While in
the process of considering a hike in taxes assessed on diesel
fuel, Michigan lawmakers had a revelation: If they were to simplify
what they recognize as the most complicated fuel tax collection
system in the nation, they would collect more taxes without
increasing the tax rate.
The House
Committee on Transportation is considering an amended package
of three bills that would simplify the way truckers pay taxes
on diesel fuel. The new system would collect the entire tax
on diesel at the pump.State officials believe the simpler fuel
tax collection system might net their state a windfall of $10
million through greater compliance and the elimination of tax
evasion.
"The
state, the taxpayer and everyone else is a winner with tax simplification,"
says Todd Spencer, executive vice president of OOIDA. "Likewise,
having all taxes assessed reflected in the pump price of fuel
is the simplest, the most honest, and most efficient way to
assess and collect these fees."
Currently
truckers pay a fuel tax and a sales tax at the pump, then file
a quarterly tax return to pay additional fuel taxes, then file
another quarterly tax return to apply for a sales tax rebate.
You're paying the same amount but with three steps.
Under the
proposed system, truckers pay the entire tax at the pump. Intrastate
truckers in Michigan would not be required to or need to file
a quarterly return. Interstate truckers would still file quarterly
and could receive credit for over-purchases.
The bills'
opponents - Michigan truckstops and the Michigan Petroleum Association
- say truckers won't buy their fuel in Michigan if the entire
tax is listed on the pump price, making the price of diesel
seem higher.
"They
are just squawking because the current system gives the illusion
that fuel prices in Michigan are lower than they actually are,"
said Spencer. "In reality, excluding state taxes, fuel
prices in Michigan are the fourth highest in the nation."
On June
4, the transportation committee approved the first reading of
the amended bill package before leaving for a one-week session
break. When they return on June 11, the committee is expected
to vote on the package and send it on for approval by the House
and then the Senate, all before the session ends in mid-June,
though a special session could be called.
To follow
the bill package's status, call (517) 373-0135 and ask for bills
HB5734, 5735 or 5736.
--Rene Tankersley
