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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 - 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
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