The Maryland motor fuel tax is a per-gallon charge on gasoline, diesel, and other motor fuels sold or used in the state, and the combined rate resets every July 1 based on inflation. For the fiscal year that began July 1, 2024, the combined rate is 46.10 cents per gallon for gasoline and 46.85 cents per gallon for diesel.1Comptroller of Maryland. Motor Fuel Tax Rates Effective July 1, 2024 Consumers don’t file anything; licensed dealers, distributors, and special fuel sellers remit the tax to the Comptroller of Maryland, and the cost is built into pump prices.
Current Rates and Annual Adjustment
Three components stack into the per-gallon rate. The base rate set as of June 30, 2013 is 23.50 cents for gasoline and 24.25 cents for diesel. A fixed sales-and-use-tax-equivalent charge of 14.00 cents applies to all fuel types. On top of those sits a cumulative Consumer Price Index adjustment that the Comptroller recalculates each year under Section 9-305 of the Tax-General Article, with the updated combined rate announced by June 1 and taking effect July 1.2Maryland General Assembly. Maryland Code Tax-General 9-305 – Tax Rates
For FY 2024, the CPI cumulative effect adds 8.60 cents per gallon. Propane, compressed natural gas, and E-85 share the same combined gasoline rate. Aviation gasoline and turbine fuel are treated separately at a flat 7.00 cents per gallon with no CPI or SUTE component.1Comptroller of Maryland. Motor Fuel Tax Rates Effective July 1, 2024 Because the rate moves every July, verify the current figure on the Comptroller’s site before calculating liability for a new fiscal year.
Who Pays and Who Files
Motor fuel tax isn’t charged at the register the way sales tax is. Licensed dealers, distributors, and special fuel sellers pay the Comptroller based on the gallons they sell or use, and the tax passes through to the retail price. The Comptroller registers petroleum transporters, service stations, and bulk storage facilities so the entire supply chain is accounted for.3Comptroller of Maryland. Motor Fuel Tax Reports
Exemptions and Refund Claims
Section 9-303 of the Tax-General Article exempts several categories of fuel from the tax:
- Motor fuel sold for export out of Maryland.
- Dyed special fuel sold for off-highway purposes.
- Special fuel delivered into a tank used only for heating.
- Fuel bought by the Department of General Services for state agencies, county boards of education, and units of the U.S. government.
- Aviation fuel bought by common carriers operating under Parts 121, 127, and 129 of the Federal Aviation Regulations, by the state or its political subdivisions, by instrumentalities of the U.S. government, or by foreign governments.4Maryland General Assembly. Maryland Code Tax-General 9-303
Private nonprofit organizations do not have a blanket motor fuel tax exemption under Maryland law, even if they qualify as tax-exempt under federal law. Contact the Comptroller’s office if you think a specific use qualifies.
If you paid the tax on fuel that ended up used for a non-taxable purpose (common examples include agricultural production, off-highway equipment, and commercial marine operations), you can file for a refund on Comptroller Form 706. You certify under penalty of perjury that the tax was paid, the fuel was used for a non-taxable purpose, and no part of the refund has already been paid.5Comptroller of Maryland. Maryland Motor Fuel Tax Form 706 Refund Claim Form Instructions Keep the purchase receipts, invoices, and usage records. Claims are subject to audit, deadlines apply, and fuel that qualifies for a motor fuel tax refund may still owe Maryland sales and use tax.
A separate federal fuel tax credit is available on IRS Form 4136 for non-highway business uses like farming, commercial fishing, school buses, and exclusive use by state or local governments. It does not cover personal vehicles, commuting, or recreational equipment.6Internal Revenue Service. href=”https://www.irs.gov/instructions/i4136″ target=”_blank” rel=”noopener”>Instructions for Form 4136 and Schedule A (2025)
Licenses and Bonds for Fuel Businesses
If you import, export, distribute, or sell motor fuel in Maryland, you need a license from the Comptroller. The license classes each authorize specific activities:
- Class A: importing, exporting, and acquiring gasoline on which the tax has not yet been paid.
- Class B: importing untaxed gasoline for personal use or redistribution.
- Class C: acquiring untaxed gasoline from a Comptroller-approved supplier and exporting it.
- Class W: operating as a fuel distributor in Maryland.7Maryland General Assembly. Maryland Code Tax-General 9-322 – Scope of License and Exemption Certificate
Each class limits what you can do, so applying under the wrong one means operating outside your authorization. Licensees also post a surety bond as a financial guarantee of tax payment. Losing the bond means losing the license.
Certain activities also require federal registration on IRS Form 637, including refiners, terminal operators, pipeline operators, fuel blenders, and producers of alternative fuels and biofuels. Businesses in those categories need both the Maryland license and the federal registration.8Internal Revenue Service. Form 637 Application for Registration (For Certain Excise Tax Activities)
Monthly Returns and Recordkeeping
Every licensed dealer, special fuel seller, special fuel user, and turbine fuel seller files a monthly motor fuel tax return, completed under oath, for each month in which they sell or use fuel in Maryland.9Maryland General Assembly. Maryland Code Tax-General 9-308 – Returns The return details gallons sold, the applicable rates, and total tax owed. Purchase invoices and sales receipts have to back up every figure, because the Comptroller can audit at any time.
Records must be kept at least four years and produced for inspection on request. Most audit trouble starts with incomplete records. A single missing invoice from two years back can escalate into a deficiency assessment far larger than the underlying tax. Businesses running electronic logging devices or GPS tracking should preserve the raw data, not just distance summaries; if gaps exist, paper trip sheets, dispatch records, and fuel receipts have to fill them.
IFTA for Interstate Carriers
Maryland-based carriers running vehicles across state lines also need to comply with the International Fuel Tax Agreement. IFTA covers any vehicle with two axles and a gross weight over 26,000 pounds, any vehicle with three or more axles regardless of weight, and any combination exceeding 26,000 pounds that operates in two or more member jurisdictions (all 48 contiguous states and the Canadian provinces).10IFTA, Inc. Carrier Information
Registration goes through the Comptroller’s Motor Fuel Tax office online. Review takes about two weeks, and approved carriers receive decals and a license by mail. If another jurisdiction has suspended or denied your IFTA decals, Maryland won’t issue new ones without a written release.11Comptroller of Maryland. IFTA Information
Quarterly returns are due the last day of the month after each quarter: April 30, July 31, October 31, and January 31. File every quarter, even ones with zero activity. A minimum $50 penalty is automatic on any late return, and failing to file or reporting estimated numbers can trigger an assessment based on 40 gallons of fuel per vehicle per day. Trip records must show beginning and ending dates, origin and destination, route, odometer readings, total distance, and distance in each jurisdiction. Fuel purchase records must show date, seller, quantity, fuel type, price per gallon, and the specific vehicle fueled. Prepaid receipts and unitemized credit card statements don’t count.
Dyed Diesel Restrictions
Dyed diesel is colored to mark it as untaxed and limited to off-highway uses like farming, heating, and stationary equipment. Running it in any vehicle on public roads is illegal under both federal and Maryland law, and enforcement is active.
Federal law requires a conspicuous notice at every pump or delivery point selling dyed diesel: “DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE.” Sellers who don’t post it are presumed to know the fuel will be used for a taxable purpose.12eCFR. 26 CFR 48.4082-2 – Diesel Fuel and Kerosene; Notice Required for Dyed Fuel The federal penalty under 26 U.S.C. ยง 6715 is the greater of $1,000 or $10 per gallon involved, with repeat violations multiplied by the total number of prior offenses.13Office of the Law Revision Counsel. 26 USC 6715 – Dyed Fuel Sold for Use or Used in Taxable Use
Maryland stacks its own consequences on top. Using dyed diesel on a highway is a misdemeanor punishable by a fine up to $1,000, up to one year in jail, or both. The Comptroller can also impose an administrative penalty of $1,000 or $10 per gallon, whichever is greater, for a first violation, multiplied by the total number of violations for repeat offenses.
Penalties for Late or False Filings
Late payment carries a penalty of up to 10% of the unpaid tax, plus interest that accrues from the original due date until the balance clears. The rate is set annually and has historically run near 10.5%.14Maryland General Assembly. Maryland Code Tax-General 13-701 A pattern of late payments also draws audit attention and can put your license at risk.
The Comptroller can pursue collection through liens on a taxpayer’s property, which can block sales, financing, or business operations until the debt is satisfied. Willful evasion and fraud are criminal. Filing a false refund claim is a misdemeanor and, depending on severity and amount, can bring fines and imprisonment. Cases typically involve fabricated purchase records, fictitious refund claims, or systematic underreporting of taxable gallons.
Federal Taxes That Stack on Top
Federal excise tax adds 18.4 cents per gallon on gasoline and 24.4 cents on diesel, rates unchanged since 1993, collected higher up the supply chain and baked into pump prices.15U.S. Energy Information Administration. Many States Slightly Increased Their Taxes and Fees on Gasoline in the Past Year Operators of heavy highway vehicles with a taxable gross weight of 55,000 pounds or more owe the Heavy Highway Vehicle Use Tax on IRS Form 2290, assessed by weight rather than gallons burned. Vehicles expected to travel 5,000 miles or less (7,500 for agricultural vehicles) during the tax period can claim a suspension.16Internal Revenue Service. About Form 2290, Heavy Highway Vehicle Use Tax Return Between Maryland’s motor fuel tax, federal excise tax, IFTA, and the heavy vehicle use tax, fuel-dependent businesses in the state juggle several overlapping filing calendars.