Bill Text: TX SB1557 | 2017-2018 | 85th Legislature | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the administration of gasoline and diesel fuel motor fuels taxes and the fee on the delivery of certain petroleum products.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Passed) 2017-06-09 - Effective on 1/1/18 [SB1557 Detail]

Download: Texas-2017-SB1557-Comm_Sub.html

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By: Kolkhorst S.B. No. 1557
(Shine, Darby)

A BILL TO BE ENTITLED
AN ACT
relating to the administration of gasoline and diesel fuel motor
fuels taxes and the fee on the delivery of certain petroleum
products.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 162.012(a), Tax Code, is amended to read
as follows:
(a) A person licensed under this chapter or required to be
licensed under this chapter, or other user, who fails to keep a
record, issue an invoice, or file a return or report required by
this chapter is presumed to have sold or used for taxable purposes
all motor fuel shown by an audit by the comptroller to have been
sold to the license holder or other user. Motor fuel unaccounted
for is presumed to have been sold or used for taxable purposes. If
an exporter claims an exemption under Section 162.104(a)(4)
[162.104(a)(4)(B)] or 162.204(a)(4) [162.204(a)(4)(B)] and fails
to report subsequent tax-free sales in this state of the motor fuel
for which the exemption was claimed as required by Section 162.1155
or 162.2165, or to produce proof of payment of tax to the
destination state or proof that the transaction was exempt in the
destination state, the exporter is presumed to have not paid the
destination state's tax or this state's tax on the [exported] motor
fuel and the comptroller shall assess the tax imposed by this
chapter on the [exported] motor fuel against the exporter. The
comptroller may fix or establish the amount of taxes, penalties,
and interest due this state from the records of deliveries or from
any records or information available. If a tax claim, as developed
from this procedure, is not paid, after the opportunity to request a
redetermination, the claim and any audit made by the comptroller or
any report filed by the license holder or other user is evidence in
any suit or judicial proceedings filed by the attorney general and
is prima facie evidence of the correctness of the claim or audit. A
prima facie presumption of the correctness of the claim may be
overcome at the trial by evidence adduced by the license holder or
other user.
SECTION 2. Section 162.101, Tax Code, is amended by adding
Subsections (e-1) and (e-2) to read as follows:
(e-1) A tax is imposed on gasoline that is otherwise exempt
from taxation under Section 162.104(a)(4) or (7) if the gasoline is
sold in this state to a person who does not hold a license under
Section 162.105(1), (2), (3), (4), or (6). The person that sold the
gasoline is liable for and shall collect the tax.
(e-2) A tax is imposed on gasoline that is otherwise exempt
from taxation under Section 162.104(a)(4) or (7) if before export
the gasoline is sold in this state to a person who holds a license
under Section 162.105(1), (2), (3), (4), or (6) and the gasoline is
delivered to a destination in this state. The person that
redirected the delivery of the gasoline to a destination in this
state is liable for and shall pay the tax.
SECTION 3. Sections 162.104(a), (d), and (f), Tax Code, are
amended to read as follows:
(a) The tax imposed by this subchapter does not apply to
gasoline:
(1) sold to the United States for its exclusive use,
provided that the exemption does not apply with respect to fuel sold
or delivered to a person operating under a contract with the United
States;
(2) sold to a public school district in this state for
the district's exclusive use;
(3) sold to a commercial transportation company or a
metropolitan rapid transit authority operating under Chapter 451,
Transportation Code, that provides public school transportation
services to a school district under Section 34.008, Education Code,
and that uses the gasoline only to provide those services;
(4) exported by either a licensed supplier or a
licensed exporter from this state to any other state, provided
that[:
[(A) for gasoline in a situation described by
Subsection (d),] the bill of lading indicates the destination state
and the supplier collects the destination state tax[; or
[(B) for gasoline in a situation described by
Subsection (e), the bill of lading indicates the destination state,
the gasoline is subsequently exported, and the exporter is licensed
in the destination state to pay that state's tax and has an
exporter's license issued under this subchapter];
(5) moved by truck or railcar between licensed
suppliers or licensed permissive suppliers and in which the
gasoline removed from the first terminal comes to rest in the second
terminal, provided that the removal from the second terminal rack
is subject to the tax imposed by this subchapter;
(6) delivered or sold into a storage facility of a
licensed aviation fuel dealer from which gasoline will be delivered
solely into the fuel supply tanks of aircraft or aircraft servicing
equipment, or sold from one licensed aviation fuel dealer to
another licensed aviation fuel dealer who will deliver the aviation
fuel exclusively into the fuel supply tanks of aircraft or aircraft
servicing equipment;
(7) exported to a foreign country if the bill of lading
indicates the foreign destination and the fuel is actually exported
to the foreign country;
(8) sold to a volunteer fire department in this state
for the department's exclusive use; or
(9) sold to a nonprofit entity that is organized for
the sole purpose of and engages exclusively in providing emergency
medical services and that uses the gasoline exclusively to provide
emergency medical services, including rescue and ambulance
services.
(d) Subsection (a)(4) [(a)(4)(A)] applies only if the
destination state recognizes, by agreement with this state or by
statute or rule, a supplier in this state as a valid taxpayer for
the motor fuel being exported to that state from this state. The
comptroller shall publish a list that specifies for each state,
other than this state, whether that state does or does not qualify
under this subsection.
(f) The exemption provided by Subsection (a)(4) [(a)(4)(A)]
does not apply to a sale by a distributor.
SECTION 4. Section 162.115(d), Tax Code, is amended to read
as follows:
(d) An exporter shall keep:
(1) a record showing the number of gallons of:
(A) all gasoline inventories on hand at the first
of each month;
(B) all gasoline compounded or blended;
(C) all gasoline purchased or received, showing
the name of the seller and the date of each purchase or receipt;
(D) all gasoline sold, distributed, or used,
showing the name of the purchaser and the date of the sale or use;
and
(E) all gasoline lost by fire, theft, or
accident;
(2) an itemized statement showing by load the number
of gallons of all gasoline:
(A) received during the preceding calendar month
for export and the location of the loading; and
(B) exported from this state by destination state
or country;
(3) proof of payment of tax to the destination state in
a form acceptable to the comptroller; and
(4) if an exemption under Section 162.104(a)(4)
[162.104(a)(4)(B)] is claimed, proof of payment of tax to the
destination state or proof that the transaction was exempt in the
destination state, in a form acceptable to the comptroller.
SECTION 5. Subchapter B, Chapter 162, Tax Code, is amended
by adding Section 162.1155 to read as follows:
Sec. 162.1155. DUTY TO REPORT SUBSEQUENT SALES OF TAX-FREE
GASOLINE PURCHASED FOR EXPORT. (a) A person who purchases or
removes gasoline tax-free under Section 162.104(a)(4) or (7) and
before export sells the gasoline in this state tax-free to a person
who holds a license under Section 162.105(1), (2), (3), (4), or (6)
shall report that transaction to the comptroller as required by
this section. If the gasoline is subsequently sold one or more
times in this state before export and tax-free to a person who holds
a license under Section 162.105(1), (2), (3), (4), or (6), each
seller shall report the transaction to the comptroller as required
by this section.
(b) Each person who sells tax-free gasoline in this state in
a transaction described by Subsection (a) must provide to the
comptroller:
(1) the bill of lading number issued at the terminal;
(2) the terminal control number;
(3) the date the gasoline was removed from the
terminal;
(4) the number of gallons invoiced; and
(5) any other information required by the comptroller.
(c) The sales invoice for each transaction described by
Subsection (a) must include:
(1) the name of the seller and purchaser; and
(2) the original bill of lading number.
(d) A person required to report a transaction under
Subsection (a) shall report the transaction on a form prescribed by
the comptroller and with the return required by Section 162.114.
SECTION 6. Section 162.201, Tax Code, is amended by adding
Subsections (e-1) and (e-2) to read as follows:
(e-1) A tax is imposed on diesel fuel that is otherwise
exempt from taxation under Section 162.204(a)(4) or (7) if the
diesel fuel is sold in this state to a person who does not hold a
license under Section 162.205(a)(1), (2), (3), (4), or (6). The
person that sold the diesel fuel is liable for and shall collect the
tax.
(e-2) A tax is imposed on diesel fuel that is otherwise
exempt from taxation under Section 162.204(a)(4) or (7) if before
export the diesel fuel is sold in this state to a person who holds a
license under Section 162.205(a)(1), (2), (3), (4), or (6) and the
diesel fuel is delivered to a destination in this state. The person
that redirected the delivery of the diesel fuel to a destination in
this state is liable for and shall pay the tax.
SECTION 7. Sections 162.204(a), (d), and (f), Tax Code, are
amended to read as follows:
(a) The tax imposed by this subchapter does not apply to:
(1) diesel fuel sold to the United States for its
exclusive use, provided that the exemption does not apply to diesel
fuel sold or delivered to a person operating under a contract with
the United States;
(2) diesel fuel sold to a public school district in
this state for the district's exclusive use;
(3) diesel fuel sold to a commercial transportation
company or a metropolitan rapid transit authority operating under
Chapter 451, Transportation Code, that provides public school
transportation services to a school district under Section 34.008,
Education Code, and that uses the diesel fuel only to provide those
services;
(4) diesel fuel exported by either a licensed supplier
or a licensed exporter from this state to any other state, provided
that[:
[(A) for diesel fuel in a situation described by
Subsection (d),] the bill of lading indicates the destination state
and the supplier collects the destination state tax[; or
[(B) for diesel fuel in a situation described by
Subsection (e), the bill of lading indicates the destination state,
the diesel fuel is subsequently exported, and the exporter is
licensed in the destination state to pay that state's tax and has an
exporter's license issued under this subchapter];
(5) diesel fuel moved by truck or railcar between
licensed suppliers or licensed permissive suppliers and in which
the diesel fuel removed from the first terminal comes to rest in the
second terminal, provided that the removal from the second terminal
rack is subject to the tax imposed by this subchapter;
(6) diesel fuel delivered or sold into a storage
facility of a licensed aviation fuel dealer from which the diesel
fuel will be delivered solely into the fuel supply tanks of aircraft
or aircraft servicing equipment, or sold from one licensed aviation
fuel dealer to another licensed aviation fuel dealer who will
deliver the diesel fuel exclusively into the fuel supply tanks of
aircraft or aircraft servicing equipment;
(7) diesel fuel exported to a foreign country if the
bill of lading indicates the foreign destination and the fuel is
actually exported to the foreign country;
(8) dyed diesel fuel sold or delivered by a supplier to
another supplier and dyed diesel fuel sold or delivered by a
supplier or distributor into the bulk storage facility of a dyed
diesel fuel bonded user or to a purchaser who provides a signed
statement as provided by Section 162.206;
(9) the volume of water, fuel ethanol, renewable
diesel, biodiesel, or mixtures thereof that are blended together
with taxable diesel fuel when the finished product sold or used is
clearly identified on the retail pump, storage tank, and sales
invoice as a combination of diesel fuel and water, fuel ethanol,
renewable diesel, biodiesel, or mixtures thereof;
(10) dyed diesel fuel sold by a supplier or permissive
supplier to a distributor, or by a distributor to another
distributor;
(11) dyed diesel fuel delivered by a license holder
into the fuel supply tanks of railway engines, motorboats, or
refrigeration units or other stationary equipment powered by a
separate motor from a separate fuel supply tank;
(12) dyed kerosene when delivered by a supplier,
distributor, or importer into a storage facility at a retail
business from which all deliveries are exclusively for heating,
cooking, lighting, or similar nonhighway use;
(13) diesel fuel used by a person, other than a
political subdivision, who owns, controls, operates, or manages a
commercial motor vehicle as defined by Section 548.001,
Transportation Code, if the fuel:
(A) is delivered exclusively into the fuel supply
tank of the commercial motor vehicle; and
(B) is used exclusively to transport passengers
for compensation or hire between points in this state on a fixed
route or schedule;
(14) diesel fuel sold to a volunteer fire department
in this state for the department's exclusive use; or
(15) diesel fuel sold to a nonprofit entity that is
organized for the sole purpose of and engages exclusively in
providing emergency medical services and that uses the diesel fuel
exclusively to provide emergency medical services, including
rescue and ambulance services.
(d) Subsection (a)(4) [(a)(4)(A)] applies only if the
destination state recognizes, by agreement with this state or by
statute or rule, a supplier in this state as a valid taxpayer for
the motor fuel being exported to that state from this state. The
comptroller shall publish a list that specifies for each state,
other than this state, whether that state does or does not qualify
under this subsection.
(f) The exemption provided by Subsection (a)(4) [(a)(4)(A)]
does not apply to a sale by a distributor.
SECTION 8. Section 162.216(d), Tax Code, is amended to read
as follows:
(d) An exporter shall keep:
(1) a record showing the number of gallons of:
(A) all diesel fuel inventories on hand at the
first of each month;
(B) all diesel fuel compounded or blended;
(C) all diesel fuel purchased or received,
showing the name of the seller and the date of each purchase or
receipt;
(D) all diesel fuel sold, distributed, or used,
showing the name of the purchaser and the date of the sale or use;
and
(E) all diesel fuel lost by fire, theft, or
accident;
(2) an itemized statement showing by load the number
of gallons of all diesel fuel:
(A) received during the preceding calendar month
for export and the location of the loading; and
(B) exported from this state, by destination
state or country;
(3) proof of payment of tax to the destination state in
a form acceptable to the comptroller; and
(4) if an exemption under Section 162.204(a)(4)
[162.204(a)(4)(B)] is claimed, proof of payment of tax to the
destination state or proof that the transaction was exempt in the
destination state, in a form acceptable to the comptroller.
SECTION 9. Subchapter C, Chapter 162, Tax Code, is amended
by adding Section 162.2165 to read as follows:
Sec. 162.2165. DUTY TO REPORT SUBSEQUENT SALES OF TAX-FREE
DIESEL FUEL PURCHASED FOR EXPORT. (a) A person who purchases or
removes diesel fuel tax-free under Section 162.204(a)(4) or (7) and
before export sells the diesel fuel in this state tax-free to a
person who holds a license under Section 162.205(a)(1), (2), (3),
(4), or (6) shall report that transaction to the comptroller as
required by this section. If the diesel fuel is subsequently sold
one or more times in this state before export and tax-free to a
person who holds a license under Section 162.205(a)(1), (2), (3),
(4), or (6), each seller shall report the transaction to the
comptroller as required by this section.
(b) Each person who sells tax-free diesel fuel in this state
in a transaction described by Subsection (a) must provide to the
comptroller:
(1) the bill of lading number issued at the terminal;
(2) the terminal control number;
(3) the date the diesel fuel was removed from the
terminal;
(4) the number of gallons invoiced; and
(5) any other information required by the comptroller.
(c) The sales invoice for each transaction described by
Subsection (a) must include:
(1) the name of the seller and purchaser; and
(2) the original bill of lading number.
(d) A person required to report a transaction under
Subsection (a) shall report the transaction on a form prescribed by
the comptroller and with the return required by Section 162.215.
SECTION 10. Section 162.401, Tax Code, is amended by adding
Subsections (e) and (f) to read as follows:
(e) In addition to any other penalty authorized by this
section, a person who fails to report a subsequent sale in this
state of tax-free motor fuel purchased for export as required by
Section 162.1155 or 162.2165 shall pay for each sale that is not
reported a penalty of $200. The penalty provided by this subsection
is not assessed if the taxpayer files an amended report that
includes the sale not later than the 180th day after the due date of
the original report of the sale.
(f) In addition to any other penalty authorized by this
section, a person who fails to pay the tax imposed by Section
162.101(e-2) or 162.201(e-2) when due shall pay a penalty equal to
the greater of $2,000 or five times the amount of the tax due on the
motor fuel.
SECTION 11. Section 26.3574(a), Water Code, is amended by
amending Subdivision (1) and adding Subdivision (2-a) to read as
follows:
(1) "Bulk facility" means a facility in this state,
including pipeline terminals, refinery terminals, rail and barge
terminals, and associated underground and aboveground tanks,
connected or separate, from which petroleum products are withdrawn
from bulk and delivered into a cargo tank or a barge used to
transport those products. This term does not include petroleum
products consumed at an electric generating facility.
(2-a) "Supplier" has the meaning assigned by Section
162.001, Tax Code.
SECTION 12. Sections 26.3574(b), (d), (e), (f), (g), (i),
and (j), Water Code, are amended to read as follows:
(b) A fee is imposed on the delivery of a petroleum product
on withdrawal from bulk of that product as provided by this
subsection. Each supplier [operator of a bulk facility] on
withdrawal from bulk of a petroleum product shall collect from the
person who orders the withdrawal a fee in an amount determined as
follows:
(1) not more than $3.75 for each delivery into a cargo
tank having a capacity of less than 2,500 gallons;
(2) not more than $7.50 for each delivery into a cargo
tank having a capacity of 2,500 gallons or more but less than 5,000
gallons;
(3) not more than $11.75 for each delivery into a cargo
tank having a capacity of 5,000 gallons or more but less than 8,000
gallons;
(4) not more than $15.00 for each delivery into a cargo
tank having a capacity of 8,000 gallons or more but less than 10,000
gallons; and
(5) not more than $7.50 for each increment of 5,000
gallons or any part thereof delivered into a cargo tank having a
capacity of 10,000 gallons or more.
(d) A person who imports a petroleum product in a cargo tank
or a barge destined for delivery into an underground or aboveground
storage tank, regardless of whether or not the tank is exempt from
regulation under Section 26.344 [of this code], other than a
storage tank connected to or part of a bulk facility in this state,
shall pay to the comptroller a fee on the number of gallons
imported, computed as provided by Subsections (b) and (c) [of this
section]. If a supplier [bulk facility operator] imports a
petroleum product in a cargo tank or a barge, the supplier [bulk
facility operator] is not required to pay the fee on that imported
petroleum product if the petroleum product is delivered to a bulk
facility from which the petroleum product will be withdrawn from
bulk.
(e) A supplier [bulk facility operator] who receives
petroleum products on which the fee has been paid may take credit
for the fee paid on monthly reports.
(f) Subsection (b) [of this section] does not apply to a
delivery of a petroleum product destined for export from this state
if the petroleum product is in continuous movement to a destination
outside this state. For purposes of this subsection, a petroleum
product ceases to be in continuous movement to a destination
outside this state if the product is delivered to a destination in
this state. The person that directs the delivery of the product to
a destination in this state shall pay the fee imposed by this
section on that product.
(g) Each supplier [operator of a bulk facility] and each
person covered by Subsection (d) [of this section] shall file an
application with the comptroller for a permit to deliver a
petroleum product into a cargo tank destined for delivery to an
underground or aboveground storage tank, regardless of whether or
not the tank is exempt from regulation under Section 26.344 [of this
code]. A permit issued by the comptroller under this subsection is
valid on and after the date of its issuance and until the permit is
surrendered by the holder or canceled by the comptroller. An
applicant for a permit issued under this subsection must use a form
adopted or approved by the comptroller that contains:
(1) the name under which the applicant transacts or
intends to transact business;
(2) the principal office, residence, or place of
business in this state of the applicant;
(3) if the applicant is not an individual, the names of
the principal officers of an applicant corporation, or the name of
the member of an applicant partnership, and the office, street, or
post office address of each; and
(4) any other information required by the comptroller.
(i) Each supplier [operator of a bulk facility] and each
person covered by Subsection (d) [of this section] shall:
(1) list, as a separate line item on an invoice or
cargo manifest required under this section, the amount of the
delivery fee due under this section; and
(2) on or before the 25th day of the month following
the end of each calendar month, file a report with the comptroller
and remit the amount of fees required to be collected or paid during
the preceding month.
(j) Each supplier [operator of a bulk facility] or the
supplier's [his] representative and each person covered by
Subsection (d) [of this section] shall prepare the report required
under Subsection (i) [of this section] on a form provided or
approved by the comptroller.
SECTION 13. The following provisions of the Tax Code are
repealed:
(1) Sections 162.104(c) and (e); and
(2) Sections 162.204(c) and (e).
SECTION 14. The amendments made by this Act to Sections
162.101 and 162.201, Tax Code, are a clarification of existing law
and do not imply that existing law may be construed as inconsistent
with the law as amended by this Act.
SECTION 15. The changes in law made by this Act do not
affect tax liability accruing before the effective date of this
Act. That liability continues in effect as if this Act had not been
enacted, and the former law is continued in effect for that purpose.
SECTION 16. This Act takes effect January 1, 2018.