SB 5741 — Clarifying the collection of fuel taxes within tribal jurisdictions. (REVISED FOR ENGROSSED: Clarifying the collection of fuel taxes on motor vehicle fuel sold by businesses owned or operated by a tribe or member of the tribe. )

S-1181.1SENATEENGROSSED SENATE BILL 5741State of Washington65th Legislature2017 Regular SessionBy Senator KingRead first time 02/06/17.

Referred to Committee on Transportation.AN ACT Relating to clarifying the collection of fuel taxes withinon tribalmotor jurisdictions;vehicle fuel sold by businesses owned or operated by a tribe or member of the tribe;

Failure to pay the tax with respect to a taxable event ((shall)) does not prevent tax liability from arising by reason of a subsequent taxable event.(2) It is the intent of the legislature that, in the absence of a tribal fuel tax agreement, as referenced in RCW 82.38.310, applicable taxes imposed by this chapter be collected on motor vehicle fuel sold by a business licensedowned or operated by a tribe or an Indianenrolled tribalmember organizationof the tribe, when such sale is to any person who is not an enrolled member of the federallysame recognized Indian tribe withinas whose jurisdiction the salebusiness takesowner placeor operator, consistent with collection of these taxes generally within the state.

134 (1980).(1980).Sec. 3.  RCW 82.38.035 and 2013 c 225 s 105 are each amended to read as follows:(1) A licensed supplier is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9) (a) and (i).

ForOn a two-party exchange, or buy-sell agreement between two licensed suppliers, the purposesreceiving exchange partner or buyer ((shall be)) is liable for and pay the tax.(2) A refiner is liable for and must pay tax on fuel removed from a refinery as provided in RCW 82.38.030(((7))) (9)(b).(3) A licensed distributor is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9)(c).(4) A licensed blender is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9)(f).(5) A licensed dyed special fuel user is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9)(g).(6) A terminal operator is jointly and severally liable for and must pay tax on fuel if, at the time of removal:(a) The position holder of the fuel is a person other than the terminal operator and is not a licensee;(b) The terminal operator is not a licensee;(c) The position holder has an expired internal revenue notification certificate;(d) The terminal operator has reason to believe that information on the internal revenue notification certificate is false.(7) A terminal operator is jointly and severally liable for and must pay tax on special fuel if the special fuel is removed and is not dyed or marked in accordance with internal revenue service requirements, and the terminal operator provides a person with a bill of lading, shipping paper, or similar document indicating the special fuel is dyed or marked in accordance with internal revenue service requirements.(8) International fuel tax agreement licensees, or persons operating motor vehicles under other reciprocity agreements entered into with the state of Washington, are liable for and must pay tax on fuel used to operate motor vehicles on state highways.(9) Dyed special fuel users are liable for and must pay tax on dyed special fuel used on state highways unless the use of the fuel is exempt from the tax.(10) Any person who purchases fuel from a business that is owned or operated by a federally recognized Indian tribe or an enrolled member of such tribe and the tribe does not have a fuel tax agreement with the state as referenced in RCW 82.38.310, and who is not an enrolled member of the same tribe as the business owner or operator from whom the person purchases fuel, is liable for the applicable taxes imposed by this subsection:chapter if those taxes have not been paid by any of the entities listed under subsections (1) through (4) of this section.NEW SECTION.  Sec. 4.  A new section is added to chapter 82.38 RCW to read as follows:The department, in conjunction with the state patrol, must adopt rules to develop enforcement mechanisms for the collection of taxes owed under RCW 82.38.035(10).--- END ---

"Indian tribal organization" means a federally recognized Indian tribe, or tribal entity, and includes an Indian wholesaler or retailer that is owned by an Indian who is an enrolled tribal member conducting business under tribal license or similar tribal approval within Indian country;

and "Indian country" is defined in the manner set forth in 18 U.S.C.

Sec.

1151.Sec. 3.  RCW 82.38.035 and 2013 c 225 s 105 are each amended to read as follows:(1) A licensed supplier is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9) (a) and (i).

On a two-party exchange, or buy-sell agreement between two licensed suppliers, the receiving exchange partner or buyer ((shall be)) is liable for and pay the tax.(2) A refiner is liable for and must pay tax on fuel removed from a refinery as provided in RCW 82.38.030(((7))) (9)(b).(3) A licensed distributor is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9)(c).(4) A licensed blender is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9)(f).(5) A licensed dyed special fuel user is liable for and must pay tax on fuel as provided in RCW 82.38.030(((7))) (9)(g).(6) A terminal operator is jointly and severally liable for and must pay tax on fuel if, at the time of removal:(a) The position holder of the fuel is a person other than the terminal operator and is not a licensee;(b) The terminal operator is not a licensee;(c) The position holder has an expired internal revenue notification certificate;(d) The terminal operator has reason to believe that information on the internal revenue notification certificate is false.(7) A terminal operator is jointly and severally liable for and must pay tax on special fuel if the special fuel is removed and is not dyed or marked in accordance with internal revenue service requirements, and the terminal operator provides a person with a bill of lading, shipping paper, or similar document indicating the special fuel is dyed or marked in accordance with internal revenue service requirements.(8) International fuel tax agreement licensees, or persons operating motor vehicles under other reciprocity agreements entered into with the state of Washington, are liable for and must pay tax on fuel used to operate motor vehicles on state highways.(9) Dyed special fuel users are liable for and must pay tax on dyed special fuel used on state highways unless the use of the fuel is exempt from the tax.(10) Any person who purchases fuel from a business licensed by an Indian tribal organization that does not have a fuel tax agreement with the state, as referenced in RCW 82.38.310, and who is not an enrolled member of the federally recognized Indian tribe within whose jurisdiction the sale takes place, is liable for the applicable taxes imposed by this chapter if those taxes have not been paid by any of the entities listed under subsections (1) through (4) of this section.

For the purposes of this subsection:

"Indian tribal organization" means a federally recognized Indian tribe, or tribal entity, and includes an Indian wholesaler or retailer that is owned by an Indian who is an enrolled tribal member conducting business under tribal license or similar tribal approval within Indian country;

and "Indian country" is defined in the manner set forth in 18 U.S.C.

Sec.

1151.NEW SECTION.  Sec. 4.  A new section is added to chapter 82.38 RCW to read as follows:The department, in conjunction with the state patrol, must adopt rules to develop enforcement mechanisms for the collection of taxes owed under RCW 82.38.035(10).--- END ---