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Fishing Fuel Tax Credit

A fisherman may be eligible to claim a credit or refund of excise tax paid on fuel used in certain boats.

Commercial Fishing Boats

Boats used in commercial fishing include only watercraft used in taking, catching, processing, or transporting fish, shellfish, or other aquatic life for commercial purposes, such as selling or processing the catch, on a specific trip basis. They include boats used in both fresh and salt-water fishing.

Boats used for both sport fishing and commercial fishing on the same trip are not included. Fuel used in aircraft to locate fish is not fuel used in commercial fishing.

Fuel

Gasoline - A credit or refund may be allowed for gasoline used for supplies for vessels/boats used in commercial fishing.

Special Motor Fuels - A credit or refund may be allowed for special motor fuels used for supplies for vessels and boats used in commercial fishing. Special motor fuels generally include any liquid other than gasoline, diesel fuel, kerosene, gas oil, or fuel oil.

Compressed Natural Gas (CNG) - A credit or refund may be allowed for CNG used for supplies for vessels and boats used in commercial fishing.

Diesel Fuel - A credit or refund may be allowed, depending on the type of diesel fuel used:

  • Undyed - A credit or refund is allowed for tax paid on undyed diesel fuel that is used for a nontaxable purpose.
  • Dyed - No credit or refund is allowable for the use of dyed diesel fuel since this fuel is purchased tax-free.

Reminder: If you use the cash method of accounting, the amount of the fuel tax credit reported on your last year's tax return must be reported as income on your current return.

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Page Last Reviewed or Updated: 04-Mar-2014