ARIZONA STATE SENATE
Phoenix, Arizona
fuel taxes; revisions
Combines fuel tax provisions
for motor vehicle fuel and use fuel into one article, as well as makes a number
of technical changes. Establishes
penalties for fuel tax evasion with criminal intent.
Over the years, various
changes have been made to modify the fuel tax statutes. In 1997, major tax legislation amended
various statutes and repealed the motor carrier weight distance tax. As a result of time and the many changes,
inconsistencies have resulted in confusion of the statutes regarding suppliers,
distributors, vendors, motor carriers and consumers.
Following a review of laws
implemented and enforced by the Arizona Department of Transportation (ADOT),
this legislation attempts to make it easier for users to interrupt the statutes
and aid the agency in uniform administration of the fuel taxes in Arizona. S.B. 1271 reorganizes the motor vehicle fuel
tax and use fuel tax provisions into the same article.
Additionally, fuel tax
evasion is a major concern among the states and the federal government. In response to this concern, this bill
establishes new penalties for those who evade taxes with a criminal intent.
There is no anticipated
fiscal impact to the state general fund associated with this legislation.
1. Combines motor vehicle fuel tax and use fuel tax into the same article.
2. Applies use fuel tax enforcement powers and hearing procedures to the chapter regarding motor fuel tax.
3. Modifies procedures to apply for a refund of motor fuel tax and limits applications for refund to one application per person within a six-month period. Currently, this limitation is one application per person within one year.
4. Establishes a class 4 felony for attempts to intimidate, impede or injure the administration of tax provisions with the intent to evade motor fuel taxes.
5. Establishes a class 5 felony for failing to pay any motor fuel tax, misrepresenting tax documents, failing to file a tax return and evading payment of motor fuel tax.
6. Assesses an additional 50 percent of the tax due to be assessed if the deficiency is due to fraud in addition to any other penalties.
7. Prescribes a civil penalty of $500 for a frivolous tax claim filed with the intent to impede tax administration.
8. Increases the penalty for failing to carry proper documentation for transporting motor fuel from $25 to $100 per shipment.
9. Authorizes the operator of a motor vehicle transporting motor fuel to apply for abatement of the $100 per shipment penalty.
10. Specifies penalties for violating sale requirements for dyed diesel that are currently in federal law.
11. Increases the amount of bond required of suppliers to an amount equal to two times ADOT’s estimate of the supplier’s monthly tax from 1 ½ times of that amount. The total amount of the bond increases to at least $5,000 but not more than $1 million. Currently, the amount of the bond is at least $1,000 to at least $100,000.
12. Allows suppliers to request the ADOT Director to return, refund or release a bond and authorizes the ADOT Director to do so based on the suppliers tax payment and reporting compliance for three years and if refunding the bond does not jeopardize state revenues.
13. Allows an aggrieved supplier to request a hearing to appeal the decisions of the ADOT Director regarding refund of the bond.
14. Allows the ADOT Director to require a surety bond if the interstate user fails to file tax reports or remit taxes or if member jurisdictions of the International fuel tax agreement are determined to be in jeopardy.
15. Requires vendors to post signs on use fuel dispensers indicating that the price includes applicable federal and state taxes and the signs must also include any limitations, prohibitions and specifications regarding light class motor vehicles and use class motor vehicles.
16. Requires the purchaser buying fuel from a vendor that dispenses use fuel from a cardlock facility to complete a declaration of status.
17. Prescribes a civil penalty of $100 per day for a violation of posting requirements.
18. Allows ADOT the option to reimburse the officer collecting taxes rather than allowing the officer to deduct fees from the revenues collected.
19. Expands enforcement authority of fuel tax collection to include the Department of Public Safety, the ADOT Director and the Director of the Department of Weights and Measures or the Directors’ appointed agent.
20. Requires an interstate user of use fuel which the tax has not been paid to submit a remittance of the tax that is due. Specifies the formula to calculate the tax due.
21. Requires a distributor to obtain a license and report the number of gallons of fuel sold and specifies those required to be licensed and report.
22. Requires the ADOT Director to issue a license, subject to cancellation, to a distributor to conduct business.
23. Requires persons acting as distributors and persons in possession of motor fuel which fuel taxes have not been accrued or collected to be licensed as a supplier.
24. Requires a person who sells use fuel for delivery directly into a vehicle fuel tank to be licensed as a vendor.
25. Repeals the ADOT Directors ability to revoke a supplier’s license that fails to pay the full amount of the weekly installment of fuel tax.
26. Requires a person that operates as of an interstate user to obtain a license.
27. Authorizes the ADOT Director or an authorized third party to deny a license to an interstate user if the application is filed by a person whose license of another jurisdiction is under revocation.
28. Authorizes the ADOT Director to revoke or suspend the person’s license upon the person’s failure to make a report of the fuel tax due.
29. Prescribes refund procedures for interstate users and persons who are not suppliers, interstate users, restricted distributors or licensed use fuel vendors.
30. Extends the period that an aggrieved person may appeal a motor fuel tax assessment from 15 days to 30 days.
31. Prescribes the statute of limitations regarding record keeping.
32. Specifies the information needed on a receipt for the use fuel sold by a vendor.
33. Allows suppliers or distributors to amend a report filed with ADOT within three years of original report unless due to an audit.
34. Requires ADOT to credit the licensee’s account unless the licensee files a written request for a refund and an amended report results in a reduction in taxes paid.
35. Allows an aggrieved motor carrier to request a hearing to appeal ADOT’s assessment of motor carrier fees.
36. Clarifies cooperative agreement requirements that comply with the Intermodal Surface Transportation Efficiency Act of 1991.
37. Authorizes the ADOT Director to require fuel tax reports to be filed by electronic means.
38. Stipulates that all monies that accompany reports are immediately available to the State on the date of transfer.
39. Requires a supplier required to file a fuel tax report to file reports and preserve records as provided by current statute until the effective of this act.
40. Makes technical and conforming changes.
41. Provides for a general effective date.
Prepared by Senate Staff
February 1, 2001