Print Friendly HOUSE BILL NO. 188 – Motor fuel tax, distributor
HOUSE BILL NO. 188
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H0188.........................................by TRANSPORTATION AND DEFENSE
MOTOR FUELS - Adds to, repeals and amends existing law relating to the
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 process for remittance of fuel tax when the
distributor, retailer or consumer is exempt from the 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; repealing provisions relating to motor fuel taxes being state
money; and to provide for effect of tribal agreements.
02/13 House intro - 1st rdg - to printing
02/14 Rpt prt - to Transp
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 188
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; AMENDING
14 CHAPTER 24, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
15 63-2444, IDAHO CODE, TO PROVIDE FOR EFFECT OF TRIBAL AGREEMENTS; PROVIDING
16 SEVERABILITY; AND DECLARING AN EMERGENCY.
17 Be It Enacted by the Legislature of the State of Idaho:
18 SECTION 1. That Section 63-2402, Idaho Code, be, and the same is hereby
19 amended to read as follows:
20 63-2402. IMPOSITION OF TAX UPON MOTOR FUEL. (1) A tax is hereby imposed
21 upon the receipt of distributor who receives motor fuel in this state. by any
22 distributor receiving motor fuel upon which the tax imposed by this section
23 has not previously been paid The legal incidence of the tax imposed under this
24 section is borne by the distributor. The tax becomes due and payable upon
25 receipt of the motor fuel in this state by the distributor unless such tax
26 liability has previously accrued to another distributor pursuant to this sec-
27 tion. The tax shall be imposed without regard to whether use is on a govern-
28 mental basis or otherwise, unless exempted by this chapter.
29 (2) The tax imposed in this section shall be at the rate of twenty-five
30 cents (25¢) per gallon of motor fuel received. This tax shall be subject to
31 the exemptions, deductions and refunds set forth in this chapter. The tax
32 shall be paid by distributors upon the distributor's receipt of the motor fuel
33 in this state.
34 (3) Nothing in this chapter shall prohibit the distributor who is liable
35 for payment of the tax imposed under subsection (1) of this section, from
36 including as part of the selling price an amount equal to such tax on motor
37 fuels sold or delivered by such distributor; provided however, that nothing in
38 this chapter shall be deemed to impose tax liability on any person to whom
39 such fuel is sold or delivered except as provided in subsection (6) of this
41 (4) Any person coming into this state in a motor vehicle may transport in
42 the manufacturer's original tank of that vehicle, for his own use only, not
43 more than thirty (30) gallons of motor fuel for the purpose of operating that
1 motor vehicle, without complying with the provisions of this chapter.
2 ( 45) The tax imposed in subsection (1) of this section does not apply to:
3 (a) Special fuels that have been dyed at a refinery or terminal under the
4 provisions of 26 U.S.C. section 4082 and regulations adopted thereunder,
5 or under the clean air act and regulations adopted thereunder except as
6 provided in section 63-2425, Idaho Code; or
7 (b) Special fuel dispensed into a motor vehicle which uses gaseous spe-
8 cial fuels and which displays a valid gaseous special fuels permit under
9 section 63-2424, Idaho Code; or
10 (c) Special fuels that are gaseous special fuels, as defined in section
11 63-2401, Idaho Code, except that part thereof that is delivered into the
12 fuel supply tank or tanks of a motor vehicle; or
13 (d) Aircraft engine fuel subject to tax under section 63-2408, Idaho
15 (6) Should the distributor of first receipt be exempt from imposition of
16 the tax as a matter of federal law, by virtue of its status as a federally-
17 recognized Indian tribe or member of such tribe, such distributor shall not
18 bear the tax's legal incidence and must pass the tax through as part of the
19 selling price of the fuel. Such distributor shall retain the administrative
20 obligation to remit the tax, and such obligation shall accrue upon receipt in
21 accordance with subsection (1) of this section. Should a retailer otherwise
22 subject to the tax be exempt from imposition of the tax as a matter of federal
23 law, by virtue of its status as a federally-recognized Indian tribe or member
24 of such tribe, the retailer shall not bear the tax's legal incidence and must
25 pass the tax through as part of the selling price of the fuel to the consumer,
26 unless such consumer is exempt from imposition of the tax as a matter of fed-
27 eral law, by virtue of its status as a federally-recognized Indian tribe or
28 membership in such tribe, and the retailer shall be entitled to claim a credit
29 against taxes otherwise due and owing under this chapter or a tax refund,
30 together with interest, attributable to the fuel purchased by such consumer.
31 SECTION 2. That Section 63-2407, Idaho Code, be, and the same is hereby
32 amended to read as follows:
33 63-2407. DEDUCTIONS AUTHORIZED. Each licensed distributor shall deduct
34 from his monthly report:
35 (1) Motor fuel exported from this state other than in the supply tanks of
36 motor vehicles, motor boats or aircraft when supported by a shipping document,
37 an invoice signed by the purchaser, or other proper documents approved by the
38 commission but only if:
39 (a) The purchaser is not a licensed distributor and the seller can estab-
40 lish that any tax due in the jurisdiction to which the motor fuel is
41 destined is paid; or
42 (b) The purchaser is a licensed distributor in the jurisdiction to which
43 the motor fuel is destined.
44 (2) Motor fuel returned to a licensed distributor's refinery or pipeline
45 terminal storage when supported by proper documents approved by the commis-
47 (3) Motor fuel lost or destroyed by fire, lightning, flood, tornado,
48 windstorm, explosion, or other accidental casualty, after presenting to the
49 commission satisfactory proof of loss.
50 (4) The number of gallons which would be equal to one two percent ( 12%)
51 of the total number of gallons received during the reporting period, less the
52 total number of gallons deducted under subsections (1) through (3) of this
53 section, which credit is granted to the licensed distributor to reimburse him
1 for the expense incurred on behalf of the state of Idaho in collecting and
2 remitting motor fuel tax moneys, maintaining necessary records for the state,
3 preparing necessary reports and remittances in compliance with this chapter,
4 and for loss from evaporation, handling, spillage and shrinkage, except losses
5 caused by casualty as provided in subsection (3) of this section. The licensed
6 distributor may, in addition to the above, deduct the number of gallons equal
7 to one percent (1%) of the total number of gallons received during the preced-
8 ing calendar month, less the total number of gallons deducted under subsec-
9 tions (1) through (3) of this section, to cover shrinkage, evaporation,
10 spillage and handling losses of a retail dealer. The latter deductions are to
11 be allowed only upon filing with the commission satisfactory evidence as may
12 be prescribed by it indicating the credit allowance has been made in favor of
13 the retail dealer or paid to him. The evidence shall be submitted together
14 with the report wherein this portion of the deduction is claimed. A licensed
15 distributor who sells and delivers motor fuel directly to the consumer and not
16 for resale shall, with respect to those sales, be deemed a retail dealer for
17 the purposes of this section.
18 (5) Motor fuel sold to the Idaho national guard for use in aircraft and
19 in vehicles used off public highways provided, however, such deduction is sup-
20 ported by an exemption certificate signed by an authorized officer of the
21 Idaho national guard.
22 (6) For sales made on or after July 1, 1995, taxes previously paid on
23 gallons represented by accounts found to be worthless and actually charged-off
24 for income tax purposes may be credited upon a subsequent payment of the tax
25 provided in this chapter or, if no such tax is due, refunded. If such accounts
26 are thereafter collected, the tax per gallon shall be paid based upon the
27 amount actually received divided by the price per gallon of the original sale
28 multiplied by the appropriate tax rate.
29 (7) In the case of motor fuel received during the reporting period and
30 included in the report that is:
31 (a) Gasohol, deduct the number of gallons of denatured anhydrous ethanol
32 contained in the gasohol.
33 (b) Biodiesel, in whole or in part, deduct the number of gallons of agri-
34 cultural products or animal fats or the wastes of such products contained
35 in the fuel.
36 The deduction provided in this subsection shall not exceed ten percent (10%)
37 of (i) the volume of gasohol reported on the report or (ii) the special fuel
38 which is or contains biodiesel.
39 SECTION 3. That Section 63-2427A, Idaho Code, be, and the same is hereby
40 amended to read as follows:
41 63-2427A. DISTRIBUTOR'S LICENSE. (1) It is unlawful for a person to act
42 as a distributor without a license unless the person only purchases fuel which
43 is either or both:
44 (a) Motor fuel on which any tax due under this chapter has previously
45 been imposed upon a licensed distributor; or
46 (b) Dyed fuel upon which the transfer fee imposed in section 41-4909,
47 Idaho Code, has been imposed upon a licensed distributor.
48 (2) Application for a license shall be made upon forms furnished and in a
49 manner prescribed by the commission and shall contain information as it deems
50 necessary, and be accompanied by a bond in the amount required in section
51 63-2428, Idaho Code.
52 (3) Upon receipt of the application and bond in proper form the commis-
53 sion shall issue the applicant a license to act as a distributor unless the
2 (a) Is a person who formerly held a license under the provisions of this
3 chapter, any predecessor statute, under the laws of any other jurisdic-
4 tion, or under the laws of the United States which license, prior to the
5 time of filing this application, had been revoked for cause within five
6 (5) years from the date of such application; or
7 (b) Is a person who has outstanding fuel tax liabilities to this state,
8 any other jurisdiction or the United States government; or
9 (c) Is a person who has been convicted, under the laws of the United
10 States or any state or jurisdiction or subdivision thereof, of fraud, tax
11 evasion, or a violation of the laws governing the reporting and payment of
12 fees or taxes for petroleum products within five (5) years from the date
13 of making such application; or
14 (d) Is a person who has been convicted of a felony or been granted a
15 withheld judgment following an adjudication of guilt of a felony within
16 five (5) years from the date of such application; or
17 (e) Who is not the real party in interest and the real party in interest
18 is a person described in subsection (3)(a), (3)(b), (3)(c) or (3)(d) of
19 this section.
20 (4) The commission shall not issue a distributor's license to any person
21 until that person has submitted to the commission a consent to be sued in
22 Idaho district court for purposes of the state enforcing any provision of this
23 chapter. The consent shall be submitted in such form and include such informa-
24 tion as the commission may by rule require.
25 (5) Upon approval of the application the distributor's license shall be
26 valid until it is suspended or revoked for cause, for failure to maintain the
27 bond required in section 63-2428, Idaho Code, for failure to file returns
28 required in this chapter, for failure to pay all taxes and fees due with a
29 return required in this chapter, or is otherwise canceled.
30 ( 56) No distributor's license shall be transferable.
31 ( 67) The commission shall furnish each licensed distributor with a list
32 of all distributors licensed pursuant to this section. The list shall be sup-
33 plemented by the commission from time to time to reflect additions and dele-
35 SECTION 4. That Section 63-2435, Idaho Code, be, and the same is hereby
37 SECTION 5. That Chapter 24, Title 63, Idaho Code, be, and the same is
38 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
39 ignated as Section 63-2444, Idaho Code, and to read as follows:
40 63-2444. EFFECT OF TRIBAL AGREEMENTS. (1) Taxes imposed by this chapter
41 shall not apply to motor fuel that is the subject of an agreement authorized
42 by section 67-4002, Idaho Code, to the extent provided by the agreement, but
43 only if the agreement is signed by the governor and appropriate representative
44 of a tribe before July 1, 2007.
45 (2) In the event that an agreement described in subsection (1) of this
46 section is not approved by the next regular session of the legislature in the
47 manner provided by section 67-4002, Idaho Code, the exemption provided in sub-
48 section (1) of this section shall expire upon the adjournment of that legisla-
49 tive session.
50 SECTION 6. SEVERABILITY. The provisions of this act are hereby declared
51 to be severable and if any provision of this act or the application of such
1 provision to any person or circumstance is declared invalid for any reason,
2 such declaration shall not affect the validity of the remaining portions of
3 this act.
4 SECTION 7. An emergency existing therefor, which emergency is hereby
5 declared to exist, this act shall be in full force and effect on and after its
6 passage and approval.
STATEMENT OF PURPOSE
This bill places the legal incidence of the motor fuels tax on
distributors. This is consistent with historical practice and
reverses the effect of recent court decisions. It also affords
the opportunity for entering tribal agreements.
There will be a loss to the Highway Trust Fund of $3.3 million in
2006. If this bill passes there will be no future loss.
No fiscal impact to the State General Fund.
Name: Representative JoAn Wood
Representatives Denney, Moyle, Bedke, Roberts
STATEMENT OF PURPOSE/FISCAL NOTE H 188