What situations may qualify
In Kentucky, there are specific statutory and regulatory provisions allowing refunds or credits of motor-fuel or special-fuel taxes when the fuel was used in non-highway or exempt ways. Key examples:
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Under Kentucky Revised Statutes § 138.344: Fuel tax paid on gasoline or special fuels used in stationary engines, tractors for agricultural purposes, or “unlicensed vehicles or equipment for nonhighway purposes” may be refunded.
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At the federal level, the Internal Revenue Service (IRS) allows a fuel-tax credit when fuel is used for off‐highway business use (for example, equipment operating on private property, not registered for public roads).
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Over-payment/credit for motor‐carriers: The Kentucky Transportation Cabinet has a form for “Tax Overpayment / Credit Refund Application” for motor-carrier taxes.
So for trucking operations or fleets, if you have fuel usage that was exempt (e.g., reefer fuel when the vehicle is off‐road, equipment not registered for highway use, or special fuel used in non-registered unit) then you may qualify for refund or credit.
Step-by-step: How to claim
Here’s how to go about it, in practical steps:
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Identify the exempt/nonhighway use
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Determine that the fuel in question was used for a purpose that is not subject to the highway motor-fuel tax (for example: non-licensed equipment, off‐road usage, stationary engine, agricultural tractor).
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Ensure you maintain documentation distinguishing highway vs off-highway use. The IRS guidance indicates that for “off-highway business use” the vehicle must be non-registered for highway use (among other criteria).
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In Kentucky, verify that the statute applies: KRS 138.344 refers to “unlicensed vehicles or equipment for nonhighway purposes”.
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Gather documentation
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Purchases of fuel showing amount, gallons, cost, tax paid.
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Equipment/vehicle registration status (e.g., “unlicensed” or off-road equipment).
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Records of usage (how many gallons used, for what equipment/operation, when).
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For motor-carrier credits/refunds: your carrier license, DOT number, KY registration, etc. (see the credit/refund form from KY Transportation Cabinet).
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Retain records for the time period required (some statutes mention multi‐year audit ability).
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Select correct form & submit
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For general fuel tax refunds in Kentucky: Under KRS 138.344 you apply for “refund of tax paid on gasoline or special fuels … used in unlicensed vehicles or equipment for nonhighway purposes”.
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For motor-carrier overpayment/credit: Use Form TC 95-640 (Tax Overpayment / Credit Refund Application) of the KY Transportation Cabinet.
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Fill the form completely, sign it, provide supporting documentation, mail or email as directed. The form indicates it may take up to 90 days for processing.
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Mind the deadlines and audit risk
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Kentucky statutes require that “applications and all necessary information are filed … on forms and in the manner prescribed … on a calendar quarter or calendar year basis” for certain refund claims.
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For motor carriers: the form warns that all refund requests are subject to audit and must maintain books and records for at least four years from date of refund.
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If you delay, you could lose the refund or face disallowance.
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Wait for processing, receive credit/refund
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Once approved, you’ll receive either a check or a credit (depending on the program) for the amount of tax overpaid or eligible for refund.
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Be sure to adjust your accounting so you do not double-claim or later treat the refunded amount as taxable income incorrectly.
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Key pitfalls & best practices
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Claiming highway use as off-road: If a vehicle is registered and primarily used on public highways, you likely won’t qualify under the off-road nonhighway provisions (e.g., IRS says the vehicle must not be required to be registered for highway use).
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Poor documentation: Without clear records of gallons used, equipment status, dates and purpose, the claim may be denied or audited.
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Mixing uses: If part of the fuel was used on highways and part off-road, you’ll need to allocate usage and claim only the exempt portion.
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Time limits: If you wait too long to file for the refund/credit, you may lose eligibility.
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Maintain compliance for other taxes: Even if you get a refund, you still must properly file other required fuel, excise or motor-carrier tax returns.
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Professional tax advice: These issues can get complex—especially for large fleets, interstate carriers, or specialized equipment. Consulting with a tax professional familiar with motor‐fuel tax law in Kentucky is wise.
Summary checklist for trucking/fleet operators in Kentucky
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Identify fuel usage that may qualify for exemption/refund (off-road, stationary, unlicensed equipment).
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Document gallons purchased, tax paid, equipment/vehicle identification, purpose.
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Determine the correct claim form (e.g., KRS 138.344 refund form, or TC 95-640 for motor-carrier credit).
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Submit the claim with full documentation, signed, to the correct agency.
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Retain records for audit (at least 4 years for motor-carriers).
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Ensure you weren’t already claiming the same fuel for a different credit or deduction.
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Adjust your accounting once refund/credit is received.