2006 Legislation
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HOUSE BILL NO. 661 – Motor fuel tax, distributors

HOUSE BILL NO. 661

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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

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN 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  the receipt of distributor who receives motor fuel in this state. by any
 20    distributor receiving motor fuel upon which the tax imposed  by  this  section
 21    has not previously been paid The 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 tax
 30    shall be paid by distributors upon the distributor's receipt of the motor fuel
 31    in 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 in subsection (1) of this 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 to one two  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    for the expense incurred on behalf of the state of  Idaho  in  collecting  and
                                                                        
                                           3
                                                                        
  1    remitting  motor fuel tax moneys, maintaining necessary records for the state,
  2    preparing necessary reports and remittances in compliance with  this  chapter,
  3    and for loss from evaporation, handling, spillage and shrinkage, except losses
  4    caused by casualty as provided in subsection (3) of this section. The licensed
  5    distributor  may, in addition to the above, deduct the number of gallons equal
  6    to one percent (1%) of the total number of gallons received during the preced-
  7    ing calendar month, less the total number of gallons  deducted  under  subsec-
  8    tions    (1)  through  (3)  of  this section, to cover shrinkage, evaporation,
  9    spillage and handling losses of a retail dealer. The latter deductions are  to
 10    be  allowed  only upon filing with the commission satisfactory evidence as may
 11    be prescribed by it indicating the credit allowance has been made in favor  of
 12    the  retail  dealer  or  paid to him. The evidence shall be submitted together
 13    with the report wherein this portion of the deduction is claimed.  A  licensed
 14    distributor who sells and delivers motor fuel directly to the consumer and not
 15    for  resale  shall, with respect to those sales, be deemed a retail dealer for
 16    the 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  on
 22    gallons represented by accounts found to be worthless and actually charged-off
 23    for  income  tax purposes may be credited upon a subsequent payment of the tax
 24    provided in this chapter or, if no such tax is due, refunded. If such accounts
 25    are thereafter collected, the tax per gallon shall  be  paid  based  upon  the
 26    amount  actually received divided by the price per gallon of the original sale
 27    multiplied 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 / Fiscal Impact



                       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