Bill Text: MI HB4539 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Sales tax; collections; collection of sales tax on gasoline; eliminate. Amends sec. 6a of 1933 PA 167 (MCL 205.56a) & adds sec. 4ee.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-12-31 - Assigned Pa 467'14 2014 Addenda [HB4539 Detail]
Download: Michigan-2013-HB4539-Introduced.html
HOUSE BILL No. 4539
April 11, 2013, Introduced by Rep. Schmidt and referred to the Committee on Transportation and Infrastructure.
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 and
by adding section 4ee.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4ee. Beginning on the effective date of the amendatory
act that added this section, a person subject to the tax under this
act may exclude from the gross proceeds used for computation of the
tax the sale of gasoline or diesel fuel. As used in this section,
"gasoline" and "diesel fuel" mean those terms as defined in section
6a.
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 Before the
effective date of the amendatory act that added section 4ee,
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 April 1, 2013 and before the effective date of
the amendatory act that added section 4ee, 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 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 Before the
effective date of the amendatory act that added section 4ee,
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 Before the
effective date of the amendatory act that added section 4ee,
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 and before the effective date of
the amendatory act that added section 4ee, 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) "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.
(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.
(e) "Excluded liquid" means that term as defined in 26 CFR
48.4081-1.
(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.
(g) "Gasoline" means and includes gasoline, alcohol, gasohol,
casing head or natural gasoline, benzol, benzine, naphtha,
methanol, 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.
(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.
(i) "Marine terminal operator" means a person that stores fuel
at a boat terminal transfer.
(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.
(k) "Purchase" or "shipment" does not include an exchange of
fuel or an exchange transaction between refiners, pipeline terminal
operators, or marine terminal operators.
(l) "Refiner" means a person that manufactures or produces fuel
by any process involving substantially more than the blending of
fuel.
