Paying Road-Tax and Use-Tax for WVO in Kansas …

I am trying to figure out how to pay necessary road-tax and use-tax for WVO as a Kansas resident.  I’ve been tracking consumption so that I can begin reporting this.  It sounds like Federal taxes will be 24.4c/gal and State taxes will be 26.0c/gal. My consumption for approx 19 gallons in 02/2009 would cost $9.58, but I can’t send in a payment until I complete several applications.

Federal – It seems I need to complete IRS Form 637 (Application for Registration for Certain Excise Tax Activities) with activities “AL” and “AM” first.  Once approved, I would complete IRS Form 720 (Quarterly Federal Excise Tax Return) and submit the form with payment shortly after the end of each quarter.

State of Kansas – I assume I need to register with the state before I can pay use tax, but I haven’t determined how to do this yet.  Once registered, I would complete Kansas Form MF-54 (Producer/Manufacturer, Blender, End Consumer Motor Fuel Tax Report) and submit the form with payment shortly after the end of each month.

Several online discussions lead me to believe I can qualify for the IRS 50c/gal to $1/gal credit for the sale of SVO as a bio-fuel.  My understanding is that this must be performed by a company, not an individual.  I’m working to establish a company that can handle collection, record keeping and filtering of all the WVO for several of us who are needing WVO.  We would probably need to buy WVO from the company at some minimal per gallon rate.  The train of thought is that the credits should cancel out the road tax and keep everything on the up and up.  I’m expecting a lot of local public exposure and need to have this issue under control.  Will post updates as I make progress on this.  Will continue to record consumption in the meantime so that I can settle up when I am allowed to begin making payments.

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