Chapter 5736: MOTOR FUEL SUPPLIER TAX

5736.01 Definitions.

As used in this division:

(A) "Calendar quarter" and "person" have the same meanings as in section 5751.01 of the Revised Code.

(B) "Distribution system" means a bulk transfer or terminal system for the distribution of motor fuel consisting of refineries, pipelines, marine vessels, and terminals. For the purposes of this section, motor fuel that is in a refinery, pipeline, terminal, or marine vessel that is transporting motor fuel to a refinery or terminal is in a "distribution system." Motor fuel is "outside of a distribution system" if the fuel is in a fuel storage facility, including, but not limited to, a bulk plant that is not part of a refinery or terminal, the fuel supply tank of an engine or motor vehicle, a marine vessel transporting motor fuel to a fuel storage facility that is not in a distribution system, or a tank car, rail car, trailer, truck, or other equipment suitable for ground transportation.

(C) "Dyed diesel fuel," "import," "motor fuel," "public highways," and "terminal" have the same meanings as in section 5735.01 of the Revised Code.

(D) "First sale of motor fuel within this state" means the initial sale of motor fuel when sold for delivery to a location in this state.

(E) "Gross receipts" means the total amount received by a person, without deduction for the cost of goods sold or other expenses incurred, from the first sale of motor fuel within this state. For the purposes of division (E) of this section, "amount received" includes amounts accrued under the accrual method of accounting. "Gross receipts" shall not include any of the following amounts:

(1) Receipts derived from the sale of motor fuel when sold for export to another state;

(2) An amount equal to the federal and state excise taxes paid by the supplier on the motor fuel;

(3) Bad debts from receipts on the basis of which the tax imposed by this chapter was paid in a prior quarterly tax payment period. For the purpose of this division, "bad debts" has the same meaning as in section 5751.01 of the Revised Code.

(4) Any amount realized from the sale of an account receivable to the extent the receipts from the underlying transaction giving rise to the account receivable were included in the gross receipts of the taxpayer.

(F) "Motor fuel used to propel vehicles on public highways and waterways" includes motor fuel used for the operation of licensed motor vehicles employed in the maintenance, construction, or repair of public highways. "Motor fuel used to propel vehicles on public highways and waterways" does not include dyed diesel fuel.

(G) "Rack" means a mechanism capable of delivering motor fuel from a refinery, terminal, or marine vessel into a railroad tank car, transport truck, tank wagon, fuel supply tank, marine vessel, or other means of transport outside of a distribution system.

(H) "Refinery" means a facility used to produce motor fuel and from which motor fuel may be removed by pipeline, by vessel, or at a rack.

(I) "Supplier" means either of the following:

(1) A person that sells, exchanges, transfers, or otherwise distributes motor fuel from a terminal or refinery rack to a point outside of a distribution system, if the person distributes such motor fuel at a location in this state;

(2) A person that imports or causes the importation of motor fuel for sale, exchange, transfer, or other distribution by the person to a point outside of a distribution system in this state.

(J) "Tax period" means the calendar quarter on the basis of which a taxpayer is required to pay the tax imposed under this chapter.

(K) "Taxpayer" means a person subject to the tax imposed by this chapter.

(L) "Waterways" means all streams, lakes, ponds, marshes, water courses, and all other bodies of surface water, natural or artificial, which are situated wholly or partially within this state or within its jurisdiction, except private impounded bodies of water.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.02 Motor fuel supplier tax; distribution of revenue.

(A) Beginning with the tax period that commences July 1, 2014, and continuing for every tax period thereafter, there is hereby levied an excise tax on each supplier measured by the supplier's gross receipts derived from the first sale of motor fuel within this state. The tax shall be levied at a rate of six and five-tenths mills for each dollar of the supplier's gross receipts.

All revenue from the tax shall be distributed as follows:

(1) All revenue from the tax as measured by gross receipts derived from the sale of motor fuel used for propelling vehicles on public highways and waterways shall be used for the purposes of maintaining the state highway system, funding the enforcement of traffic laws, and covering the costs of hospitalization of indigent persons injured in motor vehicle accidents on the public highways.

(2) All revenue not distributed as required by division (A)(1) of this section shall be used for the purpose of funding the needs of this state and its local governments.

(B) The tax imposed by this section is in addition to any other taxes or fees imposed under the Revised Code.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.03 Avoidance of tax by receipt of fuel outside of state.

(A) No person shall avoid the tax imposed by this chapter by receiving motor fuel outside of this state and transferring the motor fuel into this state within one year. Any such person shall be considered to have received the fuel in this state and shall include as gross receipts the value of motor fuel the person transfers into this state within one year after the person receives the property outside of this state.

(B) The tax commissioner may adopt rules necessary to administer this section.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.04 Tax return; remittance.

(A) Not later than the tenth day of the second month after the end of each calendar quarter, every taxpayer shall file with the tax commissioner a tax return in such form as the commissioner prescribes. The return shall include, but is not limited to, the amount of the taxpayer's gross receipts for the calendar quarter and shall indicate the amount of tax due under section 5736.02 of the Revised Code for the calendar quarter. The taxpayer shall indicate on each return the portion of the taxpayer's gross receipts attributable to motor fuel used for propelling vehicles on public highways and waterways and the portion of such receipts attributable to motor fuel used for other purposes.

(B)

(1) The taxpayer shall remit the tax shown to be due on the return, and, if required by the tax commissioner, file the return, electronically. The commissioner may require taxpayers to use the Ohio business gateway as defined in section 718.051 of the Revised Code to file return returns and remit the tax, or may provide another means for taxpayers to file and remit the tax electronically.

(2) A person required by this section to remit taxes or file returns electronically may apply to the commissioner, on the form prescribed by the commissioner, to be excused from that requirement. The commissioner may excuse a person from such requirement for good cause.

(C) The tax rate with respect to gross receipts for a calendar quarter is not fixed until the end of the measurement period for each calendar quarter. The total amount of gross receipts reported for a given calendar quarter shall be subject to the tax rate in effect in that quarter.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.05 Failure to file return.

(A) Any taxpayer that fails to file a return or pay the full amount of the tax due within the period prescribed therefor under this chapter shall pay a penalty in an amount not exceeding the greater of fifty dollars or ten per cent of the tax required to be paid for the tax period.

(B)

(1) If any additional tax is found to be due, the tax commissioner may impose an additional penalty of up to fifteen per cent on the additional tax found to be due.

(2) Any delinquent payments of the tax made after a taxpayer is notified of an audit or a tax discrepancy by the commissioner is subject to the penalty imposed by division (B) of this section. If an assessment is issued under section 5736.09 of the Revised Code in connection with such delinquent payments, the payments shall be credited to the assessment.

(C) If a person required to remit taxes or file a return electronically under section 5736.04 of the Revised Code fails to do so, the commissioner may impose a penalty not to exceed the following:

(1) For either of the first two calendar quarters the person so fails, five per cent of the amount of the payment that was required to be remitted;

(2) For the third and any subsequent calendar quarters the person so fails, ten per cent of the amount of the payment that was required to be remitted.

(D) The tax commissioner may collect any penalty or interest imposed by this section in the same manner as the tax imposed under this chapter. Penalties and interest so collected shall be considered as revenue arising from the tax imposed under this chapter.

(E) The tax commissioner may abate all or a portion of any penalties imposed under this section and may adopt rules governing such abatements.

(F) If any tax due is not timely paid in accordance with this chapter, the taxpayer shall pay interest, calculated at the rate per annum prescribed by section 5703.47 of the Revised Code, from the date the tax payment was due to the date of payment or to the date an assessment was issued, whichever occurs first.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.06 Suppliers license.

(A) No person subject to the tax imposed by section 5736.02 of the Revised Code shall distribute, import, or cause the importation of motor fuel for consumption in this state without holding a supplier's license issued by the tax commissioner to engage in such activities.

(B)

(1) A person subject to the tax imposed by section 5736.02 of the Revised Code shall, on or before March 1, 2014, or within thirty days of first becoming subject to the tax imposed by this chapter, whichever is earlier, apply to the tax commissioner for a supplier's license on the form prescribed by the commissioner.

(2) Each person issued a supplier's license under division (B)(1) of this section shall apply to renew the license on or before the first day of March of each year.

(3) With each license application submitted under division (B)(1) or (2) of this section, the applicant shall pay an application fee equal to one of the following amounts:

(a) If the applicant solely imports or causes the importation of motor fuel for sale, exchange, or transfer by the person in this state, three hundred dollars;

(b) If the applicant engages in activities in addition to those described in division (B)(3)(a) of this section, one thousand dollars.

If an applicant timely submits an application under division (B)(1) of this section on or after the first day of September of any year, the fee that would apply to the applicant under division (B)(3)(a) or (b) of this section shall be reduced by one-half.

(4) The failure to apply to the commissioner for a supplier's license does not relieve a person from the requirement to file returns and pay the tax imposed by this chapter.

(C) The tax commissioner may refuse to issue a license to any applicant under this section in the following circumstances:

(1) The applicant has previously had any license canceled for cause by the commissioner.

(2) The commissioner believes that the application is not filed in good faith or is filed as a subterfuge in an attempt to procure a license for another person.

(3) The applicant has violated any provision of this chapter.

(D) If the tax commissioner refuses to issue a license to an applicant under this section, the applicant is entitled to a refund of the application fee in accordance with section 5736.08 of the Revised Code. All application fees collected under this section shall be deposited into the motor fuel receipts tax administration fund created in section 5736.13 of the Revised Code.

(E) No person shall make a false or fraudulent statement on an application required by this section.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.07 Revocation of license.

(A) If a taxpayer files a false return, fails to file a return as required by section 5736.04 of the Revised Code, or fails to pay the full amount of tax due with a return, the tax commissioner may revoke the supplier's license issued to the taxpayer under section 5736.06 of the Revised Code by notifying the taxpayer in writing of such revocation by certified mail sent to the last known address of the taxpayer appearing on the files of the commissioner.

(B) Upon the request of a person that is no longer subject to the tax imposed by this chapter, the tax commissioner may cancel the supplier's license issued to the person under section 5736.06 of the Revised Code. The cancellation shall become effective at the time determined by the commissioner. No license shall be canceled upon the request of any person unless, prior to the date of cancellation, the person has paid to the state all taxes payable by such person under the laws of the state, together with any interest and penalties.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.08 Application for refund.

(A) An application for refund to the taxpayer of the amount of taxes imposed under this chapter that are overpaid, paid illegally or erroneously, or paid on any illegal or erroneous assessment shall be filed by the taxpayer with the tax commissioner, on the form prescribed by the commissioner, within four years after the date of the illegal or erroneous payment of the tax, or within any additional period allowed under division (F) of section 5736.09 of the Revised Code. The applicant shall provide the amount of the requested refund along with the claimed reasons for, and documentation to support, the issuance of a refund.

(B) On the filing of the refund application, the commissioner shall determine the amount of refund to which the applicant is entitled. If the amount is not less than that claimed, the commissioner shall certify the amount to the director of budget and management and treasurer of state for payment from the tax refund fund created under section 5703.052 of the Revised Code. If the amount is less than that claimed, the commissioner shall proceed in accordance with section 5703.70 of the Revised Code.

(C) Interest on a refund applied for under this section, computed at the rate provided for in section 5703.47 of the Revised Code, shall be allowed from the later of the date the tax was paid or when the tax payment was due.

(D) Except as provided in section 5736.081 of the Revised Code, the commissioner may provide for the crediting against tax due for a tax period the amount of any refund due the taxpayer under this chapter for a preceding tax period.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.081 Application of refund to debts to the state.

As used in this section, "debt to this state" means unpaid taxes due the state, unpaid workers' compensation premiums due under section 4123.35 of the Revised Code, unpaid unemployment compensation contributions due under section 4141.25 of the Revised Code, unpaid unemployment compensation payment in lieu of contribution under section 4141.241 of the Revised Code, unpaid fees payable to the state or to the clerk of courts pursuant to section 4505.06 of the Revised Code, incorrect payments for medicaid services under the medicaid program, or any unpaid charge, penalty, or interest arising from any of the foregoing.

If a taxpayer entitled to a refund under section 5736.08 of the Revised Code owes any debt to this state, the amount refundable may be applied in satisfaction of the debt. If the amount refundable is less than the amount of the debt, it may be applied in partial satisfaction of the debt. If the amount refundable is greater than the amount of the debt, the amount remaining after satisfaction of the debt shall be refunded. This section applies only to debts that have become final. For the purposes of this section, a debt becomes final when, under the applicable law, any time provided for petition for reassessment, request for reconsideration, or other appeal of the legality or validity of the amount giving rise to the debt expires without an appeal having been filed in the manner provided by law.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.09 Assessments for failure to file return.

(A) The tax commissioner may make an assessment, based on any information in the commissioner's possession, against any person that fails to file a return or pay any tax as required by this chapter. The commissioner shall give the person assessed written notice of the assessment as provided in section 5703.37 of the Revised Code. With the notice, the commissioner shall provide instructions on the manner in which to petition for reassessment and request a hearing with respect to the petition.

(B) Unless the person assessed, within sixty days after service of the notice of assessment, files with the commissioner, either personally or by certified mail, a written petition signed by the person or the person's authorized agent having knowledge of the facts, the assessment becomes final, and the amount of the assessment is due and payable from the person assessed to the treasurer of state. The petition shall indicate the objections of the person assessed, but additional objections may be raised in writing if received by the commissioner prior to the date shown on the final determination.

If a petition for reassessment has been properly filed, the commissioner shall proceed under section 5703.60 of the Revised Code.

(C)

(1) After an assessment becomes final, if any portion of the assessment, including accrued interest, remains unpaid, a certified copy of the commissioner's entry making the assessment final may be filed in the office of the clerk of the court of common pleas in the county in which the person resides or has its principal place of business in this state, or in the office of the clerk of court of common pleas of Franklin county.

(2) Immediately upon the filing of the entry, the clerk shall enter judgment for the state against the person assessed in the amount shown on the entry. The judgment may be filed by the clerk in a loose-leaf book entitled, "special judgments for the motor fuel receipts tax" and shall have the same effect as other judgments. Execution shall issue upon the judgment at the request of the commissioner, and all laws applicable to sales on execution shall apply to sales made under the judgment.

(3) If the assessment is not paid in its entirety within sixty days after the day the assessment was issued, the portion of the assessment consisting of tax due shall bear interest at the rate per annum prescribed by section 5703.47 of the Revised Code from the day the commissioner issues the assessment until it is paid or until it is certified to the attorney general for collection under section 131.02 of the Revised Code, whichever comes first. If the unpaid portion of the assessment is certified to the attorney general for collection, the entire unpaid portion of the assessment shall bear interest at the rate per annum prescribed by section 5703.47 of the Revised Code from the date of certification until the date it is paid in its entirety. Interest shall be paid in the same manner as the tax and may be collected by the issuance of an assessment under this section.

(D) If the commissioner believes that collection of the tax will be jeopardized unless proceedings to collect or secure collection of the tax are instituted without delay, the commissioner may issue a jeopardy assessment against the person liable for the tax. Immediately upon the issuance of the jeopardy assessment, the commissioner shall file an entry with the clerk of the court of common pleas in the manner prescribed by division (C) of this section. Notice of the jeopardy assessment shall be served on the person assessed or the person's authorized agent in the manner provided in section 5703.37 of the Revised Code within five days of the filing of the entry with the clerk. The total amount assessed is immediately due and payable, unless the person assessed files a petition for reassessment in accordance with division (B) of this section and provides security in a form satisfactory to the commissioner and in an amount sufficient to satisfy the unpaid balance of the assessment. Full or partial payment of the assessment does not prejudice the commissioner's consideration of the petition for reassessment.

(E) The commissioner shall immediately forward to the treasurer of state all amounts the commissioner receives under this section, and such amounts shall be considered as revenue arising from the tax imposed under this chapter.

(F) Except as otherwise provided in this division, no assessment shall be made or issued against a taxpayer for the tax imposed under this chapter more than four years after the due date for the filing of the return for the tax period for which the tax was reported, or more than four years after the return for the tax period was filed, whichever is later. The time limit may be extended if both the taxpayer and the commissioner consent in writing to the extension or enter into an agreement waiving or extending the time limit. Any such extension shall extend the four-year time limit in division (A) of section 5736.08 of the Revised Code for the same period of time. Nothing in this division bars an assessment against a taxpayer that fails to file a return required by this chapter or that files a fraudulent return.

(G) If the commissioner possesses information that indicates that the amount of tax a taxpayer is required to pay under this chapter exceeds the amount the taxpayer paid, the commissioner may audit a sample of the taxpayer's gross receipts over a representative period of time to ascertain the amount of tax due, and may issue an assessment based on the audit. The commissioner shall make a good faith effort to reach agreement with the taxpayer in selecting a representative sample. The commissioner may apply a sampling method only if the commissioner has prescribed the method by rule.

(H) If the whereabouts of a person subject to this chapter is not known to the commissioner, the commissioner shall follow the procedures under section 5703.37 of the Revised Code.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.10 Effect of disposal of business; liability of purchaser.

If any person liable for the tax imposed under this chapter sells the trade or business, disposes in any manner other than in the regular course of business at least seventy-five per cent of assets of the trade or business, or quits the trade or business, any tax owed by such person shall become due and payable immediately, and the person shall pay the tax under this section, including any applicable penalties and interest, within forty-five days after the date of selling or quitting the trade or business. The person's successor shall withhold a sufficient amount of the purchase money to cover the amount due and unpaid until the former owner produces a receipt from the tax commissioner showing that the amounts are paid or a certificate indicating that no taxes are due. If a purchaser fails to withhold purchase money, that person is personally liable up to the purchase money amount, for such amounts that are unpaid during the operation of the business by the former owner.

The commissioner may adopt rules regarding the issuance of certificates under this section, including the waiver of the need for a certificate if certain criteria are met.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.11 Action by attorney general.

If any person subject to this chapter fails to report or pay the tax as required under this chapter, or fails to pay any penalty imposed under this chapter within ninety days after the time prescribed for payment of the penalty, the attorney general, on the request of the tax commissioner, shall commence an action in quo warranto in the court of appeals of the county in which the person has its principal place of business to forfeit and annul its privileges or franchise within this state. If the court finds that the person is in default for the amount claimed, it shall render judgment revoking the person's privileges or franchise within this state and shall otherwise proceed as provided in Chapter 2733. of the Revised Code.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.12 Recordkeeping.

The tax commissioner may prescribe requirements for the keeping of records and other pertinent documents, the filing of copies of federal income tax returns and determinations, and computations reconciling federal income tax returns with the returns and reports required by section 5736.04 of the Revised Code. The commissioner may require any person, by rule or notice served on that person, to keep those records that the commissioner considers necessary to show whether, and the extent to which, a person is subject to this chapter. Those records and other documents shall be open during business hours to the inspection of the commissioner, and shall be preserved for a period of four years unless the commissioner, in writing, consents to their destruction within that period, or by order requires that they be kept longer. If such records are normally kept by the person electronically, the person shall provide such records to the commissioner electronically at the commissioner's request.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.13 Funds for receiving, acounting, and distribution of tax revenue.

(A) For the purpose of receiving, accounting for, and distributing revenue received from the tax imposed by section 5736.02 of the Revised Code, the following funds are hereby created in the state treasury:

(1) The motor fuel receipts tax fund;

(2) The motor fuel receipts tax administration fund. All amounts credited to the motor fuel receipts tax administration fund shall be used solely for the purpose of paying the expenses of the department of taxation incident to the administration of the tax imposed by section 5736.02 of the Revised Code.

(3) The motor fuel receipts tax public highways fund.

(B) All money collected from the tax imposed by section 5736.02 of the Revised Code shall be deposited into the motor fuel receipts tax fund.

(C) From the motor fuel receipts tax fund, the director of budget and management shall place to the credit of the tax refund fund established by section 5703.052 of the Revised Code amounts equal to the refunds certified by the tax commissioner pursuant to section 5736.08 of the Revised Code.

(D) Not later than the last day of March, June, September, and December of each year, the director of budget and management shall provide for the transfer of the balance of the motor fuel receipts tax fund as of the last day of the preceding month, excluding any amounts required to be transferred as provided in division (C) of this section, as follows:

(1) To the motor fuel receipts tax administration fund, one per cent;

(2) To the motor fuel receipts tax public highways fund, an amount that bears the same ratio to the balance in the motor fuel receipts tax fund, after subtracting the amount transferred under division (D)(1) of this section, that (a) the gross receipts attributed to motor fuel used for propelling vehicles on public highways and waterways as indicated by returns filed by the last day of the preceding month, bears to (b) all gross receipts as indicated by those returns;

(3) To the general revenue fund, the amount remaining after the transfers required by divisions (D)(1) and (2) of this section.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.14 Personal liability.

(A)

(1) If any person, regardless of organizational form, required to file reports and to remit taxes imposed under this chapter fails for any reason to file such reports or pay such taxes, any employees of the person having control or supervision of, or charged with the responsibility of, filing reports and making payments, or any officers or trustees of the person responsible for the execution of the person's fiscal responsibilities, are personally liable for the failure.

(2) The dissolution, termination, or bankruptcy of a person shall not discharge a responsible officer's, shareholder's, member's, manager's, employee's, or trustee's liability for failure of the person to file reports or remit taxes. The sum due for the liability may be collected by assessment in the manner provided in section 5736.09 of the Revised Code.

(B) If more than one individual is personally liable under this section for the unpaid tax of a person, then the liability of all such individuals shall be joint and several.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

5736.99 Fraudulent claims; violations of chapter.

(A) Any person that files a fraudulent refund claim under section 5736.08 of the Revised Code shall be fined the greater of not more than one thousand dollars or the amount of the fraudulent refund requested or imprisoned not more than sixty days, or both.

(B) Except as provided in this section, whoever violates any section of this chapter, or any rule adopted by the tax commissioner under this chapter, shall be fined not more than five hundred dollars or imprisoned not more than thirty days, or both.

(C) Any person that is subject to the tax imposed by this chapter and that is found to be engaged in distributing, importing, or causing the importation of motor fuel for consumption in this state without a license as required by section 5736.06 of the Revised Code shall be fined not more than one thousand dollars or imprisoned not more than one hundred eighty days, or both.

(D) The penalties provided in this section are in addition to any penalties imposed by the tax commissioner under section 5736.05 of the Revised Code.

Added by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.