2007 Legislation
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HOUSE BILL NO. 249 – Motor fuel tax, distributor

HOUSE BILL NO. 249

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Bill Status



H0249aa...................................................by WAYS AND MEANS
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.

02/28    House intro - 1st rdg - to printing
03/01    Rpt prt - to Transp
03/05    Rpt out - to Gen Ord
    Rpt out amen - to engros
03/06    Rpt engros - 1st rdg - to 2nd rdg as amen
03/07    2nd rdg - to 3rd rdg as amen
03/08    3rd rdg as amen - PASSED - 49-18-3
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Block,
      Bolz, Brackett, Bradford, Chadderdon, Clark, Collins, Crane,
      Edmunson, Hagedorn, Hart, Harwood, Henderson, King, Kren, Labrador,
      Lake, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
      Moyle, Nielsen, Nonini, Patrick, Raybould, Ring, Roberts, Schaefer,
      Shepherd(8), Shirley, Shively, Smith(24), Stevenson, Thayn, Vander
      Woude, Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- Bock, Boe, Chavez, Chew, Durst, Henbest, Jaquet, Killen,
      LeFavour, Pasley-Stuart, Pence, Ringo, Ruchti, Rusche, Sayler,
      Shepherd(2), Smith(30), Trail
      Absent and excused -- Black, Eskridge, Snodgrass
    Floor Sponsor - Wood(35)
    Title apvd - to Senate
03/09    Senate intro - 1st rdg - to Loc Gov
03/16    Rpt out - rec d/p - to 2nd rdg
03/19    2nd rdg - to 3rd rdg
03/21    3rd rdg - PASSED - 19-16-0
      AYES -- Bair, Broadsword, Cameron, Corder, Darrington, Davis,
      Fulcher, Gannon, Geddes, Heinrich, Hill, Keough, Little, Lodge,
      McGee, McKague, McKenzie, Pearce, Siddoway
      NAYS -- Andreason, Bastian, Bilyeu, Burkett, Coiner, Goedde, Hammond,
      Jorgenson, Kelly, Langhorst, Malepeai, Richardson, Schroeder,
      Stegner, Stennett, Werk
      Absent and excused -- None
    Floor Sponsor - Heinrich
    Title apvd - to House
03/22    To enrol - Rpt enrol - Sp signed
03/23    Pres signed
03/26    To Governor
03/30    Governor signed
         Session Law Chapter 288
         Effective: 12/01/07

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 249
                                                                        
                                BY WAYS AND MEANS 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
 40    section.
 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
                                                                        
                                       2
                                                                        
  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
 14        Code.
 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-
 46    sion.
 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
                                                                        
                                       3
                                                                        
  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, spill-
 10    age and handling losses  of a retail dealer. The latter deductions are  to  be
 11    allowed  only  upon filing with the commission satisfactory evidence as may be
 12    prescribed by it indicating the credit allowance has been made in favor of the
 13    retail dealer or paid to him. The evidence shall be  submitted  together  with
 14    the  report  wherein this portion of the deduction is claimed. A licensed dis-
 15    tributor 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
                                                                        
                                       4
                                                                        
  1    applicant:
  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-
 34    tions.
                                                                        
 35        SECTION  4.  That  Section 63-2435, Idaho Code, be, and the same is hereby
 36    repealed.
                                                                        
 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. Taxes imposed by this chapter shall
 41    not apply to motor fuel that is the subject of an agreement authorized by sec-
 42    tion 67-4002, Idaho Code, to the extent provided by the agreement, but only if
 43    the agreement is signed by the governor and appropriate  representative  of  a
 44    tribe before December 1, 2007.
                                                                        
 45        SECTION  6.  SEVERABILITY.  The provisions of this act are hereby declared
 46    to be severable and if any provision of this act or the  application  of  such
 47    provision  to  any  person or circumstance is declared invalid for any reason,
 48    such declaration shall not affect the validity of the  remaining  portions  of
 49    this act.
                                                                        
 50        SECTION  7.  An  emergency  existing  therefor,  which emergency is hereby
                                                                        
                                       5
                                                                        
  1    declared to exist, this act shall be in full force and effect on and after its
  2    passage and approval.

Amendment


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                                                     Moved by    Bedke               
                                                                        
                                                     Seconded by Wills               
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                              HOUSE AMENDMENT TO H.B. NO. 249
                                                                        
  1                                AMENDMENT TO SECTION 7
  2        On page 4 of the printed bill, in line 50, following "SECTION  7."  delete
  3    the  remainder  of  the  line and on page 5, delete lines 1 and 2, and insert:
  4    "This act shall be in full force and effect on and after December 1, 2007.".
                                                                        
  5                                 CORRECTION TO TITLE
  6        On page 1, in line 16, following "AND" delete the remainder  of  the  line
  7    and insert: "PROVIDING AN EFFECTIVE DATE.".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                               HOUSE BILL NO. 249, As Amended
                                                                        
                                BY WAYS AND MEANS 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 PROVIDING AN EFFECTIVE DATE.
                                                                        
 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
 40    section.
 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
                                                                        
                                       2
                                                                        
  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
 14        Code.
 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-
 46    sion.
 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
                                                                        
                                       3
                                                                        
  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, spill-
 10    age and handling losses  of a retail dealer. The latter deductions are  to  be
 11    allowed  only  upon filing with the commission satisfactory evidence as may be
 12    prescribed by it indicating the credit allowance has been made in favor of the
 13    retail dealer or paid to him. The evidence shall be  submitted  together  with
 14    the  report  wherein this portion of the deduction is claimed. A licensed dis-
 15    tributor 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
                                                                        
                                       4
                                                                        
  1    applicant:
  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-
 34    tions.
                                                                        
 35        SECTION  4.  That  Section 63-2435, Idaho Code, be, and the same is hereby
 36    repealed.
                                                                        
 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. Taxes imposed by this chapter shall
 41    not apply to motor fuel that is the subject of an agreement authorized by sec-
 42    tion 67-4002, Idaho Code, to the extent provided by the agreement, but only if
 43    the agreement is signed by the governor and appropriate  representative  of  a
 44    tribe before December 1, 2007.
                                                                        
 45        SECTION  6.  SEVERABILITY.  The provisions of this act are hereby declared
 46    to be severable and if any provision of this act or the  application  of  such
 47    provision  to  any  person or circumstance is declared invalid for any reason,
 48    such declaration shall not affect the validity of the  remaining  portions  of
 49    this act.
                                                                        
 50        SECTION 7.  This act shall be in full force and effect on and after Decem-
                                                                        
                                       5
                                                                        
  1    ber 1, 2007.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS 17083

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.


                           FISCAL NOTE

There will be a loss to the Highway Trust Fund of $3.3 million in
2007.  If this bill passes there will be no future loss.  No
fiscal impact to the State General Fund.




Contact
Name: Speaker Lawrence Denney
      Representative Mike Moyle
      Representative Scott Bedke
      Representative Ken Roberts
      Representative JoAn E. Wood 
Phone: 332-1000


STATEMENT OF PURPOSE/FISCAL NOTE                             H 249