor fuel used in operations on highways within this state by such interstate motor fuel user." See K.S.A. 79-34,109(a). Safe highway operation requires alternators, generators, air-conditioner compressors, hydraulic pumps for power steering and brakes, fuel-injection pumps, and other similar equipment to be operated to defog windows, provide for driver and passenger comfort, allow for reasonable steering effort, provide for lights and braking, clear windshields, provide needed engine power, and so forth. The fuel use attributable to powering this equipment is "motor fuel used in operations on highways within this state" even though the fuel is not used to propel a vehicle down the road. None of the tax paid on fuel consumed to run this equipment is subject to refund as having been purchased for a purpose "other than operating motor vehicles on public highways." See K.S.A. 79-3453; Q & A on Motor Fuel User Idle Time Refunds.
Taxpayers may apply for a refund through the motor fuel refund section if records are included to support the amount of fuel being claimed for a refund.
A legitimate record is determined through a system that measures actual PTO usage including, but not limited to, a test period of operations to calculate the amount of fuel used by the PTO. Flat percentages may be allowed and reported when the adopted system is based on percentages arrived at during the test period. Once a system has been accepted, the carrier may claim credits for PTO usage from that time forward. Credits will not apply to previous periods.
IDLE TIME INFORMATION:
Is an interstate motor fuel user entitled to any refund under K.S.A. 79-3454 for taxes paid on fuel consumed while its vehicles are stopped and idling off-highway in Kansas? Are refunds permitted under K.S.A. 79-3453 when all of the fuel use tax reported under K.S.A. 79-34,109(a) was for fuel "used in [an interstate motor fuel user's] operations … on highways within this state"?
No to both questions. Motor carriers pay fuel tax at the pump (or on the purchase of fuel in bulk), but they also pay fuel use tax to each state based on how much fuel they consume in their travels in the state. This is done through quarterly IFTA tax reports that detail the distance a carrier traveled in a state, the amount of fuel it purchased in the state tax-paid, and the overall miles-per-gallon of its fleet. From this the carrier calculates the fuel it used in the state and takes credit for any state fuel tax it paid on fuel purchases during the quarter. It then pays the state any additional tax owed or receives a credit if tax was overpaid. The fuel use tax is largely a mechanism for redistributing fuel tax to compensate for carriers' differential fueling among states, caused by patterns in freight movement, and for differences in state tax rates.
The amount of tax paid to Kansas on idle time fuel consumed in Kansas while stopped cannot be determined by using the mileage formula in K.S.A. 79-34,109(a) and the details on an IFTA quarterly report alone. This formula does not contemplate making any adjustments to the tax being reported because of idle time fuel consumption.
K.S.A. 79-34,109(a) codifies a mileage formula that determines the taxable "[n]umber of gallons used in the [interstate motor carrier's] operations … on highways within this state." Since the formula is a legal construct that establishes the taxable number of gallons used in a carrier's Kansas highway operations, none of the fuel use tax accounted for by a carrier can qualify for refund as having been paid for some purpose "other than operating motor vehicles on the public highways" under K.S.A. 79-3453.
Discussion: In 1994, Congress enacted legislation mandating that, after September 30, 1996, states may enforce their motor fuel use reporting requirements only if those requirements conform to the International Fuel Tax Agreement [IFTA]. 49 USC Sec. 31705 (2000). The goal of IFTA is the uniform administration of motor fuel tax reporting by motor carriers that operate in the United States and Canada. See IFTA Article I(B). While IFTA's goal is uniform reporting, each member jurisdiction determines the rates, coverage, and exemptions for the tax on motor fuel use by interstate and international motor carriers. See IFTA Article IIIA. Kansas entered into the agreement in 1992.
IFTA's uniform reporting requirements govern the reporting of Kansas motor fuel use by interstate motor carriers that operate in Kansas. See K.S.A. 79-34,165. This fuel use is taxed at K.S.A. 79-34,109(a):
There is hereby imposed on each interstate motor fuel user a tax on motor fuel used in operations on highways within this state by such interstate motor fuel user. . . . The number of gallons of motor fuel used in the operations of any interstate motor fuel user on highways within this state shall be deemed to be such proportion of the total number of gallons of such motor fuel used in its entire operations within and without this state, as the number of miles traveled on highways within this state bears to the total number of miles traveled within and without this state. (Underlining provided.)
This statute codifies a formula that determines the taxable "number of gallons of motor fuel used in the operations of any interstate motor fuel user on highways within this state." Fuel consumed while a vehicle is stopped and idling does not affect the amount of fuel reported under the formula. This is because mileage determines the taxable gallons of fuel use. Mileage does not change when a vehicle is stopped and idling, wherever the idling occurs. Consequently, the taxable fuel use being reported does not change because of fuel consumed while idling.
Under the formula, any allowance for an interstate motor carrier's off highway use in Kansas must be based on the number of miles that the carrier travels off-highway in Kansas. When a carrier determines the ratio of Kansas highway miles to the total miles traveled within and without the state, the off-highway Kansas miles can be included as part of the ratio's denominator to reduce the number of taxable Kansas gallons being reported.
The mileage formula is a legal construct that provides interstate motor carriers with a uniform method for reporting their taxable fuel use. The construct establishes "[t]he number of gallons of motor fuel used in the operations of any interstate motor fuel user on highways within this state." Accordingly, any change to the taxable result must come from changes to the number of Kansas highway miles, the number of total miles, or the number of gallons that are entered in the formula. The formula's result is not changed by the fact that an interstate motor carrier may have consumed fuel while stopped and idling off-highway in Kansas. These gallons are already included in the formula as part of the "total number of gallons of … motor fuel used in [the interstate motor carrier's] entire operations within and without this state."
K.S.A. 79-3453 through K.S.A. 79-3464 deal with motor fuel refunds. K.S.A. 79-3453 extends the refund entitlement:
Any person who uses any motor-vehicle fuels or special fuels on which the motor-fuel or special fuel tax has been paid . . . for any purpose other than operating motor vehicles on the public highways, such person shall be entitled to be refunded the tax paid upon complying with the requirements of this act . . . . (Underlining added). K.S.A. 79-3453.
K.S.A. 79-3454 requires that before a refund claim is made, each person who wants to be eligible for a refund must apply for a refund permit. The applicant is required to list "the uses to which the applicant intends to put such motor-vehicle fuel or special fuel upon which a refund will be claimed." If the fuel use is for farming, manufacturing, or industrial processing, the applicant must support the claim with additional information, such as the number of acres under cultivation, or the nature and kind of the manufacturing or industrial processing. Any incidental highway use of farm equipment and other motor vehicles that are "primarily designed or operated for non-highway use" is not taxed. K.S.A. 79-3463.
K.S.A. 79-3454 shows that taxes paid on fuel used in farming, manufacturing, and industrial processing qualify as having been paid for purposes "other than operating motor vehicles on the public highway." This is not the case with fuel that interstate motor carriers use for their carrier operations. K.S.A. 79-34,109(a) establishes the "[n]umber of gallons used in the [interstate motor carrier's] operations … on highways within this state." Thus, all of the fuel use tax that a carrier reports and pays under K.S.A. 79-34,109(a) is for the carrier's "operations … on highways within this state." None of this fuel use tax is subject to refund as having been paid for some purpose "other than operating motor vehicles on the public highways" under K.S.A. 79-3453.
Idling while stopped occurs both on highway as well as off highway. Idling on a highway occurs at stop lights, at interstate rest stops, at toll booths, while vehicles are stopped in traffic, along the side of the road, and at other similar locations. Idling off highway can occur at a warehouse, motel, restaurant, or similar location. The IFTA reporting formula is based on average miles per gallon, not on how much fuel use tax was remitted to the State of Kansas on fuel consumed during the time spent idling on-highway or off-highway