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S1114.....................................................by TRANSPORTATION
FUEL TAXES - Adds to and amends existing law relating to fuel taxes to
increase the annual fee for gaseous fuel permits; to increase the amount
required to be secured by a distributor's bond and to provide that the bond
applies to the bonding requirement of Chapter 46, Title 63, Idaho Code; to
provide an exception to the taxation limitations of Chapter 24, Title 63,
Idaho Code; to provide definitions; to provide for imposition of the
Highway Preservation Fuel Tax; to provide for payment of the tax; to
provide for distribution of tax revenues; to require distributor reports;
to require bonding; to provide recordkeeping requirements; to provide for
revocation or cancellation of licenses; to provide penalties for doing
business in Idaho without a valid license; to provide for enforcement; to
authorize exchange of information agreements; to provide for administration
by the State Tax Commission; and to provide for violations and penalties.
02/09 Senate intro - 1st rdg - to printing
02/12 Rpt prt - to Transp
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE SENATE
SENATE BILL NO. 1114
BY TRANSPORTATION COMMITTEE
1 AN ACT
2 RELATING TO THE HIGHWAY PRESERVATION FUEL TAX; AMENDING SECTION 63-2424, IDAHO
3 CODE, TO INCREASE THE ANNUAL FEE FOR GASEOUS FUEL PERMITS; AMENDING SEC-
4 TION 63-2428, IDAHO CODE, TO INCREASE THE AMOUNT REQUIRED TO BE SECURED BY
5 A DISTRIBUTOR'S BOND AND TO PROVIDE THAT THE BOND APPLIES TO THE BONDING
6 REQUIREMENTS OF CHAPTER 46, TITLE 63, IDAHO CODE; AMENDING SECTION
7 63-2431, IDAHO CODE, TO PROVIDE AN EXCEPTION TO THE TAXATION LIMITATIONS
8 OF CHAPTER 24, TITLE 63, IDAHO CODE; AND AMENDING TITLE 63, IDAHO CODE, BY
9 THE ADDITION OF A NEW CHAPTER 46, TITLE 63, IDAHO CODE, TO PROVIDE A CHAP-
10 TER HEADING, TO PROVIDE DEFINITIONS, TO PROVIDE FOR IMPOSITION OF THE
11 HIGHWAY PRESERVATION FUEL TAX, TO PROVIDE FOR PAYMENT OF THE TAX, TO PRO-
12 VIDE FOR DISTRIBUTION OF TAX REVENUES, TO REQUIRE DISTRIBUTOR REPORTS, TO
13 REQUIRE BONDING, TO PROVIDE RECORDKEEPING REQUIREMENTS, TO PROVIDE FOR
14 REVOCATION OR CANCELLATION OF LICENSES, TO PROVIDE PENALTIES FOR DOING
15 BUSINESS IN IDAHO WITHOUT A VALID LICENSE, TO PROVIDE FOR ENFORCEMENT OF
16 THE PROVISIONS OF CHAPTER 46, TITLE 63, IDAHO CODE, TO AUTHORIZE EXCHANGE
17 OF INFORMATION AGREEMENTS, TO PROVIDE FOR ADMINISTRATION BY THE STATE TAX
18 COMMISSION AND TO PROVIDE FOR VIOLATIONS AND PENALTIES.
19 Be It Enacted by the Legislature of the State of Idaho:
20 SECTION 1. That Section 63-2424, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 63-2424. GASEOUS FUELS. (1) In the case of special fuels which are in a
23 gaseous form, the commission shall provide by rule the method to be used for
24 converting the measurement of the fuel to the equivalent of gallons for the
25 purpose of applying tax rates. The method provided shall cause the tax rate
26 provided in section 63-2402, Idaho Code, to apply to an amount of gaseous
27 fuels having energy equal to one (1) gallon of gasoline.
28 (2) As an alternative to the provisions of subsection (1) of this sec-
29 tion, an annual fee in lieu of the excise tax may be collected on a vehicle
30 powered by gaseous fuels. The rate of the fee shall be based on the following
31 schedule for all types of gaseous fuels as adjusted by the formula for prora-
32 tion set out below. The permits shall be sold by gaseous fuels vendors dis-
33 pensing gaseous fuels into motor vehicles.
34 VEHICLE TONNAGE (GVW) FEE
35 0 -- 8,000 $60105.00
36 8,001 -- 16,000 $89155.00
37 16,001 -- 26,000 $179313.00
38 26,001 and above $208364.00
39 Permits for vehicles which are converted to gaseous fuels after the first of
40 July in any year shall have the fee prorated for the appropriate number of
41 months until renewal. The commission shall provide by rule the method to be
42 used for converting the measurement of fuel to the equivalent of gallons for
43 the purpose of applying increases in tax rates after this law becomes effec-
2
1 tive. A decal issued by the commission shall be displayed in any vehicle for
2 which a permit is issued hereunder as evidence that the annual fee has been
3 paid in lieu of the fuel tax. This decal shall be displayed in a conspicuous
4 place.
5 SECTION 2. That Section 63-2428, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 63-2428. BONDING. (1) At the time an application for a distributor's
8 license under section 63-2427A, Idaho Code, is submitted to the commission,
9 the applicant shall file a bond with the commission conditioned upon faithful
10 performance of all of the requirements of this chapter and of chapter 46,
11 title 63, Idaho Code. The total amount of the bond shall be fixed by the com-
12 mission and shall be equivalent to at least twice the estimated average tax
13 liability for the reporting period for which the applicant will be required to
14 file a distributor's report under section 63-2406, Idaho Code, or section
15 63-4605, Idaho Code. The bond required by this section shall in no case be
16 less than one thousand five hundred dollars ($1,0500) nor more than two three
17 hundred thousand dollars ($2300,000). Based on prior years' experience, the
18 total amount required to be secured by the bond may be increased or reduced by
19 the commission at any time. The bond will be waived if the commission is sat-
20 isfied that the distributor has the financial responsibility to meet the
21 required bond amount. Financial responsibility may be determined by the com-
22 mission upon review of all relevant public documents including appropriate
23 county records and records of tax payments to the state of Idaho. The distrib-
24 utor can be required to provide a commercial credit rating, balance sheet, or
25 income statement to demonstrate present financial solvency, i.e. ownership of
26 real and/or personal property, the unencumbered value of which exceeds the
27 bond amount otherwise required. If such financial solvency is established,
28 and if the distributor has been doing business in Idaho as a licensed distrib-
29 utor for five (5) or more consecutive years without a default in the payment
30 of taxes imposed in this chapter or chapter 46, title 63, Idaho Code, finan-
31 cial responsibility shall be presumed. Any bond given in conjunction with
32 this chapter shall be a continuing instrument, and shall cover the period dur-
33 ing which the license in connection with which the bond is given is in effect,
34 unless the surety on the bond is released or discharged by the commission. Any
35 surety on any bond furnished by a licensee shall be discharged and released
36 from any and all liability to the state accruing on the bond after the expira-
37 tion of thirty (30) days from the date upon which the surety shall have lodged
38 with the commission a written request to be released and discharged. The
39 request shall not operate to relieve, release or discharge the surety from any
40 liability accrued, or which will accrue, before the expiration of the thirty
41 (30) day period. The commission shall promptly, upon receipt of the notice of
42 the request, notify the licensee and require him to furnish a new bond. Unless
43 the licensee files a new bond with the commission in the amount provided in
44 this section before the expiration of the thirty (30) day period, the commis-
45 sion shall immediately cancel the licensee's license.
46 (2) In the event that any taxes due under the provisions of this chapter
47 or chapter 46, title 63, Idaho Code, are not paid by a licensed distributor,
48 and the unpaid taxes are assessed by the commission, and after all avenues for
49 appeal of the assessment have been exhausted, the commission may apply the
50 unpaid tax liability against the bond required by this section.
51 SECTION 3. That Section 63-2431, Idaho Code, be, and the same is hereby
52 amended to read as follows:
3
1 63-2431. TAX IN LIEU OF ALL OTHER TAXES IMPOSED -- EXCEPTION. The taxes
2 imposed by this chapter shall be in lieu of all other excise taxes, license
3 fees or property taxes imposed upon gasoline, aircraft engine fuel or special
4 fuels by this state or any political subdivision of this state, except as pro-
5 vided in chapter 46, title 63, Idaho Code.
6 SECTION 4. That Title 63, Idaho Code, be, and the same is hereby amended
7 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
8 ter 46, Title 63, Idaho Code, and to read as follows:
9 CHAPTER 46
10 HIGHWAY PRESERVATION FUEL TAX
11 63-4601. DEFINITIONS. (1) "Commission" means the Idaho state tax commis-
12 sion.
13 (2) "Distributor" means any person who receives motor fuel in this state,
14 and includes a special fuels dealer. Any person who sells or receives gaseous
15 fuels shall not be considered a distributor unless the gaseous fuel is deliv-
16 ered into the fuel supply tank or tanks of a motor vehicle not then owned or
17 controlled by him.
18 (3) "Motor fuel" means gasoline, special fuels, aircraft engine fuels or
19 any other fuels suitable for the operation or propulsion of motor vehicles,
20 motor boats or aircraft.
21 (4) "Purchase price" means the price paid by the distributor for motor
22 fuel received by the distributor as specified in section 63-2403, Idaho Code.
23 63-4602. IMPOSITION OF HIGHWAY PRESERVATION FUEL TAX UPON MOTOR FUEL. (1)
24 A highway preservation fuel tax is hereby imposed upon gross purchases by a
25 distributor of motor fuel in this state at seven percent (7%) of the purchase
26 price paid by the distributor. The tax shall be imposed without regard to
27 whether use is on a governmental basis or otherwise, unless exempted by the
28 provisions of this chapter. The tax imposed by this subsection (1) is an
29 excise tax, the legal incidence of which is imposed upon the distributor who
30 purchases the motor fuel.
31 (2) The tax shall be paid by distributors upon the distributor's receipt
32 of motor fuel in this state.
33 (3) The tax imposed in subsection (1) of this section does not apply to:
34 (a) Special fuels that have been dyed at a refinery or terminal under the
35 provisions of 26 U.S.C. section 4082 and regulations adopted thereunder,
36 or under the federal clean air act and regulations adopted thereunder
37 except as provided in section 63-2425, Idaho Code; or
38 (b) Special fuel dispensed into a motor vehicle which uses gaseous spe-
39 cial fuels and which displays a valid gaseous special fuels permit under
40 section 63-2424, Idaho Code; or
41 (c) Special fuels that are gaseous special fuels, as defined in section
42 63-2401, Idaho Code, except that part thereof that is delivered into the
43 fuel supply tank or tanks of a motor vehicle; or
44 (d) Aircraft engine fuel subject to tax under section 63-2408, Idaho
45 Code.
46 63-4603. PAYMENT OF TAX. The highway preservation fuel tax imposed by
47 section 63-4602, Idaho Code, shall be paid by the distributor, and is imposed
48 upon the purchase price paid on gross purchases of motor fuel by the distribu-
49 tor at the rate specified in section 63-4602, Idaho Code. The tax shall be
50 remitted with the distributor's monthly report as required in section 63-4605,
4
1 Idaho Code.
2 63-4604. DISTRIBUTION OF TAX REVENUES. (1) An amount of money equal to
3 the actual cost of collecting, administering and enforcing the highway preser-
4 vation fuel tax provisions by the commission, as determined by the commission,
5 shall be retained by the commission. The amount retained by the commission
6 shall not exceed the amount authorized to be expended by appropriation by the
7 legislature. Any unencumbered balance in excess of the actual cost of collect-
8 ing, administering and enforcing the highway preservation fuel tax by the com-
9 mission at the end of each fiscal year shall be distributed to the highway
10 distribution account.
11 (2) An amount of money shall be distributed to the state refund account
12 sufficient to pay current refund claims. All refunds authorized by the commis-
13 sion to be paid under this chapter shall be paid from the state refund
14 account. Such moneys are hereby continuously appropriated.
15 63-4605. DISTRIBUTOR REPORTS. (1) Each distributor shall, not later than
16 the last day of each calendar month or for such other reporting period as the
17 commission may authorize, render to the commission an accurate report of all
18 moneys paid for motor fuel received by him in this state during the preceding
19 reporting period. The report shall be made in the manner and on forms required
20 by the commission.
21 (2) The distributor's report shall include:
22 (a) An itemized statement of the total moneys paid for motor fuel
23 received during the preceding calendar month; and
24 (b) Other information as the commission may require for the proper admin-
25 istration of this chapter.
26 (3) The report shall be accompanied by a remittance of the tax shown to
27 be due on the report, together with applicable interest and penalty if any are
28 due, unless the amounts due are paid by electronic funds transfer in the man-
29 ner provided in section 67-2026, Idaho Code.
30 (4) Any distributor required to pay the tax imposed by this chapter who
31 fails to pay such tax shall be liable to the commission for the amount of tax
32 not remitted plus applicable interest or penalty. The commission shall assess
33 interest and collect penalties in accordance with the provisions of section
34 63-2434, Idaho Code.
35 63-4606. BONDING. (1) At the time an application for a distributor's
36 license, issued pursuant to section 63-2427A, Idaho Code, is submitted to the
37 commission, the applicant shall file a bond with the commission conditioned
38 upon faithful performance of all of the requirements of this chapter and as
39 required under section 63-2428, Idaho Code.
40 (2) In the event that any taxes due under the provisions of this chapter
41 are not paid by a licensed distributor, and the unpaid taxes are assessed by
42 the commission, and after all avenues for appeal of the assessment have been
43 exhausted, the commission may apply the unpaid tax liability against the bond
44 required by this section.
45 63-4607. REQUIRED RECORDS. (1) Every distributor and every special fuels
46 dealer and every person reporting, manufacturing, refining, dealing, trans-
47 porting or storing gasoline, aircraft engine fuel or special fuels in this
48 state shall keep records, receipts, invoices and other pertinent records as
49 the commission may require. Records required and all other relevant books and
50 records shall be available for inspection by the commission at all times dur-
51 ing regular recordkeeper's business hours.
5
1 (2) Records required in subsection (1) of this section shall be kept for
2 a period of three (3) years from the date on which the distributor's report or
3 special fuels dealer's return to which they relate was required to be filed
4 with the commission.
5 63-4608. REVOCATION OR CANCELLATION OF LICENSE. (1) The commission may
6 revoke the license of a distributor or a carrier licensed in Idaho under the
7 international fuel tax agreement (IFTA) in any of the following circumstances:
8 (a) The licensee refuses or neglects to comply with the provisions of
9 this chapter or rules of the commission promulgated pursuant to this chap-
10 ter;
11 (b) When, upon investigation, the commission ascertains or finds that the
12 person to whom the license was issued is no longer engaged in business as
13 a distributor or an Idaho IFTA carrier and has not been so engaged for a
14 period of six (6) months prior to the cancellation; or
15 (c) The licensee files a written request with the commission asking that
16 the license be canceled and the commission determines upon investigation
17 that the licensee is no longer a person required to be a licensed distrib-
18 utor or required to have an IFTA license.
19 (2) In the case of a cancellation under subsection (1)(c) of this sec-
20 tion, the cancellation shall not be effective nor shall the licensee's surety
21 be discharged from any bond unless the licensee has paid to the state of Idaho
22 all taxes imposed under this chapter, including all interest, penalties and
23 additional amounts that may have accrued.
24 (3) In the case of revocation of a license under subsection (1)(a) or
25 (1)(b) of this section, prior to revoking the license, the commission shall
26 give notice of the proposed revocation to the licensee in the manner provided
27 in section 63-3045, Idaho Code, which shall be subject to review as provided
28 in section 63-3045, Idaho Code. If a petition for redetermination of the
29 license revocation is not filed within the time period allowed, the determina-
30 tion shall become final as provided in section 63-3045B, Idaho Code. The state
31 tax commission shall not issue a new license after the revocation of a license
32 unless the commission is satisfied that the former holder of the license has
33 filed all returns and reported and paid all taxes, interest and penalties
34 required by this chapter, and such person has corrected any other violations
35 of this chapter upon which the revocation was based.
36 63-4609. DOING BUSINESS WITHOUT A LICENSE -- PENALTIES. Any person who
37 engages in the business as a distributor or a special fuels dealer without
38 being the holder of a valid license shall be guilty of a misdemeanor. Each day
39 of business without a valid license shall constitute a separate offense.
40 63-4610. ENFORCEMENT PROVISIONS. For the purpose of carrying out its
41 duties to enforce or administer the provisions of this chapter, the commission
42 shall have the powers and duties provided by sections 63-3038, 63-3039,
43 63-3042 through 63-3066, 63-3068, 63-3071, 63-3074 through 63-3078 and 63-217,
44 Idaho Code, which sections are incorporated by reference herein as though set
45 out verbatim.
46 63-4611. EXCHANGE OF INFORMATION AGREEMENTS. (1) For the purpose of
47 administering the provisions of this chapter, the commission and the Idaho
48 transportation department may enter into such written agreements for the
49 exchange of information or delegation of authority or both as the commission
50 and the department may find necessary to properly implement the letter and
51 intent of the provisions of this chapter.
6
1 (2) The commission may enter into cooperative agreements as a part of or
2 in addition to any authorized by section 63-2442A, Idaho Code, and in accor-
3 dance with the provisions of that section for the administration and enforce-
4 ment of this chapter.
5 63-4612. ADMINISTRATION. The commission shall enforce the provisions of
6 this chapter and may prescribe, adopt, and enforce reasonable rules relating
7 to the administration and enforcement of those provisions.
8 63-4613. VIOLATIONS AND PENALTIES. (1) It shall be unlawful for any per-
9 son to:
10 (a) Refuse, or knowingly and intentionally fail to make and file any
11 statement required by this chapter in the manner or within the time
12 required;
13 (b) Willfully fail to pay any tax due or any fee required by this chapter
14 or any related penalties or interest;
15 (c) Knowingly and with intent to evade or to aid in the evasion of the
16 tax imposed by this chapter to make any false statement or conceal any
17 material fact in any record, return, or affidavit provided for in this
18 chapter;
19 (d) Conduct any activities requiring a license under this chapter without
20 a license or after a license has been surrendered, canceled, or revoked;
21 or
22 (e) Fail to keep and maintain the books and records required by this
23 chapter.
24 (2) It shall be unlawful for any retail dealer in motor fuel who is not a
25 licensed distributor or for any person in the state of Idaho other than a
26 licensed distributor to purchase, receive or accept any motor fuel upon which
27 tax imposed by this chapter has not been paid.
28 (3) It shall be unlawful for any person, including a licensed distribu-
29 tor, to sell or transfer any fuel upon which tax required by this chapter has
30 not been paid to any person unless such sale or transfer is authorized by this
31 chapter.
32 (4) Any person violating any provision specified in this section is
33 guilty of a misdemeanor, unless the act is by any other law of this state
34 declared to be a felony, and upon conviction is punishable by a fine of not
35 less than one hundred dollars ($100) nor more than one thousand dollars
36 ($1,000).
37 (5) The fine and imprisonment provided for in this section shall be in
38 addition to any other penalty imposed by any other provision of this chapter.
STATEMENT OF PURPOSE
RS 16762
This bill would impose a seven (7) percent tax on the base or
“rack” price of all fuel at the distributor level. This
legislation provides for the incidence of the tax to occur prior
to assessment of the federal tax of 18.4 cents and to the
assessment of the state fuel tax rate of 25 cents per gallon.
This tax would provide not only a significant source of revenue
to the Highway Distribution Account, but would also provide a
practical indexing methodology for funding transportation in
Idaho as the tax revenue would increase with the price of fuel.
FISCAL NOTE
This legislation is estimated to generate approximately $108.3
million in revenue (approximately 900 million gallons gasoline
and dyed diesel X $1.73 gal. X .07) (at $2.16 gallon retail) to
the Highway Distribution Account, with approximately $61.7
million being distributed to the Idaho Transportation
Department, approximately $41.2 million to local units of
government, and approximately $5.4 million to the Idaho State
Police.
CONTACT
Name: Julie Pipal, BPIRM
Agency: Idaho Transportation Department
Phone: 334-8804
STATEMENT OF PURPOSE/FISCAL NOTE S 1114