IMPOSITION OF TAX - The fuel tax is generally imposed on motor fuel as it is removed from the bulk transfer/terminal system (terminal rack). 142.809. The tax shall be precollected on behalf of the consumers by the distributor and remitted to the state through the supplier. The supplier shall pay the tax to the state by the second day of the second succeeding month. 142.842.

Distributors may elect to be "eligible purchasers". Eligible purchasers are not required to pay the tax to the supplier until two days before the supplier pays the Department of Revenue (a float period of 1-2 months, current law). Eligible purchasers also get the 2-3% deduction for shrinkage (current law). Eligible purchaser status depends upon bonding and financial responsibility requirements and upon timely payment of the tax to suppliers. 142.848 and 148.851.

LIABILITY - The terminal operator is liable for unaccounted motor fuel losses in excess of 0.5% per year. 142.812. The terminal operator is jointly liable for the tax on any fuel removed from the terminal by an unlicensed supplier. 142.845. Any person responsible for precollection of the tax (the distributor) is fully responsible for any unpaid tax. 142.833. The consumer shall be responsible for paying any tax which is not precollected. 142.866, 142.908.

EXEMPTIONS - Exemptions from the motor fuel tax are given for non-highway purposes such as farm tractors, for kerosene used in aircraft engines, and for diesel used as heating oil or in railroad engines. Refunds must be claimed. Other exemptions are given for the following specified reasons: (1) certain exports; (2) undyed kerosene sold in dispensers which prevent motor vehicle use; (3) U.S. government purposes; (4) Indian government functions; (5) other Indian use within Indian country; (6) operation of equipment on a vehicle with a common fuel supply tank; (7) fuel brought into Missouri in a vehicle's fuel supply tank; (8) casualty or contamination losses; and (9) dyed diesel of kerosene used for an exempt purpose. Different methods for claiming these 9 exemptions apply. 142.815-824.

IMPORTS & EXPORTS - The tax on imports shall be precollected by the distributor and remitted either directly or through the supplier. 142.836. Suppliers may elect to precollect the fuel tax for all imports from its out-of-state terminals which are destined for Missouri. 142.839. Exports and imports which are diverted to a destination within Missouri shall be reported to the Department of Revenue, and taxes shall be paid. 142.872. An import verification number and shipping papers are required for any import upon which the tax has not yet been paid. 142.929.

DEDUCTIONS & CREDITS - Distributors who are eligible purchasers get a deduction of 2-3% for shrinkage (2% for diesel, 3% for gasoline). 142.848. Suppliers removing fuel for their own account or for noneligible purchasers get the 2-3% deduction. 142.842. A licensed distributor importing motor fuel under a precollection agreement also gets the 2-3% deduction. 142.833. The deduction for shrinkage is current law.

Suppliers get a credit for taxes paid to the state but not received from an eligible purchaser. Notice of this credit must be made to the DOR within 10 business days, and the credit may be taken on the next return. 142.854 and 142.857. Suppliers may retain 0.1% of the tax imposed for administration requirements. 142.863.

LICENSES - Applications for licenses shall include information required by the DOR, and licenses may be denied for nine reasons. 142.878. Licenses are required for suppliers, terminal operators, transporters, distributors and interstate motor fuel users. 142.830 and 142.884-893. Licenses are not transferable; business transfers and changes in majority interest must be reported. 142.899.

BONDS - Licensees must file a bond, a certificate of deposit or an irrevocable letter of credit. The bond may be increased if the licensee's financial condition warrants it or if the bond is insufficient to guarantee payment of the tax. 142.881. Any distributor not required to post a bond under the current law may elect to participate in a mutual bond trust fund held for the benefit of participating distributors to prevent any loss to the state. Other distributors may participate after three consecutive years of tax compliance. 142.896.

DOCUMENTS - Various reports are required. 142.875, 142.896 and 142.902. The requirements for shipping documents are set out. 142.911, 142.914, 142.926 and 142.938. Special rules are provided for diversions from the original destination state. 142.917.

DYED FUEL - Vehicles shall not be operated upon the highways with dyed fuel. Notices shall be provided by terminal operators and any sellers of dyed diesel fuel or dyed kerosene. A statement shall be placed on every shipping paper on a transport truck indicating the dyed fuel is for "nontaxable use only, penalty for taxable use". 142.932, 142.935 and 142.926.

PENALTIES - The Director of Revenue may revoke licenses or seek civil penalties for violations of this chapter. Criminal penalties also apply. Interest is applied to late tax payments, and vehicles may be impounded in certain instances. 142.905-914 and 142.923.

INSPECTIONS & AUDITS - The Director of Revenue may inspect any tank, reservoir or container used for the production, storage or transportation of fuel. All shipping papers and documents shall be kept for immediate inspection. Inspection sites are designated. Inspections may also be conducted by the Department of Public Safety, the Department of Agriculture, motor carrier inspectors and any law enforcement officer through procedures set by the Director if Revenue. Audits and record examinations are authorized. 142.941, 142.944 and 142.950.

RULEMAKING - No general rulemaking authority is granted. Specific provisions for rules are provided in several sections.

MICHAEL HOEFERKAMP