FINAL BILL REPORT

                  SSB 6673

                          C 104 L 96

                      Synopsis as Enacted

Brief Description:  Combatting fuel tax evasion.

Sponsors:  Senate Committee on Transportation (originally sponsored by Senators Owen and Wood).

Senate Committee on Transportation

House Committee on Transportation

Background:  In Washington, motor fuel taxes are collected at the distributor level.  Fuel taxes are collected by motor vehicle fuel (gasoline) distributors, special fuel (diesel) dealers, and aviation fuel distributors and paid to the Department of Licensing (DOL).  Dealers and distributors must be licensed with the department.  Fuel tax evasion is a class C felony and upon conviction the evader is liable for the taxes owed and a 100 percent penalty assessment.

During the 1995 interim, the Legislative Transportation Committee convened a task force of legislators and stakeholders to examine fuel tax evasion.  An interim report was presented in December.  The final report is due in March.

Summary:  Fuel tax revenues collected by motor fuel dealers and distributors are considered to be held in trust for the state.  Personal liability for unpaid taxes is applied to persons, partnerships, and corporations.  The nonpayment of funds held in trust and the illegal claim that fuel has been exported in order to avoid payment of fuel tax are deemed felonies or gross misdemeanors depending on the magnitude of the offense.  Miscellaneous offenses in the aviation fuel statutes are deemed gross misdemeanors rather than misdemeanors.

Items to be included on the application for a dealer or distributor's license are set forth.  A person who supplies false information on the application may be prosecuted for false swearing.  DOL is given authority to gather updated application information from current license holders.  The reasons for which DOL may revoke or refuse to issue a distributor or dealer license are expanded.

DOL is authorized to conduct background investigations, including fingerprint record checks, of motor fuel distributors and dealers before issuing a license.  Applicants are to be charged $50 for each background check.

Dealers and distributors must retain records for five years rather than three years.

By July 1, 1996, DOL must establish a fuel tax advisory group of state agency and petroleum industry representatives.  By December 1, 1996, DOL is required to draft language to merge the motor vehicle fuel, special fuel, and aviation fuel statutes into one RCW chapter.  By December 31, 1996, DOL must develop a database of license application information.

Votes on Final Passage:

Senate    49 0

House     92 0

Effective:  June 6, 1996