RE: Imposition of the Environmental Response Tax and Increase in the Maui County Fuel Tax Rate
Act 300, Session Laws of Hawaii (SLH) 1993, amends Chapter 243, Hawaii Revised Statutes (HRS), relating to the fuel tax, to impose the environmental response tax. A tax of 5 cents per barrel is imposed on every barrel or fractional part of a barrel of petroleum product sold by a distributor to any retail dealer or end user after June 30, 1993. The tax is imposed on the distributor of the petroleum product.
The term "barrel" means 42 U.S. gallons and "petroleum product" is defined as any liquid hydrocarbon at standard temperature and pressure that is the product of the fractionalization, distillation, or other refining or processing of crude oil. Crude oil means petroleum in an unrefined state or natural state, including condensates and natural gasoline.
The environmental response tax collected is to be deposited into the environmental response revolving fund (Fund) established under Section 128D-2, HRS. The Department of Health is to use the revenue collected for oil spill planning, prevention, preparedness, education, research, training, removal and to support County used oil recycling programs. The moneys also may be used to address concerns related to underground storage tanks, including the underground storage tank program.
When the total balance of the Fund exceeds $7,000,000, the Department of Health is to notify the Department of Taxation of this fact. The Department of Taxation will notify distributors that the environmental response tax will be discontinued beginning the first day of the second month following the month in which the notice is given by the Department of Taxation. If the total balance of the Fund thereafter declines to less than $3,000,000, the Department of Health is to notify the Department of Taxation of this fact. The Department of Taxation will notify distributors of the reinstatement of the environmental response tax beginning the first day of the second month following the month in which the notice is given.
Each distributor subject to the tax shall file a return and remittance of the environmental response tax on the revised fuel tax return forms. The fuel tax forms are being revised and will be available July, 1993. There is no provision for a refund of the environmental response tax paid on petroleum products sold for off-highway use or agricultural use.
In addition to the new environmental response tax, Ordinance No. 2248, certified on June 10, 1993, increases the Maui County fuel tax by 2 cents per gallon of liquid fuel sold or used in Maui County. Although the Maui ordinance attempted to make the fuel tax increase effective July 1, 1993, under Section 243-5, HRS, it cannot become effective until August 1, 1993.
The Department of Taxation will have new Forms M-20A (1993), M-21A (1993), and M-23A (1993), for taxpayers to report the environmental response tax on the sale or use of petroleum products after June 30, 1993. New fuel tax forms to report the Maui County fuel tax increase will be available at the Department of Taxation in late July and will be mailed to distributors before August 1st.
To request a copy of Act 300, SLH 1993, or revised forms, contact the
district office of the Department of Taxation.
RICHARD F. KAHLE, JR.
Director of Taxation