FISCAL
NOTE
WEST virginia Legislature
2017 regular session
By
[
to the Committee on
A BILL to amend and reenact §11-14C-5
of the Code of West Virginia, 1931, as amended, relating to providing whenever average wholesale price of motor fuel is less
than $2 per gallon the tax on that fuel is increased by 5 cents.
Be it enacted by the
Legislature of West Virginia:
That
§11-14C-5 of the Code of West Virginia, 1931, as amended, be amended and
reenacted to read as follows:
ARTICLE 14C. MOTOR FUEL
EXCISE TAX.
§11-14C-5. Taxes levied;
rate.
(a) There is hereby levied
on all motor fuel an excise tax composed of a flat rate equal to $2.05 per
invoiced gallon and, on alternative fuel, on each gallon equivalent, plus a
variable component comprised of:
(1) On motor fuel other
than alternative fuel, either the tax imposed by section eighteen-b, article
fifteen of this chapter or the tax imposed under section thirteen-a, article
fifteen-a of this chapter, as applicable: Provided, That the motor fuel
excise tax shall take effect January 1, 2004: Provided, however,
That the variable component shall be equal to five percent of the average
wholesale price of the motor fuel: Provided further, That the average
wholesale price shall be no less than 97¢ per invoiced
gallon and is computed as hereinafter prescribed in this section: And provided further, That on and after January 1, 2010, the average wholesale price
shall be no less than $2.34 per invoiced gallon and is computed as hereinafter
prescribed in this section. However, whenever the average wholesale price of
motor fuel, other than alternative fuel, is less than $2 per gallon, the tax on
that fuel shall be increased by 5¢; and
(2) On alternative fuel,
either the tax imposed by section eighteen-b, article fifteen of this chapter
or the tax imposed under section thirteen-a, article fifteen-a of this chapter,
as applicable. The tax on alternative fuel takes effect on January 1, 2014,
with a variable component equal to five percent of the average wholesale price
of the alternative fuel.
(b) Determination of
average wholesale price. B
(1) To simplify determining
the average wholesale price of all motor fuel, the Tax Commissioner shall,
effective with the period beginning the first day of the month of the effective
date of the tax and each January 1 thereafter, determine the average wholesale
price of motor fuel for each annual period on the basis of sales data gathered
for the preceding period of July 1 through October 31. Notification of the
average wholesale price of motor fuel shall be given by the Tax Commissioner at
least thirty days in advance of each January 1 by filing notice of the average
wholesale price in the State Register and by other means as the Tax
Commissioner considers reasonable.
(2) The "average wholesale price" means the single, statewide average per gallon
wholesale price, rounded to the third decimal (thousandth of a cent), exclusive
of state and federal excise taxes on each gallon of motor fuel or on each
gallon equivalent of alternative fuel as determined by the Tax Commissioner
from information furnished by suppliers, importers and distributors of motor
fuel and alternative-fuel providers, alternative-fuel bulk end users and
retailers of alternative fuel in this state, or other information regarding
wholesale selling prices as the Tax Commissioner may gather or a combination of
information. In no event shall the average wholesale price be determined to be
less than 97¢ per gallon of motor fuel. For calendar year 2009, the
average wholesale price of motor fuel shall not exceed the average wholesale
price of motor fuel for calendar year 2008 as determined pursuant to the notice
filed by the Tax Commissioner with the Secretary of State on November 21, 2007,
and published in the State Register on November 30, 2007. On and after January
1, 2010, in no event shall the average wholesale price be determined to be less
than $2.34 per gallon of motor fuel. On and after January 1, 2011, the average
wholesale price shall not vary by more than ten percent from the average
wholesale price of motor fuel as determined by the Tax Commissioner for the
previous calendar year. Any limitation on
the average wholesale price of motor fuel contained in this subsection shall
not be applicable to alternative fuel.
(3) All actions of the Tax Commissioner in acquiring data
necessary to establish and determine the average wholesale price of motor fuel,
in providing notification of his or her determination prior to the effective
date of a change in rate, and in establishing and determining the average
wholesale price of motor fuel may be made by the Tax Commissioner without compliance
with the provisions of article three, chapter twenty-nine-a of this code.
(4) In an administrative or
court proceeding brought to challenge the average wholesale price of motor fuel
as determined by the Tax Commissioner, his or her determination is presumed to
be correct and shall not be set aside unless it is clearly erroneous.
(c) There is hereby levied
a floorstocks tax on motor fuel held in storage outside the bulk
transfer/terminal system as of the close of the business day preceding January 1,
2004, and upon which the tax levied by this section has not been paid. For the
purposes of this section, "close of
the business day" means the time at
which the last transaction has occurred for that day. The floorstocks tax is
payable by the person in possession of the motor fuel on January 1, 2004. The
amount of the floorstocks tax on motor fuel is equal to the sum of the tax rate
specified in subsection (a) of this section multiplied by the gallons in
storage as of the close of the business day preceding January 1, 2004.
(1) Persons in possession
of taxable motor fuel in storage outside the bulk transfer/terminal system as
of the close of the business day preceding January 1, 2004, shall:
(A) Take an inventory at
the close of the business day preceding January 1, 2004, to determine the
gallons in storage for purposes of determining the floorstocks tax;
(B) Report no later than
January 31, 2004, the gallons on forms provided by the commissioner; and
(C) Remit the tax levied
under this section no later than June 1, 2004.
(2) In the event the tax
due is paid to the commissioner on or before January 31, 2004, the person
remitting the tax may deduct from their remittance five percent of the tax
liability due.
(3) In the event the tax
due is paid to the commissioner after June 1, 2004, the person remitting the
tax shall pay, in addition to the tax, a penalty in the amount of five percent
of the tax liability due.
(4) In determining the
amount of floorstocks tax due under this section, the amount of motor fuel in
dead storage may be excluded. There are two methods for calculating the amount
of motor fuel in dead storage:
(A) If the tank has a
capacity of less than ten thousand gallons, the amount of motor fuel in dead
storage is two hundred gallons and if the tank has a capacity of ten thousand
gallons or more, the amount of motor fuel in dead storage is four hundred
gallons; or
(B) Use the manufacturer's conversion table for the tank after measuring the
number of inches between the bottom of the tank and the bottom of the mouth of
the drainpipe: Provided, That the distance between the bottom of the
tank and the bottom of the mouth of the draw pipe is presumed to be six inches.
(d) Every licensee who, on
the effective date of any rate change, has in inventory any motor fuel upon
which the tax or any portion thereof has been previously paid shall take a
physical inventory and file a report thereof with the commissioner, in the
format as required by the commissioner, within thirty days after the effective
date of the rate change, and shall pay to the commissioner at the time of
filing the report any additional tax due under the increased rate.
(e) The Tax Commissioner
shall determine by January 1, 2014, the gasoline gallon equivalent for each
alternative fuel by filing a notice of the gasoline gallon equivalent in the
State Register and by other means that the Tax Commissioner considers
reasonable. The Tax Commissioner may redetermine the gasoline gallon equivalent
for each alternative fuel by filing a notice of the gasoline gallon equivalent
in the State Register at least thirty days in advance of January 1 for the next
succeeding tax year. For purposes of this notice, the Tax Commissioner may
adopt or incorporate by reference provisions of the National Institute of
Standards and Technology, United States Department of Commerce, the Internal
Revenue Code, United States Treasury Regulations, the Internal Revenue Service
publications or guidelines or other publications or guidelines which may be
useful in determining, setting or describing the gasoline gallon equivalent for
each alternative fuel used as motor fuel.
NOTE: The purpose of this bill is
to provide whenever the average wholesale price of motor fuel is
less than $2.00 per gallon, the tax on that fuel is increased by an additional 5¢.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.