Colonial Pipeline Shutdown – Federal and State Actions

May 12, 2021

In the wake of the Colonial Pipeline ransomware attack and subsequent shutdown, federal and state government has taken steps to alleviate the impact. The Federal Highway Administration has eased trucking restrictions with many states along the Pipeline route, including Georgia and North Carolina, doing the same. The Environmental Protection Agency has eased fuel regulations related to Reid vapor pressure. The Department of Transportation is surveying the capabilities of U.S.-flagged vessels to transport fuel and may ask the Department of Homeland Security for a waiver of the Jones Act to allow foreign flagged vessels to transport fuel between points in the United States (this despite a tightening of the Jones Act waiver rules at the end of 2020.)

At the state level, Georgia has suspended collection of its motor fuel tax on gasoline and diesel. The suspension is effective from 9.45pm EST May 10, 2021 through May 15, 2021. During this time, no distributor need collect and remit motor fuel tax on sales of gasoline and diesel to an unlicensed customer. The Tennessee Department of Revenue has advised that during the period of Georgia’s motor fuel tax being suspended, all exports of gasoline and diesel from Tennessee to Georgia via truck must remit the Tennessee fuel tax under that state’s destination state tax rule. The Florida Department of Revenue has advised that it is considering waiving its destination state tax rule with respect to exports to Georgia during the period of Georgia’s motor fuel tax suspension. In addition, Georgia, Virginia, and North Carolina have declared a state of emergency, waiving certain transportation regulations, and activating price gouging rules.