SENATE BILL REPORT

EHB 24

BYRepresentatives Sutherland, Peery and P. King 

Permitting waiver of penalties for late payment of motor vehicle fuel tax.

House Committe on Transportation

Senate Committee on Transportation

Senate Hearing Date(s):April 2, 1987

Majority Report:  Do pass as amended.

      Signed by Senators Peterson, Chairman; Hansen, Chairman; Tanner, Vice Chairman; Bailey, Barr, Bender, Conner, DeJarnatt, Garrett, Halsan, Johnson, Nelson, Patterson, Smitherman, West.

Senate Staff:Gene Baxstrom (786-7303)

                  April 3, 1987

AS REPORTED BY COMMITTEE ON TRANSPORTATION, APRIL 2, 1987

BACKGROUND:

Motor vehicle fuel distributors are required to file a monthly report with the Department of Licensing showing the number of gallons of fuel sold, distributed or used by the distributor, together with the payment of the excise tax.  If a distributor fails to file a report and pay the excise tax, the Director of Licensing will estimate the amount of fuel and the payment of the excise tax.  In addition, the distributor is required to pay a ten percent penalty if he or she fails to file a timely report.

Excise tax payments are to be made on or before the 25th day of each month.  If a payment is late, a one percent penalty not to exceed $500 must be charged by the Department.  If a payment is not received by the end of each month, an additional 10 percent penalty must be charged by the Department.  Interest charges of .5 percent per month on delinquent payments must also be charged by the Department.

The Department may waive only the interest charges when the interest charge is less than $5.00 or when the cost of collection exceeds the amount due.

Under the Special Fuel Tax Act the Director of Licensing is authorized to waive monetary penalties for late filing or payment of excise tax for reasonable cause.

A large portion of the road system in federally owned forest areas is under federal jurisdiction.  The costs of maintaining these roads are borne by the federal government.  Users of these roads include logging firms that are harvesting and hauling timber from sites within the forests or from state or privately owned land that is adjacent to federal forest land.

During at least part of each year, the federal government closes some of the roads in federal forest areas to the general public; access is provided only to motor vehicles operated in conjunction with logging activities.

In many instances, the federal government imposes fees on logging firms for the privilege of using specified road segments to gain access to timber harvest sites and to transport timber from those sites after it is harvested.  These fees are levied to cover maintenance costs incurred by the federal government as a result of use by the logging firms.  Occasionally, the federal government requires a firm to perform maintenance on road segments used by the firm in conjunction with logging operations in lieu of the payment of a road maintenance fee.

Under the state's special fuel tax law, roads in federal forest areas are considered to be part of the public highway system in the state when they are open to the general public. As a result, special fuel used by motor vehicles in conjunction with logging activities on these roads is subject to the state's 18 cents-per-gallon special fuel tax even when logging firms are required to pay a maintenance fee to the federal government for the privilege of using them.  The logging firms may qualify for an exemption from the special fuel tax only when the roads are closed to the general public.

SUMMARY:

The Director of Licensing may waive penalties for late filing of monthly motor vehicle fuel reports, late payment of motor vehicle fuel excise tax,  or both, when it is shown that the failure to report or the failure to pay excise taxes due was because of reasonable cause.

Firms that are required to pay road maintenance fees to the federal government for the privilege of using roads in federal forest areas are exempted from the special fuel tax on fuel used to operate their motor vehicles on roads for which the fees are imposed.  The exemption also is allowed when logging firms are required to perform maintenance or construction work on the roads in lieu of the payment of maintenance fees.

SUMMARY OF PROPOSED SENATE AMENDMENT:

Provisions related to the waiver of the penalties for late reporting and payment of motor vehicle fuel excise tax payments are deleted.

Fiscal Note:      available

Senate Committee - Testified: Martin Sangster, Washington Trucking Association