SB 219

This bill would require the Department of Revenue to develop and make available a single point of filing and payment system for county and municipal motor fuel taxes. This bill would also require the standardization of county and municipal motor fuel taxes. The bill would also establish a Local Motor Fuel Tax Advisory Committee to advise the Department of Revenue on procedures and the operation of the system

Relating to motor fuel taxes; to require the Department of Revenue to develop and make available a system which allows any taxpayer required to file and remit a county or municipal motor fuel tax to file and remit the motor fuel tax returns and payments through an electronic single point of filing and payment system; to provide for the use of the local electronic single point of filing and payment system by a taxpayer or local taxing jurisdiction at no charge; to provide for standardization among all county and municipal motor fuel tax levies regarding point of collection, measure of taxation, due dates, penalties, and exemptions, but not the rate of tax; to allow the Department of Revenue to adopt rules to implement this act; and to create a Local Motor Fuel Tax Advisory Committee to provide advice to the Commissioner of Revenue and to provide for its members, powers, and duties.

Section 1

For the purposes of this act, the following words have the following meanings: (1) DEPARTMENT. The Department of Revenue. (2) DIESEL FUEL. Any liquid that is advertised, offered for sale, or sold for use as or used as a motor fuel in a diesel-powered engine. Diesel fuel includes #1 and #2 fuel oils, kerosene, special fuels, and blended fuels which contain diesel fuel, but does not include gasoline or aviation fuel. (3) DISTRIBUTOR. Any person who engages in the selling of motor fuel in this state by wholesale domestic trade. (4) DYED DIESEL FUEL. Diesel fuel that meets the dyeing and marking requirements of Section 4082, Title 26 of the United States Code. (5) GASOLINE. Any product commonly or commercially known as gasoline, or any substitute therefor, regardless of classification, that is advertised, offered for sale, or sold for use as or used as fuel in an internal combustion engine, including gasohol and blended fuel which contains gasoline. Gasoline does not include aviation gasoline sold for use in an aircraft motor. (6) IMPORTER. A person who imports motor fuel into a county or municipality. (7) KEROSENE. All grades of kerosene, including, but not limited to, the two grades of kerosene, No. 1-K and No. 2-K, commonly known as K-1 kerosene and K-2 kerosene, respectively, described in the American Society for Testing Materials Standard D-3699, in effect on January 1, 1999, and kerosene-type jet fuel described in the American Society for Testing Materials Standard D-1655 and military specifications MIL-t-5624r and MIL-t-83133d (grades jp-5 and jp8), and any grade described as kerosene or kerosene-type jet fuel by the Internal Revenue Code and administrative guidance adopted thereunder. (8) MOTOR FUEL. Gasoline and diesel fuel, but does not include aviation fuel. (9) PERSON. Any individual, firm, cooperative, association, corporation, limited liability corporation, trust, business trust, syndicate, partnership, limited liability partnership, joint venture, receiver, trustee in bankruptcy, club, society, or other group or combination acting as a unit. (10) REFINERY. A facility, other than a natural gas processing or fractionation plant, used to produce taxable motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which taxable motor fuel may be removed by pipeline, by vessel, or at a rack. (11) RETAIL DEALER. A person other than a wholesale distributor that engages in the business of selling or distributing motor fuel to the end user within this state. (12) SPECIAL FUEL. Any liquid, other than gasoline, used or suitable for use as motor fuel in a diesel-powered engine or motor to propel any form of vehicle, machine, or mechanical contrivance, and includes products commonly known as biodiesel fuel. Special fuel does not include any petroleum product or chemical compound such as alcohol, industrial solvent, or lubricant, unless blended in or sold for use as motor fuel in a diesel powered engine. (13) TAX. Any amount of tax on motor fuel, including applicable penalty and interest, levied or assessed against a taxpayer and which the department or any county, municipality, or their designees are required or authorized to administer under the laws of this state. (14) TAXPAYER. Any person subject to or liable for any local tax; any person required to file a return with respect to, or to pay, or withhold and remit any local tax or to report any information or value to the department, a county, municipality, or its designee; or any person required to obtain or holding any interest in any license, permit, or certificate of title issued by the department, a county, municipality, or its designee, or any person that may be affected by any act or refusal to act by the department, a county, municipality, or its designee, or to keep any records required by this chapter.

Section 2

(a) Not later than November 1 following the effective date of this section, the Department of Revenue shall develop and make available a system which allows any taxpayer required to file and remit a county or municipal motor fuel tax the capability to file and remit motor fuel tax returns and payments through an electronic single point of filing and payment system. The system shall be available for use by any taxpayer for tax periods after September 30 following the effective date of this section. The system shall allow for motor fuel tax return filing and tax remittance only and shall not provide for the administration or enforcement of local motor fuel taxes unless otherwise provided for by law. This subsection applies to any local motor fuel tax whether called a tax, license fee, privilege license tax, or otherwise. (b) There shall be no charge to a local taxing jurisdiction for use of the system by a taxpayer or a local taxing jurisdiction or its designee. (c) The system developed and implemented pursuant to subsection (a) shall allow a taxpayer to file an electronic tax return for each local taxing jurisdiction where the taxpayer is required to file and remit a motor fuel tax. The returns to be filed using the single point filing system shall be filed electronically in a manner as prescribed by the department. All information included in the electronic tax return shall be electronically available to each appropriate local taxing jurisdiction without delay. The department shall consult with the Local Motor Fuel Tax Advisory Committee established in Section 6 regarding development and implementation of the system. (d) Every local taxing jurisdiction levying or administering a motor fuel tax shall submit to the department a list of the motor fuel taxes levied or administered by that local taxing jurisdiction including current rates by January ollowing the effective date of this section. Every local taxing jurisdiction shall submit to the department written notification of any new or amended motor fuel tax at least 90 days prior to the effective date of the tax or amendment. Failure to notify the department of a change to the levy shall suspend the change to the tax, and the department shall not be required to program new motor fuel taxes or tax rates in the system until the notice is provided as required in this section. The department shall then have 90 days from the receipt date of the written notification to update the system.

Section 3

(a)(1) All local taxing jurisdictions in the state shall require use of the single point filing and payment system by any taxpayer required to file a local motor fuel tax return or remit the tax payments. Any taxpayer using the system for filing an electronic tax return for a local taxing jurisdiction shall be required to simultaneously remit payment through the system or through another electronic method of payment accepted by the local taxing jurisdiction or its designee for which payment is being made. The taxpayer shall be required to report all motor fuel sold or delivered by store location which shall include the name of the store, the physical address of the store, the sales tax number for each store, the number of gallons of excise taxable motor fuel by product type sold by the distributor to the store, the local excise tax paid, and any other information required by the department. (2) Effective October 1 following the effective date of this section, each local taxing jurisdiction levying a motor fuel tax shall be prohibited from accepting any local motor fuel tax return not filed through the single point filing system. Any local motor fuel tax return or payment made to a local taxing jurisdiction that does not conform to this act shall be invalid. (b) It is the intent of this act that the tax be collected and paid by the distributor. The distributor shall collect and pay the tax on the basis of the number of gallons of motor fuel distributed. If the tax levied by the locality has been collected and paid by a distributor, that payment shall be sufficient, the intent being that the tax shall be paid once. If the tax has not been collected by the distributor, the retail dealer shall be liable for the tax if motor fuel is dropped at the retail station in the county or municipality. A retail dealer paying the tax as provided in this section shall pay the tax on the basis of gallons of motor fuel purchased. Storage does not include motor fuel located at the retail level. (c) Any person importing motor fuel into the county or municipality shall collect and pay the county or municipality taxes on the basis of gallons of motor fuel dropped within the locality unless the taxes are otherwise collected or assumed by a distributor. (d) If any taxpayer fails to timely file a return or fails to timely pay the tax imposed by the county or municipality, the tax shall be deemed delinquent and there shall be added to the amount of the tax a penalty of 25 percent of the amount of tax due. (e) Any taxpayer requesting a refund from a non-state administered locality for local motor fuel taxes or any penalties imposed by this act shall make the refund directly through the non-state administered locality or its designee. (f) Not later than February 1 following the effective date of this section, each local taxing jurisdiction shall provide the department with necessary information to allow all motor fuel tax payments to be remitted directly to the bank account or other account designated by the local taxing jurisdiction. Each non-state administered local taxing jurisdiction shall set up its accounts to allow dishonored payments to be reversed. All tax payments made through the system for non-state administered local taxing jurisdictions shall be remitted directly from the taxpayer to the designated bank account or other account of the local taxing jurisdiction with the system serving as a conduit only. (g) The local motor fuel tax return and payment submitted through this system shall be due on or before the 20th day of the month next succeeding the month in which the tax accrues.

Section 4

For the tax periods after September 30 following the effective date of this section, the following shall be exempt from any excise tax subject to this act: (1) Motor fuel when used in governmental functions by the federal government or any agency of the federal government, the state or any agency of the state, county governing agencies, municipalities, and boards of education. (2) Dyed diesel fuel as defined in Section 40-17-322, Code of Alabama 1975, except dyed diesel fuel used to operate a highway vehicle by a nonexempt person or entity. (3) The sale of motor fuel in interstate commerce. (4) Aviation fuel as defined in Section 40-17-322, Code of Alabama 1975. (5) A refinery that uses motor fuel in the refining process. (6) A person who holds a federal permit to blend motor fuels under federal law who pays the federal excise tax on motor fuels directly to the federal government when the person uses gasoline in the state in the blending process.

Section 5

(a)(1) Effective October 1 following the effective date of this section, any existing county motor fuel tax levy that is inconsistent with this act regarding point of collection, measure of taxation, due dates, penalties, and exemptions, but not the rate of tax, shall be superseded and the levy shall be collected and reported in accordance with this act. (2) Any new county motor fuel tax levy enacted after October 1 following the effective date of this section shall conform to this act. Any new county motor fuel tax levy that is inconsistent with this act regarding point of collection, measure of taxation, due dates, penalties, and exemptions, but not the rate of tax, shall be superseded and the levy shall be collected and reported in accordance with the terms of this act. (b)(1) Effective October 1 following the effective date of this section, all municipal motor fuel tax levies shall conform to this act regarding point of collection, measure of taxation, due dates, penalties, and exemptions, but not rate of tax. Any municipal motor fuel tax levy which does not conform to this act regarding point of collection, measure of taxation, due dates, penalties, and exemptions, but not rate of tax, shall be invalid. Notice of the municipal motor fuel tax ordinance shall be provided to the department no later than February 1 following the effective date of this section. (2) Any new municipal motor fuel tax levy enacted after October 1 following the effective date of this section shall conform to this act. Notice of the municipal motor fuel tax ordinance shall be provided to the department at least 90 days prior to the effective date of the new municipal motor fuel tax levy. Any municipal motor fuel tax levy that does not conform to this act regarding point of collection, measure of taxation, due dates, penalties, and exemptions, but not rate of tax, shall be invalid. (3) Each local taxing jurisdiction shall notify all licensed distributors of motor fuels within its jurisdiction of its intent to adopt a new or amended motor fuel tax at least 30 days prior to the adoption of the new or amended motor fuel tax. Notification shall be in writing and delivered by United States mail. Failure of the local taxing jurisdiction to notify licensed distributors as required by this subdivision shall nullify the adoption of the new or amended motor fuel tax.

Section 6

(a)(1) To ensure that industry and local taxing jurisdictions have meaningful input into the development and operation of the tax filing, payment, and collection of the system provided in this act, the Local Motor Fuel Tax Advisory Committee is established to review the design and operation of the system and to make recommendations regarding system requirements and functionality to the Commissioner of Revenue. (2) The committee shall consist of the following persons: a. Three representatives of county government appointed by the Association of County Commissions of Alabama. b. Three representatives of municipal government appointed by the Alabama League of Municipalities. c. Three representatives of the retail or distributor community appointed by the Petroleum and Convenience Marketers of Alabama. d. One representative of a county or municipality which levies a motor fuel tax appointed by the Speaker of the House of Representatives who shall be a nonvoting member. e. One representative of the business community appointed by the President Pro Tempore of the Senate who shall be a nonvoting member. f. One representative of the Department of Revenue appointed by the Commissioner of Revenue. (3) The committee members shall receive no compensation or reimbursement of expenses from the state for serving on the committee. (b) The committee shall meet with the commissioner or his or her representative and with other employees of the department as the commissioner deems appropriate. The initial meeting shall be at a time and place to be determined by the commissioner and shall be held not later than September 30 following the effective date of this section. At the initial meeting, the committee shall organize itself, elect a chair of the committee, and determine the timing and frequency of subsequent meetings. (c) The role of the committee shall be limited to providing input and recommendations on the development and functionality of the system related to the filing of motor fuel tax returns and remittance of payments using the system. The committee may not review the department's administration of state taxes, state-administered local taxes, or any other department matter beyond the system.

Section 7

The Commissioner of the Department of Revenue may adopt rules necessary to effectuate the reporting, collection, administration, and enforcement of this act.

Section 8

Section 6 of this act shall become effective July 1, 2018, following its passage and approval by the Governor, or its otherwise becoming law. The remaining sections of this act shall become effective January 1, 2020, following its passage and approval by the Governor or its otherwise becoming law.