2000 ANNUAL REPORT
TAX/LEGAL

Excise Tax Committee Achieves Success on Variety of Issues in WSPA States

The WSPA Excise Tax Committee had a busy and successful year in 2000. The committee worked together in support of WSPA’s public affairs and legislative efforts on a variety of issues in California, Washington and Arizona. The highlights of these efforts are as follows:

California Oil Spill Fee Regulations – The Department of Fish and Game advocated sweeping changes in the regulations which would have resulted in a substantial increase in the application of the fee, fewer credits and a broader application to petroleum products. Working diligently through the administrative meeting and hearing processes these efforts were successfully rebuffed without any increase in costs to the industry.

California Tax at the Rack Expands – Motor vehicle fuel will be taxed at the rack for excise tax purposes beginning January 1, 2002. This move streamlines tax calculation and collection procedures and reduces opportunities for tax evasion and brings California more in line with the federal excise tax and many other state tax schemes. Also, the Board of Equalization staff agreed, after an unsuccessful 11^th hour legislative effort, to move the collection of pre-paid sales tax to the rack as well and is currently finding a sponsor to introduce the bill. These statutory changes will provide relief to both industry and government for many years to come and will ensure that taxes are properly collected and remitted.

Washington Oil Spill Tax – The committee successfully forestalled some poorly worded and burdensome administrative changes which would have increased the burdens on the industry from a cost and compliance standpoint. The committee continues to work with Department of Revenue staff to develop reasonable regulations on this onerous tax.

Washington Motor Fuel Reporting – The committee met in Olympia to address some concerns with the Department of Licensing regarding shortfalls in the current reporting system which generates hundreds of needless notices and assessments annually for WSPA members. Industry suggestions on electronic reporting and uniformity with new IRS electronic reporting requirements were also addressed. The information provided to the IRS by registered parties will be shared with the states, thereby eliminating the need to require separate and additional electronic reports.

Arizona Motor Fuel Statutory Provisions – WSPA Excise Tax Committee representatives met with Department of Transportation staff to discuss proposed legislative changes in a proposed overhaul of the motor fuel tax code. Scores of small, but meaningful changes were made in the draft legislation to eliminate many unintended negative impacts to the industry. Unfortunately the two-tiered diesel fuel retail tax rate continues to raise problematic issues for both the industry and consumers.

In addition to these larger projects, the committee has met numerous times in response to WSPA public affairs requests for information and feedback on a variety of issues and remains committed to a strong team approach with other WSPA committees in representing the interests of the industry.

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