Introduced Version
HOUSE BILL No. 1247
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-2.5; IC 6-6-1.1; IC 8-14-2.
Synopsis: Taxes on motor fuel; mass transit funding. Provides that
sales of gasoline are exempt from sales tax. Provides for an increase in
the sales tax rate from 6% to 6.4%. Provides for an increase in the
gasoline tax rate from $0.18 per gallon to $0.25 per gallon. Provides
that the additional revenue derived from the increase in the gasoline tax
rate is deposited in the local road and street account. Allows a county,
city, or town to adopt an ordinance to spend 10% of the increased local
road and street account distribution on local or regional mass transit.
Repeals provisions requiring distributors of gasoline to prepay sales tax
when transferring gasoline to a retailer.
Effective: July 1, 2008; August 1, 2008.
Austin, Oxley
January 14, 2008, read first time and referred to Committee on Ways and Means.
Introduced
Second Regular Session 115th General Assembly (2008)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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HOUSE BILL No. 1247
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 6-2.5-2-2; (08)IN1247.1.1. -->
SECTION 1. IC 6-2.5-2-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 2. (a) The state gross
retail tax is measured by the gross retail income received by a retail
merchant in a retail unitary transaction and is imposed at the following
rates:
STATE
GROSS RETAIL INCOME
GROSS
FROM THE
RETAIL
RETAIL UNITARY
TAX
TRANSACTION
$ 0
less than
$ 0.09 $0.08
$ 0.01
at least
$0.09 $0.08 but less than
$ 0.25 $0.23
$ 0.02
at least
$0.25 $0.23 but less than
$ 0.42 $0.39
$ 0.03
at least
$0.42 $0.39 but less than
$ 0.59 $0.55
$ 0.04
at least
$0.59 $0.55 but less than
$ 0.75 $0.70
$ 0.05
at least
$0.75 $0.70 but less than
$ 0.92 $0.86
$ 0.06
at least
$0.92 $0.86 but less than
$ 1.09 $1.02
On a retail unitary transaction in which the gross retail income received
by the retail merchant is one dollar and nine two cents ($1.09) ($1.02)
or more, the state gross retail tax is six and four-tenths percent (6%)
(6.4%) of that gross retail income.
(b) If the tax, computed under subsection (a), results in a fraction of
one-half cent ($0.005) or more, the amount of the tax shall be rounded
to the next additional cent.
SOURCE: IC 6-2.5-5-43; (08)IN1247.1.2. -->
SECTION 2. IC 6-2.5-5-43 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2008]: Sec. 43. Sales of gasoline (as defined in IC 6-6-1.1-103) are
exempt from the state gross retail tax.
SOURCE: IC 6-2.5-7-1; (08)IN1247.1.3. -->
SECTION 3. IC 6-2.5-7-1, AS AMENDED BY P.L.1-2007,
SECTION 52, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]: Sec. 1. (a) The definitions in this section apply
throughout this chapter.
(b) "Kerosene" has the same meaning as the definition contained in
IC 16-44-2-2.
(c) "Gasoline" has the same meaning as the definition contained in
IC 6-6-1.1-103.
(d) "Special fuel" has the same meaning as the definition contained
in IC 6-6-2.5-22.
(e) "E85" has the meaning set forth in IC 6-6-1.1-103.
(f) "Unit" means the unit of measure, such as a gallon or a liter, by
which gasoline or special fuel is sold.
(g) "Metered pump" means a stationary pump which is capable of
metering the amount of gasoline or special fuel dispensed from it and
which is capable of simultaneously calculating and displaying the price
of the gasoline or special fuel dispensed.
(h) "Indiana gasoline tax" means the tax imposed under IC 6-6-1.1.
(i) "Indiana special fuel tax" means the tax imposed under
IC 6-6-2.5.
(j) "Federal gasoline tax" means the excise tax imposed under
Section 4081 of the Internal Revenue Code.
(k) "Federal special fuel tax" means the excise tax imposed under
Section 4041 of the Internal Revenue Code.
(l) "Price per unit before the addition of state and federal taxes"
means an amount which equals the remainder of:
(1) the total price per unit; minus
(2) the state gross retail, Indiana gasoline or special fuel, and
federal gasoline or special fuel taxes which are part of the total
price per unit.
(m) "Total price per unit" means the price per unit at which
gasoline
or special fuel is actually sold, including the state gross retail, Indiana
gasoline or special fuel, and federal gasoline or special fuel taxes which
are part of the sales price.
(n) "Distributor" means a person who is the first purchaser of
gasoline from a refiner, a terminal operator, or supplier, regardless of
the location of the purchase.
(o) "Prepayment rate" means a rate per gallon of gasoline
determined by the department under section 14 of this chapter for use
in calculating prepayment amounts of gross retail tax under section 9
of this chapter.
(p) "Purchase or shipment" means a sale or delivery of gasoline, but
does not include:
(1) an exchange transaction between refiners, terminal operators,
or a refiner and terminal operator; or
(2) a delivery by pipeline, ship, or barge to a refiner or terminal
operator.
(q) (n) "Qualified distributor" means a distributor person who:
(1) is a licensed distributor under IC 6-6-1.1; and
(2) holds held an unrevoked permit issued under section 7 of this
chapter (before its repeal).
(r) "Refiner" means a person who manufactures or produces
gasoline by any process involving substantially more than the blending
of gasoline.
(s) "Terminal operator" means a person that:
(1) stores gasoline in tanks and equipment used in receiving and
storing gasoline from interstate or intrastate pipelines pending
wholesale bulk reshipment; or
(2) stores gasoline at a boat terminal transfer that is a dock or
tank, or equipment contiguous to a dock or tank, including
equipment used in the unloading of gasoline from a ship or barge
and used in transferring the gasoline to a tank pending wholesale
bulk reshipment.
SOURCE: IC 6-2.5-7-3; (08)IN1247.1.4. -->
SECTION 4. IC 6-2.5-7-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 3.
(a) With respect to
the sale of gasoline which is dispensed from a metered pump, a retail
merchant shall collect, for each unit of gasoline sold, state gross retail
tax in an amount equal to the product, rounded to the nearest one-tenth
of one cent ($0.001), of:
(1) the price per unit before the addition of state and federal taxes;
multiplied by
(2) six percent (6%).
The retail merchant shall collect the state gross retail tax prescribed in
this section even if the transaction is exempt from taxation under
IC 6-2.5-5.
(b) With respect to the sale of special fuel or kerosene which is
dispensed from a metered pump, unless the purchaser provides an
exemption certificate in accordance with IC 6-2.5-8-8, a retail merchant
shall collect, for each unit of special fuel or kerosene sold, state gross
retail tax in an amount equal to the product, rounded to the nearest
one-tenth of one cent ($0.001), of:
(1) the price per unit before the addition of state and federal taxes;
multiplied by
(2) six percent (6%).
Unless the exemption certificate is provided, the retail merchant shall
collect the state gross retail tax prescribed in this section even if the
transaction is exempt from taxation under IC 6-2.5-5.
SOURCE: IC 6-2.5-7-5; (08)IN1247.1.5. -->
SECTION 5. IC 6-2.5-7-5, AS AMENDED BY P.L.182-2007,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2008]: Sec. 5. (a) Each retail merchant who dispenses
gasoline or special fuel from a metered pump shall, in the manner
prescribed in IC 6-2.5-6, report to the department the following
information:
(1) The total number of gallons of gasoline sold from a metered
pump during the period covered by the report.
(2) The total amount of money received from the sale of gasoline
described in subdivision (1) during the period covered by the
report.
(3) That portion of the amount described in subdivision (2) which
represents state and federal taxes imposed under this article,
IC 6-6-1.1, or Section 4081 of the Internal Revenue Code.
(4) (1) The total number of gallons of special fuel sold from a
metered pump during the period covered by the report.
(5) (2) The total amount of money received from the sale of
special fuel during the period covered by the report.
(6) (3) That portion of the amount described in subdivision
(5) (2)
that represents state and federal taxes imposed under this article,
IC 6-6-2.5, or Section 4041 of the Internal Revenue Code.
(7) (4) The total number of gallons of E85 sold from a metered
pump during the period covered by the report.
(b) Concurrently with filing the report, the retail merchant shall
remit the state gross retail tax in an amount which equals five and
sixty-six hundredths percent (5.66%) of the gross receipts, including
state gross retail taxes but excluding Indiana and federal gasoline and
special fuel taxes, received by the retail merchant from the sale of the
gasoline and special fuel that is covered by the report and on which the
retail merchant was required to collect state gross retail tax. The retail
merchant shall remit that amount regardless of the amount of state
gross retail tax which he the retail merchant has actually collected
under this chapter. However, the retail merchant is entitled to deduct
and retain the amounts prescribed in subsection (c), IC 6-2.5-6-10, and
IC 6-2.5-6-11.
(c) A retail merchant is entitled to deduct from the amount of state
gross retail tax required to be remitted under subsection (b) the amount
determined under STEP THREE of the following formula:
STEP ONE: For reporting periods ending before July 1, 2008,
determine:
(A) the sum of the prepayment amounts made during the
period covered by the retail merchant's report; minus
(B) the sum of prepayment amounts collected by the retail
merchant, in the retail merchant's capacity as a qualified
distributor, during the period covered by the retail merchant's
report.
For reporting periods ending after June 30, 2008, the result of
this STEP is zero (0).
STEP TWO: Subject to subsection (d), for reporting periods
ending before July 1, 2020, determine the product of:
(A) eighteen cents ($0.18); multiplied by
(B) the number of gallons of E85 sold at retail by the retail
merchant during the period covered by the retail merchant's
report.
For reporting periods ending after June 30, 2020, the result of
this STEP is zero (0).
STEP THREE: Add the amounts determined under STEPS ONE
and TWO.
For purposes of this section, a prepayment of the gross retail tax is
presumed to occur on the date on which it is invoiced.
(d) The total amount of deductions allowed under subsection (c)
STEP TWO may not exceed one million dollars ($1,000,000) for all
retail merchants in all reporting periods. A retail merchant is not
required to apply for an allocation of deductions under subsection (c)
STEP TWO. If the department determines that the sum of:
(1) the deductions that would otherwise be reported under
subsection (c) STEP TWO for a reporting period; plus
(2) the total amount of deductions granted under subsection (c)
STEP TWO in all preceding reporting periods;
will exceed one million dollars ($1,000,000), the department shall
publish in the Indiana Register a notice that the deduction program
under subsection (c) STEP TWO is terminated after the date specified
in the notice and that no additional deductions will be granted for retail
transactions occurring after the date specified in the notice.
SOURCE: IC 6-2.5-7-6; (08)IN1247.1.6. -->
SECTION 6. IC 6-2.5-7-6 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 6. (a) If the deduction
under section 5(c) of this chapter exceeds the amount of gross retail tax
required to be remitted under section 5(b) of this chapter, the retail
merchant is entitled to a credit. The credit shall be used as follows:
(1) First, the credit shall be applied against gross retail and use
tax liability of the retail merchant that is required to be remitted
under IC 6-2.5-6.
(2) Second, any amount remaining shall be applied against the
gasoline tax liability of the retail merchant, as determined under
IC 6-6-1.1, excluding any liability for gasoline delivered to a
taxable marine facility.
A retail merchant may file a claim for a refund instead of taking a
credit or for a refund of any excess tax payment remaining after the
credits allowed by this section. In addition, a retail merchant may file
a claim for a refund under section 12 of this chapter.
(b) A retail merchant that is entitled to a refund under this section
must file a claim for the refund on the form approved by the
department and must include any supporting documentation reasonably
required by the department. If a retail merchant files a completed
refund claim form that includes all supporting documentation, the
excess tax payment that is not refunded within ninety (90) days accrues
interest as provided in IC 6-8.1-9-2.
(c) Before the fifth day of each month, the department shall
determine and notify the treasurer of state of the amount of credits
applied during the preceding month against the gasoline tax under this
section. The treasurer of state shall transfer from the general fund:
(1) to the highway, road, and street fund, twenty-five percent
(25%) of the amount set forth in the department's notice; and
(2) to the motor fuel tax fund of the motor vehicle highway
account, seventy-five percent (75%) of the amount set forth in the
department's notice.
SOURCE: IC 6-6-1.1-201; (08)IN1247.1.7. -->
SECTION 7. IC 6-6-1.1-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 201. A license tax of
eighteen twenty-five cents
($0.18) ($0.25) per gallon is imposed on the
use of all gasoline used in Indiana, except as otherwise provided by this
chapter. The distributor shall initially pay the tax on the billed
gallonage of all gasoline the distributor receives in this state, less any
deductions authorized by this chapter. The distributor shall then add
the per gallon amount of tax to the selling price of each gallon of
gasoline sold in this state and collected from the purchaser so that the
ultimate consumer bears the burden of the tax.
SOURCE: IC 6-6-1.1-801.5; (08)IN1247.1.8. -->
SECTION 8. IC 6-6-1.1-801.5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE AUGUST 1, 2008]: Sec. 801.5. (a) The
administrator shall transfer
one-ninth (1/9) two twenty-fifths (2/25) of
the taxes that are collected under this chapter to the state highway road
construction and improvement fund.
(b) The administrator shall transfer
one-eighteenth (1/18) one
twenty-fifth (1/25) of the taxes that are collected under this chapter to
the state highway fund.
(c) The administrator shall transfer
one-eighteenth (1/18) one
twenty-fifth (1/25) of the taxes that are collected under this chapter to
the auditor of state for distribution to counties, cities, and towns. The
auditor of state shall distribute the amounts transferred under this
subsection to each of the counties, cities, and towns eligible to receive
a distribution from the motor vehicle highway account under IC 8-14-1
and in the same proportion among the counties, cities, and towns as
funds are distributed from the motor vehicle highway account under
IC 8-14-1. Money distributed under this subsection may be used only
for purposes that money distributed from the motor vehicle highway
account may be expended under IC 8-14-1.
(d) The administrator shall transfer seven twenty-fifths (7/25)
of the taxes that are collected under this chapter to the local road
and street account for distribution as provided under IC 8-14-2-4.
(d) (e) After the transfers required by subsections (a) through
(c),
(d), the administrator shall transfer the next twenty-five million dollars
($25,000,000) of the taxes that are collected under this chapter and
received during a period beginning July 1 of a year and ending June 30
of the immediately succeeding year to the auditor of state for
distribution in the following manner:
(1) thirty percent (30%) to each of the counties, cities, and towns
eligible to receive a distribution from the local road and street
account under IC 8-14-2 and in the same proportion among the
counties, cities, and towns as funds are distributed under
IC 8-14-2-4;
(2) thirty percent (30%) to each of the counties, cities, and towns
eligible to receive a distribution from the motor vehicle highway
account under IC 8-14-1 and in the same proportion among the
counties, cities, and towns as funds are distributed from the motor
vehicle highway account under IC 8-14-1; and
(3) forty percent (40%) to the Indiana department of
transportation.
(e) (f) The auditor of state shall hold all amounts of collections
received under subsection (d) (e) from the administrator that are made
during a particular month and shall distribute all of those amounts
pursuant to subsection (d) (e) on the fifth day of the immediately
succeeding month.
(f) (g) All amounts distributed under subsection (d) (e) may only be
used for purposes that money distributed from the motor vehicle
highway account may be expended under IC 8-14-1.
SOURCE: IC 8-14-2-2; (08)IN1247.1.9. -->
SECTION 9. IC 8-14-2-2 IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2008]: Sec. 2. (a) Except as provided in
subsection (b), it is hereby declared to be the intent of the general
assembly that the monies deposited in the primary highway system
special account and the local road and street account shall be used
exclusively for engineering, land acquisition, construction, resurfacing,
restoration, and rehabilitation of highway facilities.
(b) Money deposited in the local road and street account may be
used for local or regional mass transit as provided in section 9 of
this chapter.
SOURCE: IC 8-14-2-5; (08)IN1247.1.10. -->
SECTION 10. IC 8-14-2-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2008]: Sec. 5. Money from the
local road and street account shall be used exclusively by the cities,
towns, and counties for:
(1) engineering, land acquisition, construction, resurfacing,
maintenance, restoration, or rehabilitation of both local and
arterial road and street systems;
(2) the payment of principal and interest on bonds sold primarily
to finance road, street, or thoroughfare projects;
(3) any local costs required to undertake a recreational or
reservoir road project under IC 8-23-5; or
(4) the purchase, rental, or repair of highway equipment; or
(5) local or regional mass transit as provided in section 9 of
this chapter.
SOURCE: IC 8-14-2-9; (08)IN1247.1.11. -->
SECTION 11. IC 8-14-2-9 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2008]:
Sec. 9. (a) Subject to subsection (b), the fiscal body of a
county, city, or town may adopt an ordinance to appropriate a part
of the county's, city's, or town's distribution under section 4 of this
chapter for local or regional mass transit.
(b) For any calendar year, the amount that a county, city, or
town expends on local or regional mass transit under subsection (a)
may not exceed the amount determined in STEP THREE of the
following formula:
STEP ONE: Determine the amount deposited during the
calendar year in the local road and street account under
IC 6-6-1.1-801.5(d).
STEP TWO: Determine the part of the STEP ONE result
distributed to the county, city, or town under section 4 of this
chapter.
STEP THREE: Multiply:
(A) the STEP TWO result; by
(B) ten percent (10%).
SOURCE: IC 6-2.5-7-7; IC 6-2.5-7-8; IC 6-2.5-7-9; IC 6-2.5-7-10;
IC 6-2.5-7-11; IC 6-2.5-7-12; IC 6-2.5-7-13; IC 6-2.5-7-14; IC 6-2.5-
7-15.
; (08)IN1247.1.12. -->
SECTION 12. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2008]: IC 6-2.5-7-7; IC 6-2.5-7-8; IC 6-2.5-7-9; IC 6-2.5-7-10;
IC 6-2.5-7-11; IC 6-2.5-7-12; IC 6-2.5-7-13; IC 6-2.5-7-14;
IC 6-2.5-7-15.
SOURCE: ; (08)IN1247.1.13. -->
SECTION 13. [EFFECTIVE JULY 1, 2008]
(a) The definitions in
IC 6-2.5-7-1, before its amendment by this act, apply throughout
this SECTION.
(b) A distributor that:
(1) prepaid the state gross retail tax under this chapter before
July 1, 2008;
(2) is a retail merchant; and
(3) sells gasoline that is exempt from the state gross retail tax:
(A) as evidenced by a purchaser's exemption certificate
issued by the department of state revenue for a sale
occurring before July 1, 2008; or
(B) by operation of law for a sale occurring after June 30,
2008;
may not require the exempt purchaser to pay the gross retail taxes
prepaid in the gasoline sold to the exempt purchaser. A distributor
that has prepaid state gross retail taxes and has not been
reimbursed because the gasoline is sold to an exempt purchaser
may file a claim for a refund. A claim for a refund must be on the
form approved by the department of state revenue and include all
supporting documentation reasonably required by the department
of state revenue. If a distributor files a completed refund claim
form that includes all supporting documentation, the department
of state revenue shall authorize the auditor of state to issue a
warrant for the refund.
(c) This SECTION expires July 1, 2009.