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Tax cut eyed for bulk motor fuel sellers
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Posted on Dec 08 2008
Businesses selling motor fuel in bulk quantities will get a tax cut under a bill now before the House of Representatives.
Rep. Ray N. Yumul has introduced legislation that would legally define bulk motor fuel vendors as wholesalers, thus making them eligible for special gross revenue tax rates.
In general, businesses pay an annual tax of up to 5 percent of their gross revenues. Wholesalers are taxed at a maximum of 2 percent of gross revenues.
If enacted, Yumul’s bill will benefit businesses that sell bulk motor fuel, to include regular and premium unleaded gasoline and diesel, to retail service stations, businesses and manufacturers. There are at least three businesses engaged in the sale of bulk motor fuel in the Commonwealth.
The measure states that these businesses deserve lower tax rates because they provide a service to the general businesses “by selling and delivering at reduced wholesale prices motor fuel products to other businesses, thereby creating additional economic activities to include additional jobs and also [reducing] the importer’s footprint by lessening involvement in competing in this market.”
The bill also argues that most deliveries of bulk motor fuel are to large businesses, hotel, and manufacturers who then use the purchased fuel to power their generators. These businesses, according to the bill, are suffering from high fuel costs and the inability of the Commonwealth Utilities Corp. to accommodate them on the power grid.
The liquid fuel tax, which is paid by the importer at the rate of 15 cents a gallon, is not affected by the proposed legislation.
