HOUSE BILL REPORT
ESB 5411
As Passed House
April 8, 1993
Title: An act relating to fuel taxes.
Brief Description: Modifying provisions regarding fuel taxes.
Sponsors: Senators Vognild, Prince, Prentice, Drew, Sheldon and Sellar; by request of Department of Licensing.
Brief History:
Reported by House Committee on:
Transportation, March 31, 1993, DP;
Passed House, April 8, 1993, 97-0.
HOUSE COMMITTEE ON TRANSPORTATION
Majority Report: Do pass. Signed by 27 members: Representatives R. Fisher, Chair; Brown, Vice Chair; Jones, Vice Chair; Schmidt, Ranking Minority Member; Mielke, Assistant Ranking Minority Member; Brough; Brumsickle; Cothern; Eide; Finkbeiner; Forner; Fuhrman; Hansen; Heavey; Horn; Johanson; J. Kohl; R. Meyers; Miller; H. Myers; Orr; Patterson; Quall; Sheldon; Shin; Wood; and Zellinsky.
Staff: Roger Horn (786-7839).
Background: Motor fuel purchased for use outside the state is exempt from the motor fuel tax. Some users who purchase fuel under this exemption are not registered as distributors and are not subject to the same reporting requirements as distributors.
Distributors who fail to submit a report on gallons of motor fuel distributed in any month are required to pay fuel taxes based on a Department of Licensing (DOL) estimate of gallons sold. In addition, a 10 percent penalty is assessed. In other cases a penalty of 2 percent is assessed for late payment of taxes due.
The Motor Fuel Importer Use Act of 1963 allows the state to assess a use tax on fuel purchased out of state that is used in-state. The definition of commercial vehicles in this act is not consistent with the definition found in several other statutes, including those addressing the special fuel tax, proportional registration, and the International Fuel Tax Agreement.
RCW 82.38.090 provides that all purchases of special fuel pumped directly into the fuel supply tank of a vehicle are subject to the special fuel tax, except at unattended keylock-metered pumps. The DOL feels that the ambiguity of the language regarding keylock pumps allows some special fuel users to use exempt special fuel for unexempt purposes and causes confusion on the part of dealers.
Periodically, the DOL, in coordination with the Parks and Recreation Department, estimates the amount of fuel used by snowmobiles for purposes of determining the amount of fuel tax to be deposited into the snowmobile account. In 1990 the frequency of the evaluation was changed from once every four years to once every two years.
Summary of Bill: The definition of motor fuel distributor is changed to include any person who purchases motor fuel exempted as a fuel for export and exports it via commercial motor vehicle, i.e., truck.
For cases in which DOL has not received a monthly gallonage report of fuel sold by distributors and charges for taxes due based on a department estimate, the penalty assessed is changed from 10 percent to up to 10 percent of the taxes due.
The definition of commercial vehicles used for purposes of assessing tax on imported fuel is changed to conform with the definition in other statutes.
Special authorization from DOL is required for claiming a fuel tax exemption when fuel is pumped directly into vehicles that will be used off-highway. Farmers, logging companies and construction companies are eligible for this authorization. The language specifying that exempt fuel may be pumped into vehicles from unattended keylock-metered pumps is deleted.
The DOL estimate of snowmobile fuel use must be executed once every four years instead of once every two years.
References to "director" are changed to "department" in certain statutes pertaining to motor fuel distributors.
Fiscal Note: Requested March 23, 1993.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Testimony For: The bill improves fuel tax statutes by closing loopholes, changing ambiguous or inconsistent language, and making other modifications identified by the Department of Licensing.
Testimony Against: None.
Witnesses: Merle Steffenson, Department of Licensing.