Identifying and Quantifying Rates of State Motor Fuel Tax Evasion (2008) / Chapter Skim
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Pages 105-145
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From page 105... ...
105 A P P E N D I X C This appendix contains edited and paraphrased summaries of many of the interview responses related to topics in this report. The responses generally are grouped according to the question in the interview protocol, but the nature of the interview process means that useful comments came from a variety of points in the interviews.
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From page 106... ...
106 Distributors can sell to other bonded licensed distributors without tax, but after the third sale, the tax must be paid. Mississippi and Tennessee rivers mean that large amounts of fuel move through the state.
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107 Arkansas attempted to shift its point of taxation to the terminal around 1997. The first receiver (distributor)
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108 Arkansas has a refund program but it is very limited. Volunteer fire departments are the only ones who can apply for a refund but few do.
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109 information is often required. Each application is reviewed.
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110 In Washington, fuel invoices are sent in with refund requests and the reports include equipment lists (including non exempt equipment) and identify exempt uses.
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111 The ATA finds that filing for refunds is a large concern for trucking companies at the state level. There is an occasional complaint that the IRS can be slow to make a refund, but it does not seem to be a big issue.
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112 Texas is not totally uniform with bordering states, and agreements are in place to allow them to share information. If fuel is purchased in a border state and destined for import to Texas, agreements are in place to require the border state to collect the tax and transmit it to Texas.
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113 Utah also views Wyoming as being such a low-tax state that import/export schemes are a significant issue, with fuel purchased in either Utah or Wyoming. There are five refineries in Utah, and they are not a significant importing state.
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114 Florida also borders Georgia. They have a problem with bootlegging from Georgia, where the Georgia tax is paid, and the fuel then goes to Florida.
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115 can fill 60 tanker trucks)
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116 Inter-Governmental and Intra-Governmental Cooperation In general, the interviewees indicated that there is substantial room for improvement in both sharing information across jurisdictions and within states. FTA sees information sharing as a significant problem for most states.
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117 Washington, licensing and collection are all done within the bureau of licensing. It is a joint operation and co-located, so they report no problems with information transfer.
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118 Nebraska has three tribes and has agreements in place with two of them for three years. Agreements are reported to work well, and the other tribe is very remote and sells little fuel.
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119 24.5 cents, but the differences are not seen as a problem. All reports seem to indicate that this arrangement is working well.
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120 North Dakota noted one situation where an individual was using IFTA to evade fuel taxes. The person claimed that the fuel tax was paid through IFTA when pulling from their own supply.
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121 C.3. Responses Related to Fuel Tracking Systems, Licensing, and Forms Some states have electronic tracking systems and they generally find them effective.
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122 North Dakota is in the process of creating an electronic data interchange (EDI) /Excel system, with the Excel spreadsheet downloaded onto EDI.
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123 Canada does not have a tracking system. They had considered setting up an agreement with the U.S.
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124 fear into evaders. DOL can pierce the corporate shield and go after personal assets if evading is occurring, and the officer who is listed on the application is held liable.
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125 Minnesota has forms which are filed electronically, everything as of July 1st. The try to tie into uniformity as much as possible but they use a limited number of product codes.
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126 licensed but it is not required. The tax from an out of state supplier can be collected by the supplier or paid by the customer.
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127 they have. They would like to expand with additional information on products that can be blended.
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128 with contractors and rental equipment. Many users are coming in from other states where they get away with dyed diesel violations.
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129 Oregon has conducted no significant public outreach programs, except in terms of information provided to operators of diesel vehicles. South Dakota provides some education, but most of the information is on the sales and use taxes rather than the motor fuel tax.
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130 The ATA believes that on the whole, states do a fairly good job of informing truckers, even with small fleets, through IFTA mostly. The smallest operators are hard to contact on anything, but operators with ten vehicles or more are generally well informed.
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131 North Carolina requires receipts, disbursements and reporting schedules. Taxing at the rack reduced the number of taxpayers from 1,400 to 50.
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132 C.6. Responses Related to Audits A number of states admit to little auditing effort with respect to motor fuel taxes.
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133 occurs that cannot be resolved, an assessment is sent out to the company. The company must justify the discrepancy.
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134 Texas has no income tax, so the focus is on sales tax audits. There is no sales tax on fuels but there is on blend stocks.
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135 Chevron views audits as an integral part of the business process. Depending on the base price of fuel, taxes can be 25 percent of the sales price.
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From page 136... ...
136 with no one willing to admit where it comes from. They do not have a great deal of interaction with the IRS except for 637H data on jet fuel without any tax on it.
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137 FTA believes joint audits are a good idea in concept; but when the IRS is involved, states do most of the work and the IRS does not share with the states. IRS must have a change of frame of mind with joint audits.
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138 they had. There are many errors, such as a wrong federal identification number.
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139 FTA believes the biggest problem is information. Agents must have audit information and other compliance data.
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140 In Idaho, the Attorney General's office prosecutes the evasion cases and the staff has an understanding of the issues. Montana, Nebraska, South Dakota, Utah, and Wisconsin expressed various degrees of concern about whether prosecutors had the knowledge and / or willingness to pursue motor fuel evasion cases.
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141 fuel inspectors was lost. Since then they have to rely on the Highway Patrol, weights and measures and the IRS.
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142 or at weigh stations. Word of mouth regarding inspections is awesome.
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143 Arkansas cannot put a dollar estimate on dyed fuel abuse but there is a lot of farming. Mostly they find pickup trucks but not large trucks.
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144 and inspected 24 stations that sold dyed fuel, and all 24 failed the test. North Carolina has concrete data and is documenting what they are doing.
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From page 145... ...
145 Nebraska has put a big effort in tracking and cross matching. Error listings were huge with paper.
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