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Vermont: Rate increased, other changes made

Recent legislation increases the rate of Vermont diesel fuel tax and makes changes affecting the administration of Vermont gasoline tax and diesel fuel tax.

Diesel Fuel Tax

Rate of tax, exemptions: The rate of Vermont diesel fuel tax is 25(cents) (formerly,16(cents)) per gallon, effective July 1, 2000. Fuel delivered for farm use to a farm bulk fuel storage tank is exempt. Fuel for use in any state, municipal, school district, fire district, or other governmentally owned vehicle is exempt as long as the distributor takes an exemption certificate from the purchaser at the time of sale. The tax and licensing fee exemptions for fuel sold or distributed to dealers who also sell fuel as home heating oil and for distributor sales or deliveries to users certified as exempt by the Vermont Commissioner of Motor Vehicles are repealed.

Users of diesel fuel in Vermont are taxed at the rate of 25(cents) per gallon of fuel used in vehicles weighing 26,001 (formerly,10,000) pounds or more. Formerly, users paid 16 per gallon on fuel used in vehicles weighing 10,000 pounds or less.

"Fuel" means clear diesel fuel that has not been dyed in accordance with the federal Clean Air Act and any blend of undyed diesel and other fuel used or suitable for use for the generation of power to propel motor vehicles. Formerly, it was not specified whether the fuel was dyed or undyed. Each dealer and user must take inventory of the clear, undyed diesel fuel in its possession on June 30, 2000. No later than July 31, 2000, each dealer or user must report the number of gallons on hand as of June 30, 2000, and pay the applicable tax.

Shrinkage allowance: A distributor may use as the measure of Vermont diesel fuel tax the gross quantity of diesel fuel purchased, imported, produced, refined, manufactured, and compounded by the distributor, less 1% for shrinkage, loss by evaporation, or otherwise, instead of the quantity sold, distributed, or used.

Credit for exempt user: A credit is available for Vermont diesel fuel tax paid on fuel purchased from a distributor by an exempt user or by a user who previously paid tax on the purchase.

License fee: Except for trucks with a gross weight of less than 26,001 (formerly, 18,000) pounds the application for issuance of initial and renewed licenses for distributors, dealers, and users of diesel fuel must be accompanied by the $6.50 license fee for each truck listed in the application.

Reporting requirements: For purposes of Vermont diesel fuel tax reports for users of diesel fuel, daily mileage records are required for motor trucks with a gross weight or registered weight exceeding 26,001 (formerly,18,000) pounds, and must be kept for four (formerly, three) years. Language providing that, at the Commissioner's discretion, a user's quarterly reports may instead include fuel bulk deliveries to the user on which tax was not paid to the distributor is deleted. A provision authorizing the Commissioner to grant an extension of time not to exceed 30 days for filing reports when a user operates in more than one state is also repealed.

In addition, exemptions from report filing requirements are repealed for

* users whose sole use of fuel was for the propulsion of a pleasure vehicle;

* users holding a valid license who certified that they had no fuel storage facilities in use, purchased all fuel used from dealers, and paid tax on the fuel to the dealer; and

* users whose estimated diesel fuel tax liability for the year was $100 or less.

Gasoline Tax and Diesel Fuel Tax

Bulk sales, transferee liability: Whenever a transferor required to collect and remit Vermont gasoline tax or diesel fuel tax makes any sale, transfer, lease, or assignment in bulk of any part or the whole of the assets of a business, other than in the ordinary course of the business, the purchaser, transferee, lessee, or assignee must notify the Commissioner in writing of the proposed transfer and of the transfer's price and date at least 10 days before taking possession of the transfer or before payment, if earlier.

The transferor must also report whether the transferor has informed the transferee that the transferor owes any tax, interest, or penalties and whether the transferee has knowledge that such taxes, interest, or penalties are owed.

Personal liability: Any licensee who fails to collect Vermont gasoline tax or diesel fuel tax or to pay it to the Commissioner in the manner required is personally and individually liable for the amount of such tax and any applicable interest and penalty. If the licensee is a corporation or other entity, the personal liability extends to any officer or agent of the corporation or entity who is under a duty to collect the tax and pay it to the Commissioner.

If any licensee required to pay tax neglects or refuses to pay the tax after demand is made by the Commissioner, the amount, together with all penalties and interest and together with any costs that may accrue, is a lien in favor of Vermont upon all property and rights to real and personal property belonging to the licensee.

Enforcement of payment: Whenever any person fails to pay any Vermont gasoline tax, penalty, or interest due, the attorney general must, upon the request of the Commissioner, enforce the payment on behalf of Vermont in any court of Vermont or of any other state or of any province of Canada.

Surety bond: Vermont gasoline tax distributor license applicants must file a surety bond or other satisfactory form of surety with the Commissioner in an amount not exceeding $400,000 (formerly, $100,000). The Commissioner may also require the filing of a surety bond in an amount fixed by the Commissioner, but not to exceed a licensee's total potential liability, when it is deemed necessary to protect the revenues to be obtained. (Ch.154 (H.B.188), Laws 2000, effective July 1, 2000.)