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H0661.........................................by TRANSPORTATION AND DEFENSE MOTOR FUEL - TAXATION - Amends and repeals existing law relating to taxation of motor fuels to provide that the tax liability for motor fuels is the responsibility of the receiving distributor; to authorize distributors to include an amount equal to the tax as part of the selling price; to provide the processes for remittance of fuel tax when the distributor, retailer or consumer is exempt from tax liability; to revise the process for claiming a deduction based on the number of gallons received by the distributor during a reporting period; to delete distributor deduction provisions relating to taxes previously paid on worthless accounts; to provide a condition for issuance of a distributor's license; to repeal the provision that motor fuel taxes are state money; and to provide severability. 02/13 House intro - 1st rdg - to printing 02/14 Rpt prt - to Transp
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 661 BY TRANSPORTATION AND DEFENSE COMMITTEE 1 AN ACT 2 RELATING TO TAXATION OF MOTOR FUELS; AMENDING SECTION 63-2402, IDAHO CODE, TO 3 PROVIDE THAT THE TAX LIABILITY FOR MOTOR FUELS IS THE RESPONSIBILITY OF 4 THE RECEIVING DISTRIBUTOR, TO AUTHORIZE DISTRIBUTORS TO INCLUDE AN AMOUNT 5 EQUAL TO THE TAX AS PART OF THE SELLING PRICE AND TO PROVIDE THE PROCESSES 6 FOR REMITTANCE OF FUEL TAX WHEN THE DISTRIBUTOR, RETAILER OR CONSUMER IS 7 EXEMPT FROM THE TAX LIABILITY; AMENDING SECTION 63-2407, IDAHO CODE, TO 8 REVISE THE PROCESS FOR CLAIMING A DEDUCTION BASED ON THE NUMBER OF GALLONS 9 RECEIVED BY THE DISTRIBUTOR DURING A REPORTING PERIOD AND TO DELETE DIS- 10 TRIBUTOR DEDUCTION PROVISIONS RELATING TO TAXES PREVIOUSLY PAID ON WORTH- 11 LESS ACCOUNTS; AMENDING SECTION 63-2427A, IDAHO CODE, TO PROVIDE A CONDI- 12 TION FOR ISSUANCE OF A DISTRIBUTOR'S LICENSE; REPEALING SECTION 63-2435, 13 IDAHO CODE, PROVIDING THAT MOTOR FUEL TAXES ARE STATE MONEY; AND PROVIDING 14 SEVERABILITY. 15 Be It Enacted by the Legislature of the State of Idaho: 16 SECTION 1. That Section 63-2402, Idaho Code, be, and the same is hereby 17 amended to read as follows: 18 63-2402. IMPOSITION OF TAX UPON MOTOR FUEL. (1) A tax is hereby imposed 19 upon thereceipt ofdistributor who receives motor fuel in this state.by any20distributor receiving motor fuel upon which the tax imposed by this section21has not previously been paidThe legal incidence of the tax imposed under this 22 section is borne by the distributor. The tax becomes due and payable upon 23 receipt of the motor fuel in this state by the distributor unless such tax 24 liability has previously accrued to another distributor pursuant to this sec- 25 tion. The tax shall be imposed without regard to whether use is on a govern- 26 mental basis or otherwise, unless exempted by this chapter. 27 (2) The tax imposed in this section shall be at the rate of twenty-five 28 cents (25¢) per gallon of motor fuel received. This tax shall be subject to 29 the exemptions, deductions and refunds set forth in this chapter.The tax30shall be paid by distributors upon the distributor's receipt of the motor fuel31in this state.32 (3) Nothing in this chapter shall prohibit the distributor who is liable 33 for payment of the tax imposed under subsection (1) of this section, from 34 including as part of the selling price an amount equal to such tax on motor 35 fuels sold or delivered by such distributor; provided however, that nothing in 36 this chapter shall be deemed to impose tax liability on any person to whom 37 such fuel is sold or delivered except as provided in subsection (6) of this 38 section. 39 (4) Any person coming into this state in a motor vehicle may transport in 40 the manufacturer's original tank of that vehicle, for his own use only, not 41 more than thirty (30) gallons of motor fuel for the purpose of operating that 42 motor vehicle, without complying with the provisions of this chapter. 43 (45) The tax imposed insubsection (1) ofthis section does not apply to: 2 1 (a) Special fuels that have been dyed at a refinery or terminal under the 2 provisions of 26 U.S.C. section 4082 and regulations adopted thereunder, 3 or under the clean air act and regulations adopted thereunder except as 4 provided in section 63-2425, Idaho Code; or 5 (b) Special fuel dispensed into a motor vehicle which uses gaseous spe- 6 cial fuels and which displays a valid gaseous special fuels permit under 7 section 63-2424, Idaho Code; or 8 (c) Special fuels that are gaseous special fuels, as defined in section 9 63-2401, Idaho Code, except that part thereof that is delivered into the 10 fuel supply tank or tanks of a motor vehicle; or 11 (d) Aircraft engine fuel subject to tax under section 63-2408, Idaho 12 Code. 13 (6) Should the distributor of first receipt be exempt from imposition of 14 the tax as a matter of federal law, by virtue of its status as a federally- 15 recognized Indian tribe or member of such tribe, such distributor shall not 16 bear the tax's legal incidence and must pass the tax through as part of the 17 selling price of the fuel. Such distributor shall retain the administrative 18 obligation to remit the tax, and such obligation shall accrue upon receipt in 19 accordance with subsection (1) of this section. Should a retailer otherwise 20 subject to the tax imposed under this subsection (6) be exempt from imposition 21 of the tax as a matter of federal law, by virtue of its status as a federally- 22 recognized Indian tribe or member of such tribe, the retailer shall not bear 23 the tax's legal incidence and must pass the tax through as part of the selling 24 price of the fuel to the consumer, unless such consumer is exempt from imposi- 25 tion of the tax as a matter of federal law, by virtue of its status as a 26 federally-recognized Indian tribe or membership in such tribe, and the 27 retailer shall be entitled to claim a credit against taxes otherwise due and 28 owing under this chapter or a tax refund, together with interest, attributable 29 to the fuel purchased by such consumer. 30 SECTION 2. That Section 63-2407, Idaho Code, be, and the same is hereby 31 amended to read as follows: 32 63-2407. DEDUCTIONS AUTHORIZED. Each licensed distributor shall deduct 33 from his monthly report: 34 (1) Motor fuel exported from this state other than in the supply tanks of 35 motor vehicles, motor boats or aircraft when supported by a shipping document, 36 an invoice signed by the purchaser, or other proper documents approved by the 37 commission but only if: 38 (a) The purchaser is not a licensed distributor and the seller can estab- 39 lish that any tax due in the jurisdiction to which the motor fuel is 40 destined is paid; or 41 (b) The purchaser is a licensed distributor in the jurisdiction to which 42 the motor fuel is destined. 43 (2) Motor fuel returned to a licensed distributor's refinery or pipeline 44 terminal storage when supported by proper documents approved by the commis- 45 sion. 46 (3) Motor fuel lost or destroyed by fire, lightning, flood, tornado, 47 windstorm, explosion, or other accidental casualty, after presenting to the 48 commission satisfactory proof of loss. 49 (4) The number of gallons which would be equal toonetwo percent (12%) 50 of the total number of gallons received during the reporting period, less the 51 total number of gallons deducted under subsections (1) through (3) of this 52 section, which credit is granted to the licensed distributor to reimburse him 53 forthe expense incurred on behalf of the state of Idaho in collecting and3 1remitting motor fuel tax moneys, maintaining necessary records for the state,2preparing necessary reports and remittances in compliance with this chapter,3and forloss from evaporation, handling, spillage and shrinkage, except losses 4 caused by casualty as provided in subsection (3) of this section.The licensed5distributor may, in addition to the above, deduct the number of gallons equal6to one percent (1%) of the total number of gallons received during the preced-7ing calendar month, less the total number of gallons deducted under subsec-8tions (1) through (3) of this section, to cover shrinkage, evaporation,9spillage and handling losses of a retail dealer. The latter deductions are to10be allowed only upon filing with the commission satisfactory evidence as may11be prescribed by it indicating the credit allowance has been made in favor of12the retail dealer or paid to him. The evidence shall be submitted together13with the report wherein this portion of the deduction is claimed. A licensed14distributor who sells and delivers motor fuel directly to the consumer and not15for resale shall, with respect to those sales, be deemed a retail dealer for16the purposes of this section.17 (5) Motor fuel sold to the Idaho national guard for use in aircraft and 18 in vehicles used off public highways provided, however, such deduction is sup- 19 ported by an exemption certificate signed by an authorized officer of the 20 Idaho national guard. 21 (6)For sales made on or after July 1, 1995, taxes previously paid on22gallons represented by accounts found to be worthless and actually charged-off23for income tax purposes may be credited upon a subsequent payment of the tax24provided in this chapter or, if no such tax is due, refunded. If such accounts25are thereafter collected, the tax per gallon shall be paid based upon the26amount actually received divided by the price per gallon of the original sale27multiplied by the appropriate tax rate.28(7)In the case of motor fuel received during the reporting period and 29 included in the report that is: 30 (a) Gasohol, deduct the number of gallons of denatured anhydrous ethanol 31 contained in the gasohol. 32 (b) Biodiesel, in whole or in part, deduct the number of gallons of agri- 33 cultural products or animal fats or the wastes of such products contained 34 in the fuel. 35 The deduction provided in this subsection shall not exceed ten percent (10%) 36 of (i) the volume of gasohol reported on the report or (ii) the special fuel 37 which is or contains biodiesel. 38 SECTION 3. That Section 63-2427A, Idaho Code, be, and the same is hereby 39 amended to read as follows: 40 63-2427A. DISTRIBUTOR'S LICENSE. (1) It is unlawful for a person to act 41 as a distributor without a license unless the person only purchases fuel which 42 is either or both: 43 (a) Motor fuel on which any tax due under this chapter has previously 44 been imposed upon a licensed distributor; or 45 (b) Dyed fuel upon which the transfer fee imposed in section 41-4909, 46 Idaho Code, has been imposed upon a licensed distributor. 47 (2) Application for a license shall be made upon forms furnished and in a 48 manner prescribed by the commission and shall contain information as it deems 49 necessary, and be accompanied by a bond in the amount required in section 50 63-2428, Idaho Code. 51 (3) Upon receipt of the application and bond in proper form the commis- 52 sion shall issue the applicant a license to act as a distributor unless the 53 applicant: 4 1 (a) Is a person who formerly held a license under the provisions of this 2 chapter, any predecessor statute, under the laws of any other jurisdic- 3 tion, or under the laws of the United States which license, prior to the 4 time of filing this application, had been revoked for cause within five 5 (5) years from the date of such application; or 6 (b) Is a person who has outstanding fuel tax liabilities to this state, 7 any other jurisdiction or the United States government; or 8 (c) Is a person who has been convicted, under the laws of the United 9 States or any state or jurisdiction or subdivision thereof, of fraud, tax 10 evasion, or a violation of the laws governing the reporting and payment of 11 fees or taxes for petroleum products within five (5) years from the date 12 of making such application; or 13 (d) Is a person who has been convicted of a felony or been granted a 14 withheld judgment following an adjudication of guilt of a felony within 15 five (5) years from the date of such application; or 16 (e) Who is not the real party in interest and the real party in interest 17 is a person described in subsection (3)(a), (3)(b), (3)(c) or (3)(d) of 18 this section. 19 (4) The commission shall not issue a distributor's license to any person 20 until that person has submitted to the commission a consent to be sued in 21 Idaho district court for purposes of the state enforcing any provision of this 22 chapter. The consent shall be submitted in such form and include such informa- 23 tion as the commission may by rule require. 24 (5) Upon approval of the application the distributor's license shall be 25 valid until it is suspended or revoked for cause, for failure to maintain the 26 bond required in section 63-2428, Idaho Code, for failure to file returns 27 required in this chapter, for failure to pay all taxes and fees due with a 28 return required in this chapter, or is otherwise canceled. 29 (56) No distributor's license shall be transferable. 30 (67) The commission shall furnish each licensed distributor with a list 31 of all distributors licensed pursuant to this section. The list shall be sup- 32 plemented by the commission from time to time to reflect additions and dele- 33 tions. 34 SECTION 4. That Section 63-2435, Idaho Code, be, and the same is hereby 35 repealed. 36 SECTION 5. SEVERABILITY. The provisions of this act are hereby declared 37 to be severable and if any provision of this act or the application of such 38 provision to any person or circumstance is declared invalid for any reason, 39 such declaration shall not affect the validity of the remaining portions of 40 this act.
STATEMENT OF PURPOSE RS 16003 This legislation relates to taxation of motor fuels; amending Section 63-2402, Idaho Code, to provide that the tax liability for motor fuels is the responsibility of the receiving distributor and to authorize distributors to include an amount equal to the tax as part of the selling price and to provide the processes for remittance of fuel tax when the distributor, retailer or consumer is exempt from the tax liability. Amends Section 63-2407, Idaho Code, to revise the process for claiming a deduction based on the number of gallons received by the distributor during a reporting period and to delete distributor deduction provisions relating to taxes previously paid on worthless accounts. Amends Section 63-2427A, Idaho Code, to provide a condition for issuance of a distributor's license, and to repeal Section 63-2435, Idaho Code, providing that motor fuel taxes are state money. FISCAL NOTE There will be no cost to the General Fund or local government. Contact Names: Representative Cannon Representative Wood Representative Denney Senator Brandt Senator Geddes Senator Bunderson Phone: 332-1000 STATEMENT OF PURPOSE/FISCAL NOTE H 661