Reminder ‐ Pennsylvania Fuel Tax License Renewals Due April 19

Apr 16, 2019
Pennsylvania’s fuel tax law requires that new motor fuel permits be issued on an annual basis to all registered distributors. The Department of Revenue contacted all registered distributors earlier
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Reminder ‐ Pennsylvania Fuel Tax License Renewals Due April 19

Apr 16, 2019

Pennsylvania’s fuel tax law requires that new motor fuel permits be issued on an annual basis to all registered distributors. The Department of Revenue contacted all registered distributors earlier this year to let them know the deadline for submitting a new application and surety. For any distributor that has not submitted the renewal application, it is due April 19th.

Crude Oil Exporter Files Suit Claiming Refund of Federal Oil Spill Tax Paid on Exports of CrudeOil

Apr 16, 2019
A crude oil exporter recently filed suit in the United States Court for the Southern District of Texas claiming a refund of federal oil spill taxes paid on domestically produced crude oil that was
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Crude Oil Exporter Files Suit Claiming Refund of Federal Oil Spill Tax Paid on Exports of CrudeOil

Apr 16, 2019

A crude oil exporter recently filed suit in the United States Court for the Southern District of Texas claiming a refund of federal oil spill taxes paid on domestically produced crude oil that was exported from the United States. The suit stems from a refund claim that the Taxpayer filed with the IRS claiming that the tax as imposed on exported crude oil was unconstitutional. The IRS had denied that refund
claim and the IRS Office of Appeals had refused to consider the case, saying that the proper forum was to filed suit in court.

The applicable statute at 26 U.S.C. 4611(b)(1)(A) imposes the federal oil spill tax on “any domestic crude oil that is exported from the United States.” However, the Export Clause of the U.S. Constitution states that “No Tax or Duty shall be laid on Articles exported from any State.” (U.S. Const. Art. I, para 9, cl. 5). This clause has been cited by the Courts of several prior occasions as the basis for declaring a tax on exports unconstitutional, such as the Harbor Maintenance Tax (United States v. U.S. Shoe Corp., 523 U.S. 360 (1998)) and the excise tax on coal (Ranger Fuel Corp. v. U.S. 33 F. Supp.2d 466 (E.D. Va. 1998)). With considerable precedent, it seems logical that the oil spill tax as imposed on exports is also unconstitutional. The IRS disagreed and denied the Taxpayer’s timely refund claim, saying that the Export Clause does not address exports of crude oil from the United States and that the intent of the clause was to prevent taxes on trade between states, not trade between the U.S. and other countries. To be clear, the Export Clause also does not address the export of coal, yet the IRS refused to follow that precedent as well as related IRS guidance such as Notice 2000-28 and IRS Chief Counsel Advice Memo 200211043, both of which discuss the Export Clause in the context of the excise tax on coal.

The Taxpayer sought review of the IRS decision from the IRS Appeals Division, however the IRS Appeals Division said it would not consider a constitutional issue and instructed the Taxpayer to file suit in a court of law.

Export Clause on Crude Oil Exports – Trafigura Trading LLC v. IRS

Apr 15, 2019
Trafigura Trading LLC filed suit against the IRS on January 16, 2019. The complaint seeks a refund of federal oil spill tax on crude oil exported from the United States. According to the complaint,
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Export Clause on Crude Oil Exports – Trafigura Trading LLC v. IRS

Apr 15, 2019

Trafigura Trading LLC filed suit against the IRS on January 16, 2019. The complaint seeks a refund of federal oil spill tax on crude oil exported from the United States. According to the complaint, “the Export Clause renders IRC § 4611(b)’s export tax unconstitutional.”

The IRS position, per the complaint, is that the Export Clause of the U.S. Constitution does not address exporting crude oil from the U.S., and that the intent of the clause was to prevent taxes from being levied on trade between “states.” Trafigura argued that the IRS position is contrary to Supreme Court precedent.

IRS Notice 2000-28 appears to agree with Trafigura’s position. The document cites the export clause of the United States Constitution, art. I, section 9, cl.5, exempting excise tax on a coal producer’s sale where the coal is in the stream of export and actually exported. IRS Chief Counsel Advice memo (200211043) affirms the unconstitutional aspects described in Notice 2000-28 stating: “The coal tax itself was held unconstitutional as applied to exports in Ranger Fuel Corp. v. United States, 33 F. Supp. 2d 466 (E.D. Va. 1998), amended, 1999 U.S. Dist. LEXIS 2141 (E.D. Va. Feb. 10, 1999). Notice 2000-28, 2000-21 I.R.B. 1116, acquiesces, in effect, to Ranger.”

 

OH House Bill 62 Increases Fuel Tax

Apr 05, 2019
Effective July 1, 2019, OH motor fuels tax increases from 28¢ per gallon to 47¢ per gallon and increases the tax on compressed natural gas as follows: (1) Ten cents on and after July 1, 2019,
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OH House Bill 62 Increases Fuel Tax

Apr 05, 2019

Effective July 1, 2019, OH motor fuels tax increases from 28¢ per gallon to 47¢ per gallon and increases the tax on compressed natural gas as follows:

(1) Ten cents on and after July 1, 2019, and before July 1, 2020;
(2) Twenty cents on and after July 1, 2020, and before July 1, 2021;
(3) Thirty cents on and after July 1, 2021, and before July 1, 2022;
(4) Forty cents on and after July 1, 2022, and before July 1, 2023;
(5) Forty-seven cents on and after July 1, 2023.

 

The bill also allows a township to levy an additional $5 annual license tax per motor vehicle.

Alabama Gasoline and Undyed Diesel Fuel Excise Tax Law Changes

Mar 25, 2019
On March 12, 2019, Governor Kay Ivey signed into law Act 2019-2 also known as the Rebuild Alabama Act which levies an additional excise tax on gasoline and undyed diesel effective September 1, 2019.
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Alabama Gasoline and Undyed Diesel Fuel Excise Tax Law Changes

Mar 25, 2019

On March 12, 2019, Governor Kay Ivey signed into law Act 2019-2 also known as the Rebuild Alabama Act which levies an additional excise tax on gasoline and undyed diesel effective September 1, 2019. The changes made regarding the Rebuild Alabama Act are summarized
below.

Tax Increase
Effective September 1, 2019, the gasoline and undyed diesel excise taxes will increase by $.06 per gallon to $.24 per gallon for gasoline and to $.25 per gallon for undyed diesel.

Additional Tax Increases/Indexing
Act 2019-2 also provides for the following additional excise tax rate increases/indexing:
o Effective October 1, 2020 (bringing Act 2019-2 total additional tax to $0.08)
▪ Additional $0.02 gasoline tax
▪ Additional $0.02 diesel tax
o Effective October 1, 2021 (bringing Act 2019-2 total additional tax to $0.10)
▪ Additional $0.02 gasoline tax
▪ Additional $0.02 diesel tax
o Effective October 1, 2023 and on July 1 of every other year thereafter
▪ The gasoline and undyed diesel excise tax rate will be adjusted by the percentage change in the yearly average of the
National Highway Construction Cost Index and rounded to the nearest whole cent with the increase or decrease of the excise
tax rate not exceeding $.01 per gallon.

Tax Return Due Date
The due date of the return and payment for all motor fuel taxes, other than the 3-day voucher and payment as required in Section 40-17-340(d), Code of Alabama, has been changed from the 22nd to the 20th day of the month following the month in which the tax accrues. This change applies to the Blender, Exporter, Importer, and Supplier returns and payments (Alabama Terminal Excise Tax Act 2011-565 and amendments). The due date for the September 2019 period returns and payments is October 21, 2019 (Oct. 20th is on a Sunday).

Floor-Stocks Tax
Any wholesale distributor holding motor fuel in inventory outside of the bulk transfer/terminal system on the effective date of each tax increase levied by this Act shall be liable for the additional excise tax. A floor-stocks tax return shall be filed and the tax paid on or before the last day of the third month following the tax increase. The floor-stocks tax return and payment for the tax increase effective September 1, 2019 shall be due on or before December 31, 2019.

Questions
If you have any questions pertaining to this notice, please contact this office at the address or telephone number shown below or via email at mft@revenue.alabama.gov.

BUSINESS & LICENSE TAX DIVISION
MOTOR FUELS SECTION
P. O. BOX 327540
MONTGOMERY, ALABAMA 36132-7540
(334) 242-9608
(334) 242-1199 (Fax)

Texas Crude Oil & Natural Gas Electronic Tax Filing Software and Petro Imports

Mar 19, 2019
Texas EDI News, March 2019 New Crude Oil & Natural Gas Electronic Tax Filing Software Effective April 28, 2019, we will release a new version of the Texas Comptroller’s filing software that
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Texas Crude Oil & Natural Gas Electronic Tax Filing Software and Petro Imports

Mar 19, 2019

Texas EDI News, March 2019

New Crude Oil & Natural Gas Electronic Tax Filing Software

Effective April 28, 2019, we will release a new version of the Texas Comptroller’s filing software that allows you to enter crude oil producer and purchaser reports for crude oil leases claiming multiple oil exemptions on the same lease.

New Petro Import and Preload Templates
The new software download will include updates to the import and preload templates for taxpayers who elect to use them. The new templates will be used for both crude oil and natural gas severance tax filers even though only crude oil taxpayers will have new capabilities. Our software installer program automatically saves the templates to C:\ProgramData\TexasCPA\Petro50.

Third-party or Proprietary Software
If you create or use third-party or proprietary software to create the EDI files, please review the new EDI maps. When you are ready to test your EDI files, please email them to us.
More Information

For EDI questions, please email us or call 800-442-3453.

For Crude Oil or Natural Gas tax questions, you can also email us or call 800-531-5441, ext. 3-4455.

Changes to IRS ExSTARS System

Mar 04, 2019
The IRS recently announced that ExSTARS version 2.3.0 is now running in production to process the ExSTARS EDI files submitted.  Many of the changes will be transparent, however there are a few items
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Changes to IRS ExSTARS System

Mar 04, 2019

The IRS recently announced that ExSTARS version 2.3.0 is now running in production to process the ExSTARS EDI files submitted.  Many of the changes will be transparent, however there are a few items worth noting.

Most errors which previously would have generated a 997E (accepted with errors) return file will now result in a 997A (accepted).  In those cases, you will also receive a 151 which indicates what, if any, errors were contained in the file.  Please note that even though you have a 997A, you may still have must fix errors that must be corrected before your next filing.  The IRS has also enhanced its software to provide the help desk with more details in the event the system generates a 997R (rejected) file.  This will aid the help desk in quickly identifying the problem so they can then contact the filers to help them resolve the issue.

The new system will now accept book adjustment receipts into all products.  Filers can begin the process of transferring their reported inventories out of the substitute product codes and back into the normal product codes:

For example, say last month you reported and ending inventory of 1,000,000 gallons of S92.  This month you would report a transaction on the disbursement schedule 15B in the amount of 1,000,000 gallons under product S92 with a mode of BA .  Also report a receipt transaction on schedule 15A in the amount of 1,000,000 gallons under product 092 with a mode of BA.

Also, don’t forget to make sure that any product code conversions you may have specified which utilize the substitute product codes are updated to once again use the corresponding approved codes.  Please note you have until 10/1/2019 to make these changes.

Since the change, the IRS has seen a number of cases where filings have generated errors due to missing gross gallons.  Please ensure that you are populating the gross quantities in all required cases.  If the values are in your system but not in the edi file submitted, you may need to contact your software provider as they may need to update their software.

Finally with the new updates, the IRS is now validating the vessel number information provided.  Currently invalid numbers will result in a warning.  Starting 10/1/2019 they will result in must fix errors.  In the new system, you will receive more details on what the incorrect value is, helping you to locate the transactions with the incorrect values quicker so they can be fixed.

Details on acceptable numbers and proper formatting can be found in the IRS Facts section at  https://www.irs.gov/businesses/small-businesses-self-employed/vessel-identification-numbers.

Two good websites to aid in validating individual numbers are the US Coast Guard website at https://cgmix.uscg.mil/PSIX/PSIXSearch.aspx and the Equasis website at http://www.equasis.org/EquasisWeb/public/HomePage

 

Tax Extenders Introduced in the Senate

Mar 01, 2019
A package of tax extenders was introduced in the Senate yesterday by Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Ron Wyden (D-OR). The as yet unnumbered “Tax Extender and
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Tax Extenders Introduced in the Senate

Mar 01, 2019

A package of tax extenders was introduced in the Senate yesterday by Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Ron Wyden (D-OR). The as yet unnumbered “Tax Extender and Disaster Relief of Act of 2019” proposes, among other provisions:

  • a retroactive extension of the biodiesel and renewable diesel credits through December 31, 2019;
  • a retroactive extension and clarification of the alternative fuel and alternative fuel mixture credits through December 31, 2019. The clarification is language that states that an alternative fuel mixture credit is not available to mixtures of that contain liquefied petroleum gas, compressed or liquefied natural gas and compressed or liquefied gas derived from biomass. The clarifying language applies on a forward basis and will not affect credits being claimed for the retroactive period;
  • extension of the oil spill tax through 2019. The tax would be reinstated on the 1st day of the calendar month following enactment of the legislation.

The introduction of the legislation does not necessarily mean that extenders will be enacted anytime soon. The House Ways and Means Committee Chairman Richard Neal (D-MA) has indicated that he wants to take time to review each provision and hold a hearing in March.

The text of the Senate proposal can be found at: https://www.finance.senate.gov/imo/media/doc/116.S.xxx%20-%20Tax%20Extender%20and%20Disaster%20Relief%20Act%20of%202019%20-%20MCG19154.pdf