FINAL BILL REPORT

HB 1690

                                  C 193 L 89

BYRepresentatives Prince, Day and D. Sommers; by request of  Department of Licensing

Changing provisions relating to the motor vehicle fuel tax.

House Committe on Transportation

Senate Committee on Transportation

SYNOPSIS AS ENACTED

BACKGROUND:

Under current law, out-of-state distributors who purchase motor vehicle or special fuel in Washington for export to another state or country must pay, in addition to the federal tax, the Washington State fuel tax.  The distributor then applies for a refund of those taxes.  The Department of Licensing has expedited the refund process, but it still creates a cash flow problem for out-of-state distributors.

No exemption currently exists for aircraft fuel purchased for export.

Under international law, foreign embassies and consulates and many of their personnel, as well as some international organizations, are generally exempted from paying motor fuel taxes.  In most cases the exemptions are contained in treaties to which the United States is a party, and are granted only to those representatives of foreign governments that give reciprocal exemptions to United States missions and personnel. Current Washington law gives a blanket exemption to all foreign embassies and consulates and their personnel.  The Office of Foreign Missions of the Department of State has requested that Washington law be modified to ensure that exemptions are granted only to those foreign governments that grant reciprocal privileges to the United States.  A list of eligible foreign governments will be provided to the Department of Licensing by the Office of Foreign Missions.

SUMMARY:

Out-of-state distributors purchasing motor vehicle or special fuel for export are exempt from paying Washington State fuel tax if the purchaser obtains from the selling distributor an invoice detailing the transaction. The invoice must be filed both with the Department of Licensing and the appropriate out-of-state agency.  Aircraft fuel falls within this export exemption and identical invoice requirements must be followed.

Eligible foreign government personnel are exempt from paying the Washington state tax on fuel.  The U.S. Department of State shall furnish a list of eligible governments to the Department of Licensing.

VOTES ON FINAL PASSAGE:

      House 96   0

      Senate    48     0 (Senate amended)

      House 92   0 (House concurred)

EFFECTIVE:July 23, 1989