MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Ways and Means

By: Representative Frierson

House Bill 240

AN ACT TO AMEND SECTIONS 27-55-12 AND 27-55-19, MISSISSIPPI CODE OF 1972, TO EXEMPT FROM THE GASOLINE AND MOTOR FUEL EXCISE TAXES, MOTOR FUEL PURCHASED BY GOVERNMENTAL FIRE DEPARTMENTS AND VOLUNTEER FIRE DEPARTMENTS FOR USE IN THEIR FIRE TRUCKS; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 27-55-12, Mississippi Code of 1972, is amended as follows:

27-55-12. (1) Except as otherwise provided in subsection (2) of this section, the United States Government, the State of Mississippi, counties, municipalities, school districts and all other political subdivisions of the state shall be exempt from excise taxes on gasoline, diesel fuel and compressed gas as follows:

(a) From the excise tax rate in excess of Nine Cents (9) per gallon of gasoline and from the excise tax rate in excess of One Cent (1) per gallon of aviation gasoline levied under Section 27-55-11, Mississippi Code of 1972, Five and Four-tenths Cents (5.4) thereof shall be exempt as provided in Section 27-55-19, Mississippi Code of 1972.

(b) From the excise tax rate in excess of Ten Cents (10) per gallon of diesel fuel levied under Section 27-55-313, Mississippi Code of 1972, Four and Three-fourths Cents (4.75) thereof shall be exempt.

(c) From the excise tax rate in excess of One Cent (1) per gallon of diesel fuel and from the excise tax rate in excess of One-half Cent (1/2) per gallon of oil used in aircraft levied under Section 27-57-315, Mississippi Code of 1972, Four and Three-fourths Cents (4.75) thereof shall be exempt.

(d) From the portion of the excise tax rate on compressed gas used as a motor fuel that exceeds the rate of tax in effect on June 30, 1987, Three Cents (3) thereof shall be exempt.

(2) Governmental fire departments and volunteer fire departments shall be exempt from all excise taxes imposed on gasoline, diesel fuel and compressed gas purchased for use as motor fuel in their fire trucks.

SECTION 2. Section 27-55-19, Mississippi Code of 1972, is amended as follows:

27-55-19. There shall not be included in the measure of the tax levied hereunder any gasoline:

(a) Sold or delivered by a bonded distributor of gasoline to a second bonded distributor of gasoline within this state, but nothing in this exclusion shall exempt the second bonded distributor of gasoline from paying the tax, unless the second bonded distributor of gasoline sells or delivers said gasoline to a third bonded distributor of gasoline in which event the third bonded distributor of gasoline shall be liable for the tax.

(b) Sold to the United States Government for use of the Armed Forces only, and delivered in quantities of not less than four thousand (4,000) gallons. Any exemption provided in this paragraph (b) may be deducted without the prior approval of the commission, provided that satisfactory proof of such exemption shall be furnished to the commission. However, such exemption may be disallowed by the commission if the distributor fails to furnish satisfactory proof of such exemption to the commission.

(c) Exported to a destination beyond the borders of this state by a bonded distributor of gasoline when the tax on such gasoline has been paid or on which the tax liability imposed by this article has accrued against such bonded distributor. Any exemption provided in this paragraph (c) may be deducted without the prior approval of the commission, provided that satisfactory proof of such exemption shall be furnished to the commission; however, such exemption may be disallowed by the commission if the distributor fails to furnish satisfactory proof of such exemption to the commission within ninety (90) days from the sale or delivery of the gasoline.

(d) Exported by any person to a destination beyond the borders of this state in quantities of not less than three thousand (3,000) gallons by ship, vessel, barge, railroad tank car, or pipeline, or by tank truck if such tank truck is operated by a common or contract carrier.

(e) Imported by, or sold to, any refiner or processor in this state for the purpose of being refined or further processed.

(f) Sold to any manufacturer for blending or compounding to the end that it becomes a component part of any manufactured product, or where used as a processing agent in the treatment of raw material in manufacturing a product which does not fall within the meaning of the term "gasoline" as defined in this article.

(g) Sold or delivered to be used for test purposes at any regularly established testing laboratory in this state.

Except as provided in paragraphs (b) and (c) above, evidence of exempt transactions provided in this section and subsections thereof, satisfactory to the commission, shall be submitted by the distributor desiring an allowance of said exemptions to the commission with the payment of the excise tax on the gasoline on which the exemption is claimed. If the commission decides that the distributor is entitled to the exemption and allowance claimed, it shall notify said distributor in writing of such allowance. The distributor shall then be allowed to deduct from the payments made in his next monthly report, after said allowance, the amount of tax which he paid on this exempted gasoline which amount shall be arrived at by taking the amount of exempted gasoline minus two percent (2%) allowed for evaporation, shrinkage and other losses on gasoline, and multiplying the remainder by the amount of excise tax per gallon. In cases where the amount of such tax cannot be absorbed on the estimated tax liability of the person making such payments during the next six (6) months, the amount shall be refunded to the taxpayer. Such amount shall be certified to the State Auditor of Public Accounts by the commission. The said Auditor is hereby authorized to make such investigation and audit of the claim as he finds necessary. If he finds that the commission is correct in its determination, the Auditor may issue his warrant to the State Treasurer in favor of the taxpayer for the amount of tax erroneously paid, such refunds to be made from current gasoline, oil or other motor fuel tax collections.

Except as otherwise provided in this section, in order to claim exemptions provided for under this article, the distributor of gasoline must file claims therefor within three (3) years from the date of sale or delivery; otherwise, claims for such exemptions shall be disallowed.

In case gasoline and oil on which the tax has been previously paid are accidentally mixed, the distributor of gasoline or other person owning such mixture may ship the mixture out of the State of Mississippi, or to a Mississippi refinery, and may claim credit for the gasoline and/or oil tax on the gasoline and oil so mixed. The distributor of gasoline or other person may also ship the mixture to a barge or pipeline storage terminal within the State of Mississippi to be brought up to gasoline specifications, or lowered to oil specifications, as the case might be, under the supervision of a representative of the commission. It shall be the duty of the distributor of gasoline or other person to whom the mixed product belongs to notify the commission immediately after knowledge that the mixture has occurred.

In case the distributor of gasoline or other person elects to ship the mixture to a barge or pipeline terminal for storage within this state, the commission shall supervise the unloading of the mixture.

In order to perfect a claim for credit for the tax on the gasoline and oil constituting any such mixture, the distributor of gasoline or other person making the claim shall do so in writing and shall furnish proof satisfactory to the commission that the mixture was either shipped out of this state or to a refinery or other approved place of storage within this state. The commission shall notify the claimant, in writing, whether or not his claim is approved, and, if approved, the claimant may deduct the amount of the claim from his next tax report. No such claim shall be allowed unless filed within three (3) years after the date of such accidental mixture. Bonded distributors of gasoline having no gasoline tax liability with the commission may assign such tax credit to a bonded distributor of gasoline having such tax liability.

No tax liability shall accrue against the operator of a refinery when shipments of gasoline are made from such refinery, either by common carrier or by tank trucks owned and operated by the operator of said refinery, to a tax-exempt account within this state or to another refinery within this state.

Provided, however, that when gasoline is withdrawn from the storage tank of a refiner or processor on which the tax is paid on such gasoline and it or any part thereof cannot be delivered to a purchaser, said refiner or processor may deduct the tax on all or that portion of such gasoline not delivered to a purchaser from its next gasoline distributor's tax report; provided that such refiner or processor submits with such tax report: (1) a written report setting forth the reasons why such delivery could not be made, and (2) proof or evidence satisfactory to the commission that the tax in question had theretofore been paid to the commission, and (3) proof or evidence satisfactory to the commission that the nondelivered gasoline was actually returned to the refinery or processor from which it was taken for the purpose of delivering it to a purchaser; and provided further, that immediately upon ascertainment by the refiner or processor that said gasoline cannot be delivered, he or it shall immediately notify the commission of this fact and before moving his or its truck or other means of transporting said gasoline from the intended point of delivery; and should the commission desire to inspect said truck, or other means of conveyance, such refiner or processor shall arrange for such inspection at the point or at such other point that may be designated by the commission.

The United States Government, the State of Mississippi, counties, municipalities, school districts and all other political subdivisions of the state shall be exempt from Five and Four-tenths Cents (5.4) of the portion of the gasoline excise tax rate which exceeds Nine Cents (9) per gallon. However, governmental fire departments and volunteer fire departments shall be exempt from the gasoline excise tax on gasoline purchased for use as motor fuel in their fire trucks. Any exemption provided in this paragraph may be deducted without the prior approval of the commission.

SECTION 3. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the gasoline and motor fuel tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the gasoline and motor fuel tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 4. This act shall take effect and be in force from and after July 1, 1997.