Bill Text: MI SB1080 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Sales tax; collections; provisions for prepaid sales tax on gasoline and diesel fuel; revise. Amends sec. 6a of 1933 PA 167 (MCL 205.56a).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-09-23 - Referred To Committee On Finance [SB1080 Detail]
Download: Michigan-2013-SB1080-Introduced.html
SENATE BILL No. 1080
September 23, 2014, Introduced by Senator ROBERTSON and referred to the Committee on Finance.
A bill to amend 1933 PA 167, entitled
"General sales tax act,"
by amending section 6a (MCL 205.56a), as amended by 2013 PA 1.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6a. (1) Through March 31, 2013, at the time of purchase
or shipment from a refiner, pipeline terminal operator, or marine
terminal operator, a purchaser or receiver of gasoline shall prepay
a portion of the tax imposed by this act at the rate provided in
this section to the refiner, pipeline terminal operator, or marine
terminal operator for the purchase or receipt of gasoline. If the
purchase or receipt of gasoline is made outside this state for
shipment into and subsequent sale within this state, the purchaser
or receiver, other than a refiner, pipeline terminal operator, or
marine terminal operator, shall make the prepayment required by
this section directly to the department. Prepayments for gasoline
shall be made at a cents-per-gallon rate determined by the
department and shall be based on 6% of the statewide average retail
price of a gallon of self-serve unleaded regular gasoline as
determined and certified by the department rounded up to the
nearest 1/10 of 1 cent. A person that makes prepayments directly to
the department shall make those prepayments according to the
schedule in subsection (6).
(2)
Beginning Except as
otherwise provided in this subsection,
beginning April 1, 2013, at the time of purchase or shipment from a
refiner, pipeline terminal operator, or marine terminal operator, a
purchaser or receiver of fuel shall prepay a portion of the tax
imposed by this act at the rates provided in this section to the
refiner, pipeline terminal operator, or marine terminal operator
for the purchase or receipt of fuel. If the purchase or receipt of
fuel is made within a bulk transfer/terminal system, the prepayment
of sales tax is not required. If the purchase or receipt of fuel is
made within this state for shipment and subsequent sale within this
state and both the seller and purchaser or receiver are refiners,
pipeline terminal operators, or marine terminal operators, the
prepayment of sales tax is not required. If the purchase or receipt
of fuel is made within this state for shipment and subsequent sale
outside this state, the prepayment of sales tax is not required. If
the purchase or receipt of fuel is made outside this state for
shipment into and subsequent sale within this state, the purchaser
or receiver, other than a refiner, pipeline terminal operator, or
marine terminal operator, shall make the prepayment required by
this section directly to the department. Prepayments for gasoline
shall be made at a cents-per-gallon rate determined by the
department and shall be based on 6% of the statewide average retail
price of a gallon of self-serve unleaded regular gasoline as
determined and certified by the department rounded up to the
nearest 1/10 of 1 cent. Prepayments for diesel fuel shall be made
at a cents-per-gallon rate determined by the department and shall
be based on 6% of the statewide average retail price of a gallon of
undyed No. 2 ultra-low sulfur diesel fuel as determined and
certified by the department rounded up to the nearest 1/10 of 1
cent. A person that makes prepayments directly to the department
shall make those prepayments according to the schedule in
subsection (6).
(3) Through March 31, 2013, the rate of prepayment applied
pursuant to subsection (1) shall be determined every 3 months by
the department unless the department certifies that the change in
the statewide average retail price of a gallon of self-serve
unleaded regular gasoline has been less than 10% since the
establishment of the rate of prepayment then in effect.
(4) Beginning April 1, 2013, the rates of prepayment applied
pursuant to subsection (2) shall be determined every month by the
department. Notwithstanding subsection (3), the department shall
publish notice of the rates of prepayment applicable to gasoline
and diesel fuel pursuant to subsection (2) not later than the tenth
day of the month immediately preceding the month in which the rate
is effective.
(5) A person subject to tax under this act that makes
prepayment to another person as required by this section for
gasoline may claim an estimated prepayment credit on its regular
monthly return filed pursuant to section 6. The credit shall be for
prepayments made during the month for which the return is required
and shall be based upon the difference between prepayments made in
the immediately preceding month and collections of prepaid tax
received from sales or transfers during the month for which the
return required under section 6 is made. A sale or transfer for
which collection of prepaid tax is due the taxpayer is subject to a
bad debt deduction under section 4i, whether or not the sale or
transfer is a sale at retail. The credit shall not be reduced
because of actual shrinkage. A taxpayer that does not, in the
ordinary course of business, sell gasoline in each month of the
year may, with the approval of the department, base the initial
prepayment deduction in each tax year on prepayments made in a
month other than the immediately preceding month. The difference in
actual prepayments shall be reconciled on the annual return in
accordance with procedures prescribed by the department.
(6) Notwithstanding the other provisions for the payment and
remitting of tax due under this act, a refiner, pipeline terminal
operator, or marine terminal operator shall account for and remit
to the department the prepayments received pursuant to this section
in accordance with the following schedule:
(a) On or before the twenty-fifth of each month, prepayments
received after the end of the preceding month and before the
sixteenth of the month in which the prepayments are made.
(b) On or before the tenth of each month, payments received
after the fifteenth and before the end of the preceding month.
(7) A refiner, pipeline terminal operator, or marine terminal
operator that fails to remit prepayments made by a purchaser or
receiver of fuel is subject to the penalties provided by 1941 PA
122, MCL 205.1 to 205.31.
(8) The refiner, pipeline terminal operator, or marine
terminal operator shall not receive a deduction under section 4 for
receiving and remitting prepayments from a purchaser or receiver
pursuant to this section.
(9) The purchaser or receiver of fuel that makes prepayments
is not subject to further liability for the amount of the
prepayment if the refiner, pipeline terminal operator, or marine
terminal operator fails to remit the prepayment.
(10) A person subject to tax under this act that makes
prepayment to another person as required by this section for diesel
fuel may claim an estimated prepayment credit on its regular
monthly return filed pursuant to section 6. The credit shall be for
prepayments made during the month for which the return is required
and shall be based upon the difference between the prepayments made
in the immediately preceding month and collections of prepaid tax
received from sales or transfers during the month for which the
return required under section 6 is made. A sale or transfer for
which collection of prepaid tax is due the taxpayer is subject to a
bad debt deduction under section 4i, whether or not the sale or
transfer is a sale at retail. The credit shall not be reduced
because of actual shrinkage. A taxpayer that does not, in the
ordinary course of business, sell diesel fuel in each month of the
year may, with the approval of the department, base the initial
prepayment deduction in each tax year on prepayments made in a
month other than the immediately preceding month. Estimated
prepayment credits claimed with the return due in April 2013 shall
be based on the taxpayer's retail sales of diesel fuel in March
2013. The difference in actual prepayments shall be reconciled on
the annual return in accordance with procedures prescribed by the
department. Repayment of the credit claimed on the return due in
April 2013 shall be made by the earlier of the date that the
taxpayer stops selling diesel fuel or October 15, 2013.
(11) As used in this section:
(a) "Blendstock" includes all of the following:
(i) Any petroleum product component of fuel, such as naphtha,
reformate, or toluene.
(ii) Any oxygenate that can be blended for use in a motor fuel.
(b) "Boat terminal transfer" means a dock, a tank, or
equipment contiguous to a dock or a tank, including equipment used
in the unloading of fuel from a ship and in transferring the fuel
to a tank pending wholesale bulk reshipment.
(c) "Bulk plant" means a motor fuel storage and distribution
facility that is not a terminal and from which motor fuel may be
withdrawn by a tank wagon, a transport truck, or a marine vessel.
(d) "Bulk transfer" means a transfer of motor fuel from 1
location to another by pipeline tender or marine delivery within a
bulk transfer/terminal system, including, but not limited to, all
of the following transfers:
(i) A marine vessel movement of motor fuel from a refinery or
terminal to a terminal.
(ii) Pipeline movements of motor fuel from a refinery or
terminal to a terminal.
(iii) Book transfers of motor fuel within a terminal between
licensed suppliers before completion of removal across the terminal
rack.
(iv) Two-party exchanges between licensed suppliers.
(e) "Bulk transfer/terminal system" means a motor fuel
distribution system consisting of refineries, pipelines, marine
vessels, and terminals. Motor fuel in a refinery, pipeline,
terminal, or marine vessel transporting motor fuel to a refinery or
terminal is in a bulk transfer/terminal system. Motor fuel in a
fuel storage facility including, but not limited to, a bulk plant
that is not part of a refinery or terminal, in the fuel supply tank
of any engine or motor vehicle, in a marine vessel transporting
motor fuel to a fuel storage facility that is not in a bulk
transfer/terminal system, or in any tank car, rail car, trailer,
truck, or other equipment suitable for ground transportation is not
in a bulk transfer/terminal system.
(f) (c)
"Diesel fuel" means any
liquid other than gasoline
that is capable of use as a fuel or a component of a fuel in a
motor vehicle that is propelled by a diesel-powered engine or in a
diesel-powered train. Diesel fuel includes number 1 and number 2
fuel oils and mineral spirits. Diesel fuel also includes any
blendstock or additive that is sold for blending with diesel fuel
and any liquid prepared, advertised, offered for sale, sold for use
as, or used in the generation of power for the propulsion of a
diesel-powered engine, airplane, or marine vessel. An additive or
blendstock is presumed to be sold for blending unless a
certification is obtained for federal purposes that the substance
is for a use other than blending for diesel fuel. Diesel fuel does
not include dyed diesel fuel, kerosene, or an excluded liquid.
(g) (d)
"Dyed diesel fuel" means
diesel fuel that is dyed in
accordance with internal revenue service rules or pursuant to any
other internal revenue service requirements, including any
invisible marker requirements.
(h) (e)
"Excluded liquid" means
that term as defined in 26 CFR
48.4081-1.
(i) (f)
"Fuel" means gasoline and
diesel fuel that is subject
to tax under this act, collectively, except when gasoline or diesel
fuel is referred to separately.
(j) (g)
"Gasoline" means and
includes gasoline, alcohol,
gasohol, casing head or natural gasoline, benzol, benzine, naphtha,
methanol, transmix, any blendstock additive, or other product that
is sold for blending with gasoline or for use on the road, other
than products typically sold in containers of less than 5 gallons.
Gasoline also includes a liquid prepared, advertised, offered for
sale, sold for use as, or used in the generation of power for the
propulsion of a motor vehicle, airplane, or marine vessel,
including a product obtained by blending together any 1 or more
products of petroleum, with or without another product, and
regardless of the original character of the petroleum products
blended, if the product obtained by the blending is capable of use
in the generation of power for the propulsion of a motor vehicle,
airplane, or marine vessel. The blending of all of the above-named
products, regardless of their name or characteristics, shall
conclusively be presumed to have been done to produce fuel, unless
the product obtained by the blending is entirely incapable of use
as fuel. An additive or blendstock is presumed to be sold for
blending unless a certification is obtained for federal purposes
that the substance is for a use other than blending for gasoline.
Gasoline does not include diesel fuel, dyed diesel fuel, kerosene,
or an excluded liquid.
(k) (h)
"Kerosene" means all
grades of kerosene, including,
but not limited to, the 2 grades of kerosene, No. 1-K and No. 2-K,
commonly known as K-1 kerosene and K-2 kerosene, respectively,
described in American society for testing and materials
specification D-3699, in effect on January 1, 1999, and kerosene-
type jet fuel described in American society for testing and
materials specification D-1655 and military specifications MIL-T-
5624r and MIL-T-83133d (grades jp-5 and jp-8), and any successor
internal revenue service rules or regulations, as the specification
for kerosene and kerosene-type jet fuel. Kerosene does not include
an excluded liquid.
(l) (i)
"Marine terminal
operator" means a person that stores
fuel at a boat terminal transfer.
(m) (j)
"Pipeline terminal
operator" means a person that
stores fuel in tanks and equipment used in receiving and storing
fuel from interstate and intrastate pipelines pending wholesale
bulk reshipment.
(n) (k)
"Purchase" or
"shipment" does not include an exchange
of fuel or an exchange transaction between refiners, pipeline
terminal operators, or marine terminal operators.
(o) (l) "Refiner"
means a person that manufactures or produces
fuel by any process involving substantially more than the blending
of fuel.
(p) "Terminal" means a motor fuel storage and distribution
facility that meets all of the following requirements:
(i) Is registered as a qualified terminal by the internal
revenue service.
(ii) Is supplied by pipeline or marine vessel.
(iii) Has a rack from which motor fuel may be removed.