2194 Rates of tax on aviation gasoline and jet fuel for 2002; oil company franchise tax rate for 2002

Rates of Tax on Aviation Gasoline and Jet Fuel for 2002; Oil Company Franchise Tax Rate for 2002

[31 Pa.B. 6751]

Aviation Gasoline and Jet Fuels

   Under 74 Pa.C.S. § 6121(b), the Secretary of Revenue announces that for the calendar year 2002 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 will decrease from the current rate of 4-3/10¢ to 4-1/10¢* per gallon or fractional part thereof.

   Under 74 Pa.C.S. § 6131(b), the Secretary of Revenue announces that for the calendar year 2002 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 will decrease from the current rate of 2¢ per gallon to 1-8/10¢ per gallon or fractional part thereof.

   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 1/10¢ per gallon for each 10% increase or decrease in the producer price index for jet fuel as determined by the United States 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¢ per gallon for aviation gasoline and 2¢ per gallon for jet fuels. On November 1, 2001, the most recently available 12-month period was September 2000 to September 2001, as reported in Bureau of Labor Statistics, United States Department of Labor, Producer Price Indexes, September 2001, USDL 01-347, released October 12, 2001, for which the percentage change was -20.5%. Accordingly, the aviation gasoline tax rate and jet fuel tax rate both decrease by 2/10¢ per gallon.

Oil Company Franchise Tax

   The Secretary of Revenue announces that for the calendar year 2002 there is an increase in the current rate of the oil company franchise tax from 14.0¢ per gallon to 14.6¢ per gallon on all liquid fuels and from 18.9¢ per gallon to 19.8¢ per gallon on all fuels used or sold and delivered by distributors within this Commonwealth under 75 Pa.C.S. §§ 9004(b) and 9002, definition of ''cents per gallon equivalent basis.''

   The rate of the oil company franchise tax imposed under Chapter 95 (Taxes for Highway Maintenance and Construction) of the Vehicle Code, 75 Pa.C.S. § 9502, and collected under Chapter 90 (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, 2001, the Department has determined that the average wholesale price of liquid fuels and fuels was 94.7¢ per gallon; accordingly, an average wholesale price of 94.7¢ per gallon is used to determine the rate for 2002.

   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:	x 94.7¢	x 94.7¢
Product:	14.536¢	19.745¢
Oil Company Franchise    Tax per Gallon    (Rounded Up to    Next Highest Tenth):	14.6¢	19.8¢

   Act 3 of 1997 provides that the oil company franchise tax as previously computed is collected at the same time as the liquid fuels and fuels tax of 12¢ per gallon; therefore, effective January 1, 2002, the combined rate of tax for liquid fuels (primarily gasoline) is 26.6¢ per gallon and for fuels (primarily diesel fuel) is 31.8¢ per gallon.

LARRY P. WILLIAMS,   
Secretary

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* The rate of 4-1/10¢ per gallon consists of the 1-1/2¢ per gallon tax imposed by the Liquid Fuels and Fuels Tax Act, 75 Pa.C.S. § 9004(c)(1), and the 2-6/10¢ 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.

[Pa.B. Doc. No. 01-2194. Filed for public inspection December 7, 2001, 9:00 a.m.]