W. Va. Code R. § 110-15-11

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-15-11 - Imposition of Tax on Gasoline and Special Fuels

11.1. General. - All sales of gasoline or special fuel by distributors or importers, except when to another distributor for resale in this State or when it is a bulk sale qualified under Section 11.5 of these regulations, and all gasoline or special fuel furnished or delivered within this State to consumers or users shall be subject to the consumers sales and service tax and use tax. Sales of gasoline or special fuel by a person who paid the consumers sales and service tax or use tax on his purchases of fuel, shall not thereafter again be subject to such tax. This Section shall be construed so that all gallons of gasoline or special fuel sold and delivered, or delivered, in this State shall be subject to the consumers sales and service tax or the use tax, and tax on such gallonage shall be imposed only once.

11.1.1. On Purchase Out-Of-State. - An excise tax is imposed on the use or consumption in this State of gasoline or special fuel which was purchased outside this State. The rate of this tax is five percent (5%) of the average wholesale price of such gasoline or special fuel, as such wholesale price is defined and determined under Section 11.4 of these regulations, notwithstanding any provision of W. Va. Code '11-15A-1 et seq. to the contrary. The gasoline or special fuel contained in the supply tank of a motor vehicle that is not a motor carrier shall not be subject to this tax; however, the gasoline or special fuel which is in the supply tank or auxiliary tank of construction equipment, mining equipment, track maintenance equipment or other similar equipment, when such equipment is brought into this State, shall be taxed in the same manner as the gasoline or special fuel which is in the supply tank of a motor carrier.

11.1.2. Upon Whom Tax Imposed. - The consumers sales and service tax and use tax imposed on the sale or use of gasoline and special fuel within this State shall be collected on the actual metered gallons delivered at the first point of delivery within this State to a person not excepted from tax under the sale for resale exception set forth in Section 11.1 of these regulations. For periods beginning on or after October 1, 1987, the quantity delivered shall be either the actual metered gallons delivered or the quantity delivered being calculated by converting to 60E Fahrenheit the quantity transferred by means of either temperature compensating meters approved by the West Virginia Department of Labor, Weights and Measures Division, or by mathematical conversion using American Petroleum Institute (API) ASTM-IP Petroleum Measurement Tables for specific gravity and temperature. This measure shall be the same as that required for calculation of the Gasoline and Special Fuel Excise Tax imposed by W. Va. Code ''11-14-1 et seq. and 11-14A-1 et seq. If the metered quantity delivered is not determined by temperature compensating meter, as aforesaid, and the taxpayer does not convert said gallons delivered to temperature adjusted gallons or, after making a mathematical conversion fails to keep and maintain records to support and substantiate the conversion, then the amount of tax due shall be determined by the number of metered gallons of gasoline or special fuel delivered without adjustment for temperature. Use of the conversion method for determining the quantity of gasoline or special fuel delivered necessitates that the conversion adjustment be made on each invoice and must continue to use that method for the entire tax year for the consumers sales and service tax and the use tax.

Example. - What is the volume at 60EF of 10,000 U.S. gallons of oil measured at 34EF when the gravity of the oil is 64.80 API at 60EF?

Enter the table in the column "API Gravity at 60EF," headed 64E API, and note that against an "Observed Temperature of 34EF" the factor is . . . 1.0168

Likewise, from the column headed 65EF API, note that for the observed temperature of 34EF the factor is . . . 1.0170

This represents an increase of 0.0002 in the factor for an increase of 1.0E API. Therefore, by simple proportion and increase in gravity from 64.0 to 64.80E API increases the factor by 0.8 x 0.0002 or . . . 0.0002

Then, one U.S. gallon of oil having a gravity of 64.80E API at 60EF and measured at 34EF occupies at 60EF a volume of 1.0168 + 0.0002 or . . . 1.0170 U.S. Gallons

Therefore, 10,000 U.S. gallons measured at 34EF occupy at 60EF a volume of 10,000 x 1.0170 or . . . 10,170 U.S. Gallons

11.2. Measure of Tax. - The measure of tax on sales of gasoline or special fuel by distributors or importers shall be the average wholesale price as defined and determined in Section 11.3 of these regulations. It is recognized that the consumers sales and service tax and use tax is generally imposed on gross proceeds from sales to ultimate consumers, while the consumers sales and service tax and use tax on gasoline and special fuel is imposed on the average wholesale price of such gasoline and special fuel; as a result, for the purposes of either the consumers sales and service tax or the use tax, the average wholesale price shall not be less than ninety-seven cents per gallon of gasoline or special fuel for all gallons of gasoline and special fuel sold during the reporting period.

11.3. Determination of Average Wholesale Price.

11.3.1. To simplify determining the average wholesale price of all gasoline and special fuel, the Tax Commissioner shall, effective with the period beginning April 1, 1983 and annually on each January first thereafter, determine the average wholesale price of gasoline and special fuel for each annual period. The basis for determining the average wholesale price shall be sales data gathered for the immediately preceding period of July 1 through October 31. The Tax Commissioner shall provide the annual notification of the average wholesale price of gasoline and special fuel at least thirty (30) days in advance of each annual period which commences on the first day of January. Such notification shall be accomplished by filing notice of the average wholesale price in the State Register, and by such other means as the Tax Commissioner deems reasonable.

11.3.2. The "average wholesale price" means the single, statewide average per gallon wholesale price, rounded to the third decimal (thousandth of a cent), exclusive of state and federal excise taxes on each gallon of gasoline or diesel fuel, as determined by the Tax Commissioner from information furnished by distributors of gasoline or special fuel in this State, or such other information regarding wholesale selling prices as the Tax Commissioner may gather, or a combination of such information. The Tax Commissioner shall make his determination of average wholesale price by random sample survey: Provided, That in no event shall the average wholesale price be determined to be less than ninety-seven cents per gallon of gasoline or special fuel.

11.3.3. All actions of the Tax Commissioner in acquiring data necessary to establish and determine the average wholesale price of gasoline and special fuel, in providing notification of his determination prior to the effective date of any change in rate, and in establishing and determining the average wholesale price of gasoline and special fuel, may be made by the Tax Commissioner without compliance with the provisions of W. Va. Code '29A-3-1 et seq.

11.3.4. In any administrative or court proceeding brought to challenge the average wholesale price of gasoline and special fuel as determined by the Tax Commissioner, his determination shall be presumed to be correct and shall not be set aside unless it is clearly erroneous.

11.4. Computation of Tax Due From Motor Carriers. - Every person who operates or causes to be operated a motor carrier in this State shall pay the consumers sales and service tax and use tax on the average wholesale price of all gallons of gasoline or special fuel used in the operation of any such motor carrier within this State, under the following rules:

11.4.1. The total amount of gasoline or special fuel used in the operation of the motor carrier within this State shall be that proportion of the total amount of gasoline and special fuel used in any motor carrier's operations within and without this State (whether loaded or not), that the total number of miles traveled within this State bears to the total number of miles traveled within and without this State. Ton miles are not acceptable for mileage calculations. Separate miles must be computed for any motor carrier operated in tandem or in series. Locomotive unit miles shall be used by railroads for calculations. Air carrier operations may be calculated and determined by the use of an hour meter. If the motor carrier(s) are leased thirty (30) days or more, the lessee must report operations of the motor carrier(s). If the lease is for less than thirty (30) days, the lessor or owner is responsible for reports.

11.4.2. A motor carrier shall first determine the gross amount of tax due under this Section on the average wholesale value, determined under Section 11.3 of these regulations, of all gasoline and special fuel used in the operation of the motor carrier within this State during the preceding quarter, as if all gasoline and special fuel had been purchased outside this State.

11.4.3. Next, the taxpayer shall determine the total tax paid under W. Va. Code '11-15-1 et seq. on all gasoline and special fuel purchased in this State for use in the operation of the motor carrier.

11.4.4. The difference between amounts determined under the foregoing Section 11.4.2 and Section 11.4.3 is the amount of use tax due when Section 11.4.2 is greater than Section 11.4.3, or the amount to be refunded or credited to the motor carrier when Section 11.4.3 is greater than Section 11.4.2, which refund or credit shall be allowed in the same manner and under the same conditions as a refund or credit is allowed for the tax imposed by W. Va. Code '11-14A-1 et seq.

11.5. Exemption for Bulk Sales to Interstate Motor Carriers. Effective April 1, 1989.

11.5.1. In general. - Effective on and after April 1, 1989, there shall be exempt from the tax imposed by W. Va. Code '11-15-1 et seq. all gallons of gasoline or special fuel sold by a distributor to an interstate motor carrier having fuel storage tanks in this State which are used solely for the purpose of fueling motor carriers owned, leased or operated by the motor carrier, when the purchase is delivered at one time in bulk quantities of one thousand gallons or more into such fuel storage tanks and is purchased for the motor carrier's exclusive use in motor vehicles registered with the State Tax Department: Provided, That this exemption shall not relieve the person owning or operating a motor carrier from payment of any taxes imposed by W. Va. Code '11-14A-1 et seq. or W. Va. Code '11-15A-1 et seq. on gasoline or special fuel used or consumed in this state by the motor carrier.

11.5.1.1. For all qualifying sales, whether cash or otherwise, the supplier shall stamp the invoice for each sale with the following statement - "Bulk Sale - Tax Exempt To Interstate Carriers."

11.5.1.2. The supplier shall provide for each qualifying sale a serially numbered invoice showing the name and address of the seller and the purchaser, point of delivery, the date of delivery, the number of gallons delivered, the kind of fuel delivered and the price of the fuel delivered.

11.5.2. Surety Bond; Release of Surety; New Bond. - The Commissioner may in his discretion require an interstate motor carrier having fuel storage tanks in this state to file a continuous surety bond in an amount to be fixed by the Commissioner, except that the amount thereof shall not be less than one thousand dollars ($1,000.00). Upon completion of the filing of such surety bond, an annual notice of renewal only shall be required thereafter. The surety must be authorized to engage in business within this State. This bond shall be conditioned upon the motor carrier's faithful compliance with the provisions of W. Va. Code '11-14A-1 et seq., W. Va. Code '11-15-1 et seq., and W. Va. Code '11-15A-1 et seq. with respect to such gasoline or special fuel, including the filing of the returns and payment of all tax due with respect to such gasoline or special fuel. Such bond shall be approved by the Commissioner as to sufficiency and by the Attorney General as to form, and shall indemnify the State against any loss arising from the failure of the taxpayer for whatever reason to pay any tax imposed by W. Va. Code '11-14A-1 et seq. or W. Va. Code '11-15A-1 et seq. on gasoline or special fuel purchased as provided in this Section 5a which was used or consumed in operation of the motor carrier in this State: Provided, That a noninterest bearing cash deposit may be accepted by the Commissioner in lieu of such bond. The cash deposit shall be in an amount to be fixed by the Tax Commissioner, except the amount thereof may not be less than one thousand dollars.

11.5.3. Revocation or suspension of exemption.

11.5.3.1. The Tax Commissioner may revoke or suspend application of this exemption to a motor carrier if:

11.5.3.1.a. The motor carrier filed a false or fraudulent return for the tax or willfully failed to report information required by the Tax Commissioner, concerning gasoline or special fuel which it used or consumed in this State, on or before the date specified for filing the return or report.

11.5.3.1.b. The motor carrier willfully refused or willfully neglected to file a tax return or willfully failed to report information required by the Tax Commissioner, concerning gasoline or special fuel which it used or consumed in this State, on or before the date specified for filing the return or report.

11.5.3.1.c. The motor carrier willfully refused or willfully neglected to pay any tax, additions to tax, penalties or interest, or any part thereof, with respect to gasoline or special fuel used or consumed in this State when they became due and payable, determined with regard to any authorized extension of time for payment.

11.5.3.2. Before cancelling or suspending this exemption, the Tax Commissioner shall give written notice to the motor carrier of his intent to suspend or cancel this exemption, the reason for the suspension or cancellation, the effective date of the suspension or cancellation, and the date, time and place where the taxpayer may appear at an informal hearing and show cause why this exemption should not be suspended or canceled. This written notice shall be served on the taxpayer in the same manner as a notice of assessment is served under W. Va. Code '11-10-1 et seq., not less than twenty (20) days prior to the date of such informal hearing. The taxpayer may appeal suspension or cancellation of its exemption under this Section in the same manner as a notice of assessment is appealed under W. Va. Code '11-10-1 et seq.: Provided, That the filing of a petition for appeal shall not stay the effective date of the suspension or cancellation. A stay may be granted only after a hearing is held on a motion to stay filed by the motor carrier, upon finding that state revenues will not be jeopardized by the granting of the stay. The Tax Commissioner may, in his discretion and upon such terms as he may specify, agree to stay the effective date of the suspension or cancellation until another date certain.

11.5.3.3. The Tax Commissioner shall promptly give notice to distributors in this State of the name and mailing address of every motor carrier whose exemption under this Section is suspended or cancelled. The effective date of such suspension or cancellation shall be included, and if this exemption is suspended, the date the suspension expires shall also be provided. The affected motor carrier shall promptly give similar written notice to all distributors from whom he purchases gasoline or special fuel exempt from tax as provided in Section 11.5.1 of these regulations.

11.5.3.4. A motor carrier whose exemption under this Section is cancelled may, after the cancellation has been in effect for twelve (12) months, petition the Tax Commissioner for reinstatement of exemption under this Section. The Tax Commissioner may, in his discretion, and upon such terms as he may require, reinstate this exemption, but only if he reasonably believes that the motor carrier will fully and timely comply with W. Va. Code '11-15-1 et seq. and the provisions of W. Va. Code '11-14A-1 et seq. and W. Va. Code '11-15A-1 et seq. Upon reinstatement, the motor carrier shall provide his distributor with a true copy of the Tax Commissioner's order reinstating the exemption.

11.6. Return and Payment of Tax. - The consumers sales and service tax imposed on the sales of gasoline and special fuel and the use tax imposed on the use or consumption in this State of gasoline or special fuel shall be paid by each taxpayer on or before the twenty-fifth (25th) day of January, April, July and October of each year except that for distributors and importers the tax shall be due on the twenty-fifth (25th) day of each month. Payment shall be by check, bank draft, certified check or money order, payable to the Tax Commissioner, and it shall be for the amount of tax due for the preceding quarter or month, whichever is applicable. Every taxpayer shall make and file a properly completed return as the Tax Commissioner may require and with such return, remit such tax as shown thereon, if any.

11.7. Compliance. - To facilitate ease of administration and compliance by taxpayers, the Tax Commissioner requires distributors, importers and other persons liable for the consumers sales and service tax imposed on sales of gasoline or special fuel and on the Gasoline and Special Fuel Excise Tax imposed by W. Va. Code '11-14-1 et seq., or motor carriers liable for the use tax imposed on the use of gasoline or special fuel in the operation of motor carriers within this State and on the tax imposed by W. Va. Code '11-14A-1 et seq. on such gallons of gasoline or special fuel, to file a combined return and make a combined payment of the consumers sales and service tax due and the above-referenced excise tax, or the use tax due and the motor carrier road tax on such fuel. In order to facilitate the use of a combined return and the making of a single payment, the due date for the gasoline and special fuel excise tax and its return and the due date for the motor carrier road tax with its return is changed to the 25th day of January, April, July and October for motor carriers and the twenty-fifth (25th) day of each month for distributors and importers.

11.8. Direct Pay Permits. - A direct pay permit issued under Section 9c of these regulations cannot be used to purchase gasoline and special fuel. See Section 9c.6.3.5 of these regulations.

11.9. Credit Against Use Tax. - A credit will be allowed against a taxpayer's use tax liability for consumers sales and service tax lawfully paid to another state. To show entitlement to this credit, a taxpayer must show that consumers sales and service tax was actually paid to another state and that gallonage on which said consumers sales and service tax was paid was consumed within this State. For fuel subjected to consumers sales and service tax in another state, the First-in, First-out (FIFO) method of accounting shall be employed. In claiming a credit under this Section, a true, certified copy of all invoices shall be required.

11.10. Construction. - The consumers sales and service tax and the use tax imposed on the sale or use of gasoline or special fuel in this State shall not be construed as taxing any gasoline or special fuel which the State is prohibited from taxing under the Constitution of this State or the Constitution or laws of the United States.

W. Va. Code R. § 110-15-11