House of
Representatives
SB 1445
use fuel taxes; civil penalties
Sponsors: Senator Verschoor, Representative Biggs
SB 1445 imposes a civil penalty on persons who purchase diesel fuel for a commercial motor vehicle but pay the lesser tax imposed on diesel fuel for light class motor vehicles. In addition, SB 1445 prohibits denial of a refund to a fuel vendor for diesel fuel tax paid by the vendor at the commercial rate but sold and taxed at the light class rate.
History
A "vendor" includes a person who sells use fuel in Arizona, and who places the fuel or causes the fuel to be placed into any receptacle on a motor vehicle for use in propelling the vehicle, including a service station dealer, a broker, and a user who sells use fuel to others. Suppliers in Arizona collect fuel taxes at the “rack” where the fuel “breaks bulk.” This tax is added on to the cost of the fuel and passed on down the supply chain to the consumer and paid at the pump by the consumer. Consumers at the pump bear the legal “incidence” of the tax. Thus, tax on diesel fuel is passed down through the distribution channels and paid at the pump.
Arizona charges three different tax rates for use fuel:
- If the use fuel is used in the propulsion of a use class motor vehicle such as a truck tractor, truck or passenger carrying vehicle having a declared gross vehicle weight of more than twenty-six thousand pounds or having more than two axles on a highway in this state, the tax rate is $.26 for each gallon.
- If the use fuel is used in the propulsion of a light class motor vehicle (such as a pickup truck), or an exempt vehicle (certain school buses, government and non-profit vehicles on a highway in this state, the tax rate is $.18 per gallon).
- If the use fuel is used in the propulsion of a use class motor vehicle hauling forest products, the tax rate is $.13 for each gallon (expires January 1, 2011).
Vendors who pay the use fuel tax rate on use fuel that is actually used in a light class or exempt motor vehicle may apply to the department for a refund of the difference between the amount of tax paid for the use class motor vehicle the amount of tax due for a light class motor vehicle on the same number of gallons purchased. Persons who transport forest products on a highway in this are eligible to apply to the department for a refund of the difference between the amount of the use fuel tax paid and the use fuel tax rate prescribed for a motor vehicle transporting forest products.
Provisions
- Imposes a civil penalty on a person who purchases use fuel at the light class motor vehicle tax rate, but burns the fuel in a use class motor vehicle.
- Sets the civil penalty at one thousand dollars, or ten dollars for each gallon of fuel dispensed, whichever is greater.
- Multiplies the civil penalty for second and subsequent violations by the number of prior violations.
- States that in addition to the civil penalty, the person must also pay the difference in the amount of tax due between the light class motor vehicle tax rate and the use class motor vehicle tax rate.
- Prohibits ADOT from denying a refund to a vendor for the difference in use fuel taxes in the circumstance of a use class vehicle paying the light class vehicle tax rate.
- Prohibits ADOT from imposing any penalty on a vendor for use class fuel purchased at the light class vehicle tax rate if the purchase was discovered through an ADOT inquiry or audit.
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Forty-seventh Legislature
Second Regular Session 2 March 30, 2006
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