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Paying Fuels Tax

Motor fuel is taxed when leaving the terminal rack. Alternative fuel is taxed when it is placed into a highway vehicle. Generally, suppliers and providers of alternative fuel are responsible for collecting and remitting the tax to DMV.

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Who pays the tax to whom?

Depending on the type of license you hold, you may pay the fuel tax directly to DMV or to the person from whom you purchased the fuel. The following chart lists who the taxes are paid to by license type.

License Type Taxes Are Paid To
Aviation Consumer
  • Fuel purchased from a supplier or a licensed distributor -- pay to Virginia DMV
  • Fuel purchased from another aviation
    consumer -- pay the other aviation consumer
  • Fuel sold to another aviation consumer -- pay Virginia DMV
Blender Virginia DMV
Bulk User of Alternative Fuel
  • Bonded bulk users who choose to defer the tax -- pay DMV
  • All other bulk users -- pay the alternative fuel provider
Distributor The supplier
Exporter The supplier or distributor
Importer
  • Fuel imported into Virginia from bulk storage -- pay Virginia DMV
  • Fuel imported into Virginia from a terminal -- pay the supplier
Provider of Alternative Fuel Virginia DMV
Retailer of Alternative Fuel
  • Bonded retailers who choose to defer the tax -- pay DMV
  • All other retailers -- pay the alternative fuel provider
Supplier
  • Virginia DMV
  • Tax paid receipt -- pay to supplier

When is the tax due to DMV?

Taxes are due the second month following the month the fuel was sold, purchased, or imported. The payments must be either postmarked by the 15th, or received by DMV by the 20th.

Exception: Taxes owed on May sales, purchases, and imports are due in June. The payments must be either postmarked by the 25th of June, or received by DMV by the last business day DMV is open for business in June.

When is the tax due to the supplier/alternative fuel provider?

  • Licensed distributors and importers must pay the tax to the supplier by the 20th day of the second month following the month the fuel was purchased.
  • Licensed alternative fuel bulk users and retailers, who have chosen to defer the tax, must pay the tax to the alternative fuel provider by the 20th day of the second month following the month the fuel was purchased. Exception: Taxes on May purchases are due in June. The payments must be made to the supplier/provider by the last day DMV is open for business in June.

What happens if the payment is late?

If taxes are not paid on time, DMV will impose penalties and interest.

What happens if the taxes are not paid?

DMV may submit a claim against the bond of any person who fails to pay the tax to DMV or against the bond of any bonded licensee who fails to pay the tax to the supplier/alternative fuel provider. If the bond does not fully cover the amount of taxes owed, other collection actions will be taken. Additionally, DMV may cancel the Virginia Fuels Tax License.

Are there tax-exempt sales?

Exemptions are provided for:

  • federal, state and local governments,
  • nonprofit charitable organizations [under the IRS code 501 (c)(3)] which are organized and operated exclusively for the purpose of providing charitable, long-distance, advanced life-support air ambulance services for low-income medical patients,
  • bonded aviation jet fuels,
  • dyed diesel fuels, and
  • heating oil.

What are the payment options?

DMV accepts Automated Clearinghouse (ACH) credits and debits, checks, cash and money orders. All payments are required to be submitted with a Fuels Tax Payment Form (FT 474).

Payments are also accepted online. Online payments eliminate the need to submit the Fuels Tax Payment Form (FT 474) and are fast and easy. For more information on making ACH payments, refer to "Automated Clearing House Payment Options" (DMV 225). If you are already set-up to make ACH payments or would like to pay using the e-check option, you can pay online.