H. B. 2882
(By Delegates Kelley, Clements, Walters, Jenkins
Seacrist, Leach and Miller)
(Originating in the Committee on Finance)
[
January 14, 1998
]
A BILL to amend and reenact section four, article fourteen,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; and to further amend
said article by adding thereto a new section, designated
section five-b, all relating generally to gasoline and
special fuel taxes and exemptions from those taxes;
permitting distributors and producers to sell untaxed
gasoline and special fuel to certain entities and
organizations for their exclusive use; requirements to
obtain exemption; privilege to purchase untaxed gasoline and
special fuel subject to suspension or revocation by tax
commissioner; and penalties for noncompliance.
Be it enacted by the Legislative of West Virginia:
That section four, article fourteen, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; and that said article fourteen
be further amended by adding thereto a new section, designated
section five-b, all to read as follows:
ARTICLE 14. GASOLINE AND SPECIAL FUEL EXCISE TAX.
§11-14-4. Computation of tax.
(a) Measure of tax.
(1) A distributor or producer shall use as the measure of
tax all actual metered gallons of gasoline, and all actual
metered gallons of special fuel withdrawn from storage within
this state for sale to any other person, or for delivery to any
retail service station owned or operated by such distributor or
producer, or used as fuel in an internal combustion engine.
A distributor or producer shall use as the measure of tax
all actual metered gallons of special fuel, withdrawn from
storage within this state for use, or sold for the sale for use,
as fuel in an internal combustion engine, or that is sold,
transferred or delivered to its company operated retail storage
or any other retail station or user wherein said special fuel the
storage is for use or for the sale for use as fuel in an internal
combustion engine.
(2) A retail dealer, or importer, or user shall use as the
measure of tax all actual metered gallons of gasoline and all
actual metered gallons of special fuel, not previously included
in the measure of tax, received into his such's person's storage
within this state or used by him as fuel in an internal
combustion engine.
A retail dealer, or importer, or user shall use as the
measure of tax all actual metered gallons of special fuel, not
previously included in the measure of tax, received into his storage within this state wherein said special fuel wherein the
storage is for use or for the sale for use as gasoline or special
fuel in an internal combustion engine, or is used by him as fuel
in an internal combustion engine.
(3) A person who is not a distributor or producer, retail
dealer, importer, or user shall use as the measure of tax all
actual metered gallons of gasoline or special fuel subject to tax
under this article and not previously included in the measure of
tax by him or any other person.
(b) Exemptions. -- There may be subtracted from the measure
of tax determined under subsection (a) of this section, to the
extent included in the measure, the actual metered gallons of
gasoline and special fuel delivered to a purchaser that are
exempt from the tax imposed by this article.
(c) This article shall not be construed to require the
inclusion in the measure of tax of any gasoline or special fuel
previously included in the measure of tax upon which the tax has
been previously paid.
(d) The tax imposed by this article shall be in addition to
all other taxes of whatever character imposed by any other
provisions of law.
§11-14-5b. Exemptions for sales made through special devices.
(a) Where the requirements of this section have been met,
gasoline or special fuel sold by a distributor or producer to a
customer described in subsection (b) of this section through a
special device described in subsection (c) of this section is exempt from the taxes otherwise imposed by this article and
article fifteen of this chapter.
(b) For purposes of this section, "customer" means any of
the following entities that regularly purchase gasoline or
special fuel for nontaxable uses for its exclusive use in
vehicles it owns or leases:
(A) The United States government or any agency thereof;
(B) A municipality in this state;
(C) A county commission in this state;
(D) A county board of education in this state; and
(E) An organization in a county in this state that is
certified annually by the county commission as a bona fide:
(i) volunteer fire department;
(ii) nonprofit ambulance service; or
(iii) nonprofit emergency rescue service.
(c) For purposes of this section, "special device" means a
device, such as a cardlock system, that accurately accounts for
sales of gasoline or special fuel for nontaxable uses that is
maintained by a distributor producer at an attended or unattended
location in this state.
(d)(1) To qualify for the exemption described in subsection
(a) of this section, the distributor or producers must maintain
accurate records that establish to the satisfaction of the tax
commissioner the right to the exemption.
(2) The records must include purchase orders or contracts
for the sale or sales of the gasoline or special fuel or, in the absence of such purchase orders or contracts, a certificate,
signed by an authorized officer of the customer, that the
gasoline or special fuel was purchased for the exclusive use of
an entity described in subsection (b) of this section.
(3) The records must also include, for each nontaxable sale:
(A) The names of the customer and the person to whom the
gasoline or special fuel was delivered.
(B) The date of delivery;
(C) The license number of the vehicle fueled;
(D) The type and quantity of gasoline or special fuel
delivered; and
(E) Such other information as the tax commissioner may
require.
(e)(1) A customer's privilege to purchase nontaxable
gasoline or special fuel through a special device is subject to
suspension or revocation by the tax commissioner.
(2) A customer is required to make and retain such records
of its purchases of gasoline and special fuel through a special
device as may be required by the tax commissioner.
(f) When the tax commissioner determines, as the result of
an audit or investigation, that a customer purchasing gasoline or
special fuel that is exempt from tax under subsection (a) of this
section is reselling the gasoline or special fuel, is using the
gasoline or special fuel for purposes other than the customer's
exclusive use, or is failing to make and retain sufficient and
adequate records showing the quantity of gasoline or special fuel used or consumed for the customer's exclusive use, the tax
commissioner shall suspend the privilege of the customer to
purchase untaxed gasoline or special fuel through any special
device for such period as the tax commissioner by written order
specifies. The order shall be served on the customer in the same
manner as a notice of assessment may be served under article ten
of this chapter. The customer may appeal the order in the same
manner and within the same period of time as a notice of
assessment may be appealed under article ten of this chapter. A
copy of the order and any subsequent change or revision of the
order shall also be served on any distributor or producer that
maintains a special device through which the customer purchases
untaxed gasoline or special fuel.
(g) When the tax commissioner determines, as the result of
an audit or other investigation, that a customer purchasing
gasoline or special fuel that is exempt from tax under subsection
(a) of this section is knowingly and intentionally failing to
comply with any requirements of this section, the tax
commissioner shall by written order revoke the customer's
privilege to purchase untaxed gasoline or special fuel through
any special device. The order of the tax commissioner shall be
served on the customer in the same manner as a notice of
assessment is served under article ten of this chapter. The
customer may appeal the order in the same manner and within the
same period of time as a notice of assessment may be appealed
under article ten of this chapter. A copy of the order and any subsequent change or revision of that order shall also be served
on any distributor or producer that maintains a special device
through which the customer purchases untaxed gasoline or special
fuel.
(h) Notwithstanding the exemption provided under subsection
(a) of this section to the contrary, a customer is liable for the
taxes that would otherwise be imposed by this article and article
fifteen of this chapter on the gasoline or special fuel delivered
to the customer if the customer sells or uses the gasoline or
special fuel in a manner or under circumstances that fails to
meet the requirements of this article for the exemption of the
gasoline or special fuel from taxation.
(I) A customer liable for the taxes described in subsection
(h) of this section shall, in addition to paying the taxes
described in subsection (h) of this section, pay a money penalty
equal to twenty-five percent of the taxes plus interest
calculated beginning with the day the gasoline or special fuel
was received by the customer until the day the taxes, penalty and
interest are paid to the tax commissioner. For each subsequent
sale or use, during a fiscal year, of the gasoline or special
fuel in a manner or under circumstances that fails to meet the
requirements of this article for the exemption of the gasoline or
special fuel from taxation, the purchaser shall pay the taxes and
a money penalty equal to fifty percent of the tax plus interest
calculated in the same manner. For purposes of this section,
gasoline and special fuel is received by the customer when its put into the supply tank of a vehicle owned or leased by the
customer.
(j) A customer liable for the taxes described in subsection
(h) of this section is not entitled to a refund or any credit for
the taxes paid or required to be paid under subsection (I) of
this section.
(k) The exemptions created by this section apply to gasoline
or special fuel received by a customer through a special device
on or after the first day of July, one thousand nine hundred
ninety-seven.
NOTE: The purpose of this bill is to exempt from taxation
gasoline and special fuel sold by distributors and producers
through special devices, such as a cardlock system, to the United
States government, municipalities, county commissions, county
boards of education and organizations in the county certified
annually by the county commission as a bona fide volunteer fire
department, a nonprofit ambulance service or a nonprofit
emergency rescue service.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§11-14-5b is new; therefore, strike-throughs and
underscoring have been omitted.