HOUSE BILL No. 5807 May 17, 2000, Introduced by Reps. Rick Johnson, Scranton, Gilbert, Birkholz, Allen, Julian, Van Woerkom, Pappageorge, Sheltrown, Patterson, Jellema, Mead and Kelly and referred to the Committee on Transportation. A bill to amend 1927 PA 150, entitled "An act to prescribe a privilege tax for the use of the public highways by owners and drivers of motor vehicles by imposing a specific tax upon the sale or use, within the state of Michigan, of motor fuel; to prescribe the manner and the time of paying this tax and the duties of officials and others respecting the payment and collection of this tax; to provide for the licensing of wholesale distributors, certain retail dealers, exporters, and suppliers as defined in this act; to fix a time when this tax and interest and penalties thereon become a lien upon the property of persons, firms, partnerships, associations, or corporations, subject to the payment of this tax; to provide for the enforce- ment of this lien; to permit the inspection and testing of petro- leum products; to provide for certain exemptions and refunds and for the disposition of the proceeds of this tax; and to prescribe penalties for the violation of this act," by amending sections 8, 22, and 34 (MCL 207.108, 207.122, and 207.134), sections 8 and 34 as amended by 1997 PA 83 and section 22 as amended by 1998 PA 29. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 8. (1) For the purpose of determining the amount of 2 the specific tax imposed by this act, every supplier shall, on or 06176'00 TJS 2 1 before the twentieth day of each month, except when the twentieth 2 day of any month falls on a Saturday, Sunday, or legal holiday, 3 then on the next regular business day, file with the department 4 of treasury, on forms prescribed and furnished by the department, 5 a verified statement, showing the number of gallons of gasoline 6 or diesel motor fuel received, as shown by the terminal operator 7 issued shipping paper or the customs declaration if entered into 8 the United States, by the supplier in this state, or for export 9 to this state, during the preceding calendar month; the date of 10 purchase; the name of the manufacturer or person from whom pur- 11 chased by the supplier; the date of receipt of the shipment of 12 gasoline or diesel motor fuel; the terminal of origin; the state 13 of destination of each shipment as represented to the supplier by 14 the purchaser or the purchaser's agent, or if shipped on account 15 of the supplier as shown in the supplier's records conforming 16 with shipping papers in such form as the department may provide; 17 the quantity of each of the purchases or shipments; the name and 18 federal employer identification number of the carrier; the number 19 of the car in which the purchases or shipments were shipped, if 20 shipped by rail, or the name and owner of the boat, ship, barge, 21 or vessel, if shipped by water; the owner of the automobile or 22 truck used in transporting the gasoline or diesel motor fuel 23 within this state, when the gasoline or diesel motor fuel was 24 purchased from the manufacturer; the quantity of gasoline or 25 diesel motor fuel received by the supplier and sold tax exempt to 26 each wholesale distributor and each other purchaser; and the 27 exemption certificate number of each wholesale distributor to 06176'00 3 1 which the supplier sold tax exempt gasoline or diesel motor 2 fuel. If the supplier manufactures or produces within this state 3 the gasoline or diesel motor fuel in his, her, or its possession 4 in the state, the report required shall in lieu of the foregoing 5 information set forth the following: All gasoline or diesel 6 motor fuel manufactured, stored, used, distributed, and sold 7 within this state during the preceding calendar month, and date 8 of each sale, use, or distribution; the quantity of each sale; 9 the name and address of each purchaser; the name of the carrier; 10 the number of the car in which the purchases or shipments were 11 shipped, if shipped by rail; or the name and owner of the boat, 12 ship, barge, or vessel, if shipped by water; the owner and 13 license number of the automobile or truck used in transporting 14 the gasoline or diesel motor fuel; the name and address of the 15 owner of the means of transportation employed in the delivery of 16 the gasoline or diesel motor fuel so sold or distributed within 17 this state, and any other information pertaining to receipts, 18 manufacture, use, distribution, or sales of gasoline or diesel 19 motor fuel as the department requires. Each supplier, at the 20 time of filing a report, shall compute the amount of tax payable 21 on gallons received by that supplier during the reporting period 22 at the applicable rate of tax per gallon, and shall pay to the 23 department at the time of filing the report the full amount of 24 the tax. A supplier shall not claim a deduction from taxable 25 gallons for gallons actually purchased by the customer notwith- 26 standing that the supplier has issued a correction, credit, or 27 rebilling to a customer adjusting tax liability. In computing 06176'00 4 1 the number of taxable gallons, each licensed supplier shall be 2 entitled to a deduction equal to the number of gallons of taxable 3 gasoline and diesel motor fuel sold other than gasoline sold to a 4 retailer by the supplier as to which the amount of tax paid by 5 the supplier has become uncollectible from a wholesale distribu- 6 tor, a retail dealer, or an end consumer with whom the supplier 7 has a sales or other contractual relationship. The department 8 shall establish the evidence which a supplier must provide in 9 support of the uncollectible account deduction. Such regulations 10 shall not require that the supplier specifically identify each 11 sale giving rise to the deduction for uncollectible accounts. 12 However, such regulations shall provide that the deduction is 13 supported by statistical evidence and is consistent with the tax 14 treatment for bad debts under section 166 of the internal revenue 15 code.However, in the case of diesel motor fuel the amount of16tax payable shall be reduced by the amount of discount allowed17under section 22 for each gallon sold by the supplier.A sup- 18 plier who uses or sells combustible gas used in the generation of 19 power for the propulsion of a motor vehicle, airplane, or motor- 20 boat shall file the monthly return required by this section. 21 (2) The tax imposed by this act which is measured by gallons 22 received by a supplier at the time of withdrawal from a terminal 23 or imported from without the United States shall operate in the 24 same manner as the tax imposed by section 4081 of the internal 25 revenue code. In computing the tax all gasoline or diesel motor 26 fuel while in process of transfer from tank steamers at boat 27 terminal transfers and while held in storage, pending wholesale 06176'00 5 1 bulk distribution by land transportation, or in tanks and 2 equipment used in receiving and storing gasoline or diesel motor 3 fuel from interstate pipelines pending wholesale bulk reshipment, 4 shall be exempt from the payment of the tax. 5 (3) In computing the tax, a deduction of 2% of the quantity 6 of gasoline received by the supplier before October 1, 1997 and 7 1.5% received by the supplier after September3130, 1997, 8 shall be deducted by the supplier to allow for the cost of remit- 9 ting the tax. At the time of filing the report and paying the 10 tax, the supplier shall submit satisfactory evidence to the 11 department with respect to sales to wholesale distributors that 12 the amount of tax represented by the deduction was paid or cred- 13 ited to the wholesale distributor that purchased the gasoline 14 from the supplier. The amount of the deduction shall be paid or 15 credited by each wholesale distributor to the purchaser at each 16 subsequent sale to a wholesale distributor. When a wholesale 17 distributor or supplier sells gasoline to a retail dealer, the 18 wholesale distributor or supplier shall pay or credit to the 19 retail dealer the 1/3 of the deduction on quantities sold to that 20 retail dealer. 21 (4) The supplier and the terminal operator shall be entitled 22 to rely for all purposes of this act on the representation by the 23 exporter or the exporter's agent as to the exporter's intended 24 state of destination, and the exporter and his or her agent, not 25 the supplier or terminal operator, shall be exclusively liable 26 for any tax otherwise due to the state as a result of a diversion 27 of the cargo from the represented destination state. 06176'00 6 1 (5) The commissioner may require a taxpayer to remit taxes 2 by electronic funds transfer if the taxpayer is subject to tax 3 under this act. 4 Sec. 22.(1) There shall be allowed a discount of 6 cents5per gallon of the tax imposed on diesel motor fuel pursuant to6section 2(1) if the diesel motor fuel is delivered into the fuel7supply tanks of a commercial motor vehicle licensed under the8motor carrier fuel tax act, 1980 PA 119, MCL 207.211 to 207.234.9 (1)(2)The tax on diesel motor fuel sold and delivered in 10 this state by the retailer into the fuel supply tanks of motor 11 vehicles shall be collected by the supplier and paid over monthly 12 to the department.except that the retail dealer shall pay over13monthly to the department 6 cents of the tax imposed under14section 2 for each gallon sold for delivery into or supplied into15the fuel supply tanks of a motor vehicle that is not a commercial16motor vehicle licensed under the motor carrier fuel tax act, 198017PA 119, MCL 207.211 to 207.234, and eligible for discount allowed18under subsection (1).Each diesel motor fuel retailer shall 19 invoice sales of diesel motor fuel as prescribed by the 20 department. Persons operating passenger vehicles of a capacity 21 of 10 or more under a certificate of public convenience and 22 necessity issued by the Michigan public service commission, or 23 under a municipal franchise, license, permit, agreement, or 24 grant, respectively, and operating over regularly traveled routes 25 expressly provided for in the certificate of convenience and 26 necessity, or municipal license, permit, agreement, or grant, 27 shall be entitled to a refund of the tax paid in the manner 06176'00 7 1 provided in section 12. Refunds provided for under this section 2 to a state certificated operator of an intercity motor bus, shall 3 apply only to those gallons of diesel motor fuel producing mile- 4 age traveled by each intercity motor bus over regular routes or 5 on charter trips or portions of charter trips within this state. 6 The tax shall apply to diesel motor fuel delivered in this state 7 into the storage of a user or acquired by a user in any manner. 8 (2)(3)An end use purchaser who has paid the tax on 9 diesel motor fuel may claim a refund of the tax paid on diesel 10 motor fuel used by the purchaser while operating a motor vehicle 11 at a plant or jobsite while not on the public roads and highways 12 of this state. The department may determine the formulae, meth- 13 odology, and documentation necessary to implement this 14 subsection. 15 (3)(4)A tax is not imposed or collected under this act 16 on diesel motor fuel used in motor vehicles owned by or leased 17 and operated by a political subdivision of this state, or motor 18 vehicles owned and operated by this state or the federal 19 government. 20 (4)(5)A tax is not imposed or collected under this act 21 on diesel motor fuel purchased for use in school buses owned by 22 or leased and operated by nonprofit private, parochial, or denom- 23 inational schools, colleges, and universities and used in the 24 transportation of students to and from school, or to and from 25 school functions authorized by the administration of the eligible 26 institution. 06176'00 8 1 (5)(6)A tax is not imposed or collected under this act 2 by a supplier of diesel motor fuel if the fuel is purchased by an 3 end user for any of the following purposes or for resale to an 4 end user for any of the following purposes: 5 (a) For off-highway use. 6 (b) For use as a home heating oil. 7 (c) For export in compliance with section 3. 8 (d) For use as other than motor fuel. 9 (e) For use in trains. 10 Sec. 34. All sums of money received and collected under 11 this chapter, except the license fees provided for in this act 12 and after the payment of necessary expenses incurred in the 13 enforcement of this act, are appropriated to and shall be depos- 14 ited in the state treasury to the credit of the Michigan trans- 15 portation fund, EXCEPT $8,000,000.00 SHALL BE CREDITED TO THE 16 STATE TRUNK LINE FUND FOR STATE TRUNK LINE PROJECTS. 06176'00 Final page. TJS