Rates of Tax on Aviation Gasoline and Jet Fuel for 2009; Oil Company Franchise Tax Rate for 2009; Alternative Fuels Tax Rates for 2009
[38 Pa.B. 6822]
[Saturday, December 13, 2008]
Aviation Gasoline and Jet Fuels
Aviation Gasoline Rate for 2009
Under 74 Pa.C.S. § 6121(b) (relating to tax on aviation fuels), the Secretary of Revenue (Secretary) announces that for calendar year 2009 the rate of tax on aviation gasoline and all other liquid fuels used or sold and delivered by distributors within this Commonwealth for use as fuel in propeller-driven piston engine aircraft or aircraft engines increases to a new rate of 5.8¢1 per gallon or fractional part thereof.
Jet Fuel Rate for 2009
Under 74 Pa.C.S. § 6131(b) (relating to tax on jet fuels), the Secretary announces that for calendar year 2009 the rate of tax on jet fuels used or sold and delivered by distributors within this Commonwealth for use as fuel in turbine-propeller jet, turbojet and jet-driven aircraft and aircraft engines remains at the current rate of 2.0¢ per gallon or fractional part thereof.
Calculating the 2009 Aviation Gasoline and Jet Fuel Rates
The rate of tax on aviation gasoline is adjusted annually beginning on January 1, 1985 and each January 1 thereafter. The rate of tax on jet fuels is adjusted annually beginning on January 1, 1986 and each January 1 thereafter. Under 74 Pa.C.S. §§ 6121(b) and 6131(b) the rate of each tax increases or decreases 0.1¢ per gallon for each 10% increase or decrease in the producer price index for jet fuel as determined by the U.S. Department of Labor, Bureau of Labor Statistics, for the most recent 12-month period available as of November 1, subject to a maximum rate of 6.0¢ per gallon for aviation gasoline and 2.0¢ per gallon for jet fuels.
On November 1, 2008, the most recently available 12-month period was September 2007 to September 2008, as reported in Bureau of Labor Statistics, U.S. Department of Labor, Producer Price Indexes, September 2008, USDL 08-1456, released October 15, 2008, for which the percentage change was (+) 53.4%. Accordingly, the aviation gasoline tax rate increases from the 2008 rate of 5.3¢ per gallon to the new 2009 rate of 5.8¢ per gallon; however, the jet fuel tax rate is unchanged for 2009, remaining at the 2008 rate of 2.0¢ per gallon.
Oil Company Franchise Tax
Oil Company Franchise Tax Rate for 2009
The Secretary announces that for the calendar year 2009 the rate of the oil company franchise tax remains at the current rate of 19.2¢ per gallon on all liquid fuels and 26.1¢ per gallon on all fuels used or sold and delivered by distributors within this Commonwealth under 75 Pa.C.S. § 9004(b) (relating to imposition of tax, exemptions and deductions).
Calculating the 2009 Oil Company Franchise Tax Rate
The rate of the oil company franchise tax imposed under 75 Pa.C.S. Chapter 95 (relating to taxes for highway maintenance and construction), 75 Pa.C.S. § 9502 (relating to imposition of tax), and collected under 75 Pa.C.S. Chapter 90 (relating to liquid fuels and fuels tax), 75 Pa.C.S. § 9004(b), is determined annually by the Department of Revenue (Department) and announced by each December 15 for the following calendar year. The tax rate is determined on a ''cents per gallon equivalent basis,'' which is defined by 75 Pa.C.S. § 9002 as:The average wholesale price per gallon multiplied by the decimal equivalent of any tax imposed by section 9502 (relating to imposition of tax), the product of which is rounded to the next highest tenth of a cent per gallon. The rate of tax shall be determined by the Department of Revenue on an annual basis beginning every January 1 and shall be published as a notice in the Pennsylvania Bulletin no later than the preceding December 15. In the event of a change in the rate of tax imposed by section 9502, the Department shall redetermine the rate of tax as of the effective date of such change and give notice as soon as possible.
''Average wholesale price'' as used previously is defined as:The average wholesale price per gallon of all taxable liquid fuels and fuels, excluding the federal excise tax and all liquid fuels taxes, as determined by the Department of Revenue for the 12-month period ending on the September 30 immediately prior to January 1 of the year for which the rate is to be set. In no case shall the average wholesale price be less than 90¢ nor more than $1.25 per gallon.
For the 12-month period ending September 30, 2008 the Department has determined that the average wholesale price of liquid fuels and fuels was $2.935 per gallon, which exceeds the statutory maximum of $1.25; therefore, an average wholesale price of $1.25 is used to compute the tax rate for 2009.
The oil company franchise tax imposed under 75 Pa.C.S. § 9502 in terms of mills applicable to each gallon is:
Imposition Section Liquid Fuels Fuels 75 Pa.C.S. § 9502(a)(1) 60.0 60.0 75 Pa.C.S. § 9502(a)(2) 55.0 55.0 75 Pa.C.S. § 9502(a)(3) 38.5 38.5 75 Pa.C.S. § 9502(a)(4) 00.0 55.0 Total Mills per Gallon: 153.5 208.5 Decimal Equivalent: .1535 .2085 Multiply by Average Wholesale Price: × $1.25 × $1.25 Product: 19.188¢ 26.063¢ Oil Company Franchise Tax per Gallon (Rounded Up to Next Highest Tenth): 19.2¢ 26.1¢
Collection of Oil Company Franchise Tax
The act of April 17, 1997 (P. L. 6, No. 3) provides that the oil company franchise tax as computed previously is collected at the same time as the liquid fuels and fuels tax of 12¢ per gallon; therefore, effective January 1, 2009 the combined rate of tax for liquid fuels (primarily gasoline) is 31.2¢ per gallon and for fuels (primarily undyed diesel fuel) is 38.1¢ per gallon.
Alternative Fuels Tax Rates for 2009
Under 75 Pa.C.S. § 9004(d) the Secretary is required to compute the rate of tax applicable to each alternative fuel on a gallon-equivalent-basis. Under 75 Pa.C.S. § 9002 ''gallon-equivalent-basis'' is defined as the ''amount of any alternative fuel as determined by the Department to contain 114,500 BTUs.'' The amount determined on a ''gallon-equivalent-basis'' for each alternative fuel is subject to the liquid fuels and oil company franchise taxes currently imposed on one gallon of gasoline. The rate of tax on one gallon of gasoline during the period of this notice is 12.0¢ for the liquid fuels tax and 19.2¢ for the oil company franchise tax for a total tax of 31.2¢ per gallon of gasoline.
The Secretary announces that the 2009 tax rates for alternative fuels are as follows:
Alternative Fuel Rate of Conversion (BTU/gal of alternative fuel Amount Equivalent to One Gallon of Gasoline @ 114,500 BTU per gallon Tax Rate per Gallon of Alternative Fuel Ethanol 76,400 1.499 $.208 Methanol 56,560 2.024 $.154 Propane/LPG 83,500 1.371 $.228 E-85 80,460 1.423 $.219 M-85 65,350 1.752 $.178 Compressed Natural Gas (CNG) 29,000 @ 3,000 PSI 3.948 $.079 Liquefied Natural Gas (LNG) 66,640 1.718 $.182 Electricity 3,412 BTU/KWH 33.558
[Pa.B. Doc. No. 08-2258. Filed for public inspection December 12, 2008, 9:00 a.m.]
1 The rate of 5.8¢ per gallon consists of the 1.5¢ per gallon tax imposed by the Liquid Fuels and Fuels Tax Act, 75 Pa.C.S. § 9004(c)(1), and the 4.3¢ per gallon additional tax imposed by 74 Pa.C.S. § 6121(a). As limited by 74 Pa.C.S. § 6121(b), the combined rate of these two component taxes may never exceed 6¢ per gallon or be less than 3¢ per gallon.
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