HB-4685, As Passed House, December 15, 2015HB-4685, As Passed Senate, December 15, 2015
SUBSTITUTE FOR
HOUSE BILL NO. 4685
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.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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 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 through March 31, 2016, 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
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 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.Beginning
April 1, 2016, at the time of purchase or shipment in this state
from a refiner, pipeline terminal operator, or marine terminal
operator, a purchaser or receiver of fuel other than an exporter or
supplier for immediate export, as evidenced by the terminal's
shipping papers or bill of lading, 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 as part of a bulk transfer, shall make the prepayment
required by this section directly to the department. 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 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).
(4)
Beginning April 1, 2013, the The
rates of prepayment
applied
pursuant to subsection (2) subsections
(2) and (3) shall be
determined
every month by the department. Notwithstanding
subsection
(3), the The department shall publish notice of the
rates of prepayment applicable to gasoline and diesel fuel pursuant
to
subsection (2) subsections
(2) and (3) 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) "Alcohol" means fuel grade ethanol or a mixture of fuel
grade ethanol and another product.
(b) (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.
(c) (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.
(d) "Bulk transfer" means a transfer of fuel from, or purchase
for resale by, a refiner, pipeline terminal operator, or marine
terminal operator to or from another refiner, pipeline terminal
operator, or marine terminal operator through pipeline tender or
marine delivery, including pipeline movements of fuel or marine
vessel movements of fuel. Bulk transfer also includes a transaction
involving the transfer by any transportation means to, or purchase
for resale by, a refiner, pipeline terminal operator, or marine
terminal operator of alcohol to be used exclusively for blending
with gasoline. Notwithstanding anything to the contrary in this
definition, fuel transferred to, or purchased for resale by, a
refiner, pipeline terminal operator, or marine terminal operator
must be delivered to, or otherwise remain within, the bulk transfer
terminal system prior to removal across the rack in order to
constitute a bulk transfer.
(e) "Bulk transfer terminal system" means the fuel
distribution system consisting of refineries, pipelines, marine
vessels, and terminals and includes fuel storage tanks and fuel
storage facilities that are part of a refinery, boat terminal
transfer, or terminal owned, operated, or controlled by a refiner,
marine terminal operator, or pipeline terminal operator.
(f) (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, kerosene, 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, dyed kerosene, or an excluded liquid.
(g) (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.
(h) "Dyed kerosene" means kerosene that is dyed in accordance
with internal revenue service rules or pursuant to any other
internal revenue service requirements, including invisible marker
requirements.
(i) (e)
"Excluded liquid" means
that term as defined in 26 CFR
48.4081-1.
(j) "Export" means to purchase or receive fuel in this state
for immediate shipment and subsequent sale outside of this state.
(k) "Exporter" means a person that exports fuel and is
licensed under section 86 of the motor fuel tax act, 2000 PA 403,
MCL 207.1086.
(l) (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.
(m) (g)
"Gasoline" means and
includes gasoline, alcohol,
gasohol, casing head or natural gasoline, benzol, benzine, naphtha,
methanol, transmix, 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, dyed
kerosene, or an excluded liquid.
(n) (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
dyed kerosene or an excluded liquid.
(o) (i)
"Marine terminal
operator" means a person that stores
fuel at a boat terminal transfer.
(p) (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.
(q) (k)
"Purchase", "receipt", or "shipment" does not include
an
exchange of fuel or an exchange transaction between refiners,
pipeline
terminal operators, or marine terminal operators.a two-
party exchange, a bulk transfer, or a receipt of fuel as part of a
bulk transfer.
(r) "Rack" means a mechanism for delivering fuel from a
refiner, a pipeline terminal operator, or a marine terminal
operator into a railroad tank car, a transport truck, a tank wagon,
or the fuel supply tank of a marine vessel.
(s) (l) "Refiner"
means a person that manufactures meets all
of the following requirements:
(i) Manufactures or produces fuel at a refinery by any process
involving substantially more than the blending of fuel.
(ii) Is a taxable fuel registrant that is a refiner for
purposes of 26 CFR 48.4081-1.
(t) "Refinery" means a facility used by a refiner to produce
fuel from crude oil, unfinished oils, natural gas liquids, or other
hydrocarbons and from which fuel may be removed by pipeline or
marine vessel or at a rack.
(u) "Removal" or "removed" means a physical transfer other
than by evaporation, loss, or destruction of fuel from a refiner,
pipeline terminal operator, or marine terminal operator.
(v) "Supplier" means a supplier or permissive supplier
licensed under section 70 or 73 of the motor fuel tax act, 2000 PA
403, MCL 207.1070 and 207.1073.
(w) "Tank wagon" means a straight truck having 1 or more
compartments other than the fuel supply tank designed or used to
carry fuel.
(x) "Terminal" means a fuel storage and distribution facility
that meets all of the following requirements:
(i) Is registered as a qualified terminal by the internal
revenue service.
(ii) Is supplied by pipeline or marine vessel.
(iii) Has a rack from which fuel may be removed.
(y) "Transport truck" means a semitrailer combination rig
designed or used for the purpose of transporting fuel over the
public roads or highways.
(z) "Transmix" means the mixed product that results from the
buffer or interface of 2 different products in a pipeline shipment,
or a mixture of 2 different products within a terminal operated by
a pipeline terminal operator, within a boat terminal transfer
operated by a marine terminal operator, or at a refinery that
results in an off-grade mixture.
(aa) "Two-party exchange" means a transaction, including a
book transfer, in which fuel is transferred from 1 supplier to
another supplier where all of the following occur:
(i) The transaction includes a transfer of fuel from the
person who holds the original inventory position for the fuel in
fuel storage tanks as reflected in the records of the refiner,
pipeline terminal operator, or marine terminal operator.
(ii) The exchange transaction is completed before removal
across the rack by the receiving supplier.
(iii) The refiner, pipeline terminal operator, or marine
terminal operator in its books and records treats the receiving
exchange party as the supplier that removes the fuel across a rack
for purposes of reporting the transaction to the department under
the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170.
Enacting section 1. This amendatory act takes effect April 1,
2016.