Alaska State Legislature
News from the House Majority

Jerry Ritter, House Majority Press Secretary
State Capitol
Juneau, AK 99801
Phone: (907) 465-3804
http://www.akrepublicans.org
Actuality Line: 1-800-478-6540

House Passes Measure Limiting Fuel Dealers' Tax Liability

Wholesalers Can Get Tax Credits For Sales That Become Worthless

For Immediate Release: March 24, 1998 Contact: Rep. Gary Davis at (907) 465-4457.

Juneau -- The Alaska House has moved to help wholesalers who sell bulk motor fuel to buyers who then declare bankruptcy. Under House Bill 239, which passed the House Tuesday, wholesalers will be able to get tax credits to cover the costs of tax bills which they have already paid.

"The current situation places dealers in a potentially unfair position," said Representative Gary Davis (R-Soldotna), sponsor of HB 239. "In theory, consumers are supposed to pay the state's 8-cent-a-gallon motor fuel tax, but, in reality, since so much of the business is conducted using credit, the wholesaler pays the tax up front and is later reimbursed when the buyer makes good on his or her payment.

"The problem comes when a buyer, for bankruptcy or similar reasons, can't pay for the fuel," Davis said. "When that happens, the wholesaler is stuck with having paid a tax he or she was never required to pay. That's just not fair," Davis said.

HB 239 would enable dealers to receive tax credits equal to the amount of tax they've paid. The credits would be applied against subsequent tax liabilities only and could only be taken for sales with a tax liability in excess of $500. The measure also requires that the tax be repaid if the wholesaler is paid at a later date.

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