Effective July 1, 2012: Changes to the Petroleum Products Delivery Fee

House Bill 2694, passed during the 82nd Legislature Regular Session (2011), reauthorized and made permanent, the fee on the delivery of certain petroleum products that was set to expire on Aug. 31, 2011. The law requires the Texas Commission on Environmental Quality (TCEQ) by rule to set the amount of the petroleum product delivery fee rates. The fee applies to all petroleum products imported into Texas or withdrawn from a Texas bulk storage facility and delivered into cargo tanks or barges. The fee set by the TCEQ is based upon total net gallons delivered, as shown in this schedule, beginning July 1, 2012:

Gallons Delivered Fee
Less than 2,500 net gallons $  2.75
2,500 but less than 5,000 net gallons $  5.50
5,000 but less than 8,000 net gallons $  8.65
8,000 but less than 10,000 net gallons $11.00
10,000 or more net gallons, per 5,000 or increment thereof $  5.50

 

For gasoline deliveries of at least 7,000 but less than 8,000 net gallons (whether single product type or split load), special rules apply:

  • If the gasoline portion of the delivery is less than 7,000 net gallons, the fee is $8.65.
  • If the gasoline portion of the delivery is at least 7,000 net gallons, the total load is presumed to be at least 8,000 gallons and the fee is $11.00.

For more information, please see the Petroleum Products Delivery Fee page on our website.

*Originally published in the May edition of Tax Policy News – a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1205.html

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Unauthorized Insurance

Every unauthorized insurer must file the Texas Annual Insurance Tax Report (Form 25-108) (PDF) and its supplement (Form 25-123) (PDF). The form is due on or before March 1 following the calendar year in which the insurance was effectuated, continued or renewed. If the due date falls on a Saturday, Sunday or legal holiday, the next business day is the due date.

All insurance activities in Texas outside of the licensed market are unauthorized insurance unless they fall within the legislative safe harbors of surplus lines or independently procured insurance.

An unauthorized insurance transaction is an activity performed in Texas by an insurer or person not holding a valid certificate of authority to do an insurance business in this state; or transacting business not authorized by a valid certificate. While not an exhaustive list, the following activities in Texas are examples of acts that constitute the business of insurance:

  • issuing or delivering contracts of insurance to residents of Texas;
  • soliciting applications for such contracts; or
  • collecting premiums, membership fees, assessments or other consideration for such contracts.

Activities performed in Texas by a nonadmitted captive insurance company (insuring only its parent or affiliates) are unauthorized transactions, as the captive insurer is not authorized by the Department of Insurance. The regulatory prohibitions and sanctions applicable to unauthorized insurance transactions do not apply to the nonadmitted captive insurance company. There is still unauthorized insurance premium tax due on this business.

Exceptions and exclusions from tax include premiums on risks or exposures properly allocated to federal waters, international waters, or under the jurisdiction of a foreign government. In addition, there are certain federal preemptions from state taxation for the Federal Deposit Insurance Corporation (FDIC) when it is the receiver of a failed financial institution that holds the property being insured, a federally chartered credit union, the National Credit Union Administration (NCUA) when it is the conservator or liquidating agent for a federally chartered credit union and risks or exposures of Indian Tribal Nations that are located within the borders of Tribal Lands. Refer to Surplus Lines Tax Exemptions/Preemptions (Pub. 94-142) for more information.

*Originally published in the May edition of Tax Policy News – a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1205.html

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Reimbursement of Coin-Operated Machines Occupation Tax

To operate or exhibit a coin-operated music or coin-operated skill or pleasure machine in Texas, the owner of the machine must be licensed or registered with the Comptroller’s office. In addition, an annual $60 machines occupation tax must be paid for each machine exhibited. Machine owners are reimbursed for the payment of machine occupation taxes.

The Coin-Operated Machines Law, in Occupations Code Subsection 2153.205(a), provides that the first money earned from the exhibition of a coin-operated amusement machine may be paid to the owner as reimbursement for payment of state and local machine occupation taxes. Subsection (b) further stipulates that a portion of the money earned each year from the machine must be paid to the owner to reimburse the owner for the next year’s occupation taxes.

Therefore, when a coin-operated amusement machine is exhibited for the first time at a location in Texas, the first money earned from the machine may be used to reimburse the machine owner for that year’s occupation taxes. In addition, enough money must be taken each year from machine earnings to reimburse the owner for the following year’s occupation taxes.

The law does not specify when a reimbursement under subsection (b) occurs, just that the reimbursement must be made in the current year for the next year’s occupation taxes.

A machine owner is prohibited from waiving the reimbursement requirement, and from compensating the location owner more than 50 percent of the machine’s receipts after reimbursement. The law requires the Comptroller to revoke the license of a machine owner who violates these provisions. See Occupations Code Subsections 2153.205(c) and (d).

For more information, see the Coin-Operated Machines Tax section of our website and Coin-Operated Amusement Machine Regulation and Taxation (Pub 96-256).

*Originally published in the May edition of Tax Policy News – a monthly newsletter about Texas tax policy at http://www.window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1205.html

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Muslim Al-Musawi, 55, of Arlington

Muslim Al-Musawi, 55, of Arlington, was found guilty by a Travis County jury of seven counts of cigarette and tobacco tax fraud. Al-Musawi was accused in two indictments of failing to maintain books and records relating to cigarette and tobacco purchases, possessing unstamped cigarettes, possessing tobacco products with more than $50 in tax due, and failing to produce records to the Comptroller as required by Chapter 154 of the Tax Code. The offenses were alleged to have occurred in September 2009 and February 2010. The cases, filed as cause numbers D1DC12-904045 and -46, were prosecuted in Travis County. On June 28th, Al-Musawi was sentenced by the court to 4 years in the Institutional Division of the Texas Department of Criminal Justice, probated for six years, on each count, to run concurrently. Al-Musawi was ordered to perform 100 hours of community service on each count, fined $5,000, and ordered to pay $1,800 combined restitution to the Comptroller of Public Accounts.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Don Kurt Dunn, 31, of Fort Worth

Don Kurt Dunn, 31, of Fort Worth, entered a plea of guilty to Evading Motor Fuel Tax, a second-degree felony. Dunn was sentenced to 8 years deferred adjudication and ordered to serve 24 days confinement in the Travis County Jail as a condition of probation. Dunn was ordered to pay a $4,000 fine, to complete 200 hours of community service, and to have no contact with co-defendant Donald Ray Scott III. Dunn’s case, filed as cause number D1DC10-900216, was prosecuted in Travis County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

 

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Donald Ray Scott III, 38, of Fort Worth

Donald Ray Scott III, 38, of Fort Worth, entered a plea of guilty to Evading Motor Fuel Tax, a second-degree felony. Scott was sentenced to 8 years deferred adjudication and ordered to serve 50 days confinement in the Travis County Jail as a condition of probation. Scott was ordered to pay a $10,000 fine, $33,068 in restitution to the Comptroller of Public Accounts, to complete 250 hours of community service, and to have no contact with co-defendant Don Kurt Dunn. Scott’s case, filed as cause number D1DC10-900218, was prosecuted in Travis County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Charles Jerome Hutchinson, 44, of Humble

Charles Jerome Hutchinson, 44, of Humble, was arrested after being indicted June 11th by a Travis County Grand Jury for Evading Motor Fuel Tax, a second-degree felony. Hutchinson is accused in court documents of evasion at various points in the chain of distribution including the acquisition, transportation, and sale of motor fuel. Hutchinson’s case, filed as D1DC12-900112, is pending in Travis County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Michael James Merrill, 40, of Snyder

Michael James Merrill, 40, of Snyder, was arrested after being indicted June 11th by a Travis County Grand Jury for second-degree felony motor fuel tax fraud. Merrill is accused in court documents of Evading Motor Fuel Tax by intentionally and knowingly using dyed diesel for the operation of a motor vehicle on a public highway, storing motor fuel upon which taxes were owed but not paid, and failing to remit to the Comptroller motor fuel tax funds required to be collected and remitted. Merrill’s case, filed as cause number D1DC12-90032, is pending in Travis County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Salvador Armendariz, 63, of El Paso

Salvador Armendariz, 63, of El Paso, was convicted of two second-degree motor fuel tax fraud felonies and sentenced to 4 years imprisonment on each case, to run concurrently. The sentences will be served in the Institutional Division of the Texas Department of Criminal Justice. Armendariz pled guilty to Engaging in a Motor Fuel Tax Fraud Scheme, and to Illegal Sale, Distribution, or Storage of Motor Fuel. Armendariz was one of seven individuals arrested as part of “Operation Filler Up,” an investigation into thefts of untaxed, unleaded fuel from an El Paso fuel terminal. His cases were prosecuted as cause numbers D1DC11-900045 and -329 in Travis County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Jesus Rubalcaba, Jr., 46, of Midland

Jesus Rubalcaba, Jr., 46, of Midland, was indicted by a Midland County Grand Jury for the offense of State Jail Felony Theft. Rubalcaba is accused in court documents of theft of diesel fuel, oil, and tires valued at more than $7,000 from Petro Plex Pipe. The case, indicted as Midland County cause number CR 40046, is pending in Midland County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Victor Ray Mendoza, Jr., 29, of San Angelo

Victor Ray Mendoza, Jr., 29, of San Angelo, was indicted by a Tom Green County Grand Jury for third-degree felony tobacco tax fraud after being arrested in October 2011. Mendoza is accused by indictment of possessing tobacco products with more than $50 in tax due. Mendoza’s case, filed as B-12-0473-SB, is pending in District Court in Tom Green County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Blanca Ronquillo-Corrales, 42, of Odessa

Blanca Ronquillo-Corrales, 42, of Odessa, was arrested after being indicted by a federal grand jury for an offense involving motor fuel. Ronquillo-Corrales is accused in the indictment, with co-defendant Jose Maria Delbosque, of knowingly and with the intent to defraud accessing a protected computer device without authorization in order to obtain fuel. The indictment is pending in the United States District Court, Western District of Texas, Midland-Odessa Division as cause number MO12CR0149.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Raul B. Sanchez, 46, of Del Rio

Raul B. Sanchez, 46, of Del Rio, was convicted of Concealing Motor Fuel, a Class A misdemeanor, after entering a plea of guilty. Sanchez was sentenced to 6 months in the Reeves County Jail, probated for one year, and was fined $1,000. The case was prosecuted as Reeves County cause number 27856.

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Alexander Sanchez, 27, of Eldorado

Alexander Sanchez, 27, of Eldorado, was indicted by a Pecos County Grand Jury after being arrested April 25 for Evading or Attempting to Evade Motor Fuel Tax, a second-degree felony. Sanchez is accused in court documents of intentionally and knowingly evading or attempting to evade motor fuel tax by delivering dyed diesel fuel into the fuel supply tank of a motor vehicle for operation on a public highway. The case, filed as cause number 3204, is pending in Pecos County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Raul Sanchez, 46, of Eldorado

Raul Sanchez, 46, of Eldorado, was convicted of Concealing Motor Fuel, a Class A misdemeanor, after entering a plea of guilty to the offense. Sanchez was sentenced to 6 months in the Reeves County Jail, probated for one year, and fined $1,000. He was also ordered to perform 24 hours community service. The case, filed as cause number 27856, was prosecuted in Reeves County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Fernando Baca, 55, of El Paso

Fernando Baca, 55, of El Paso, was arrested for State Jail Felony Theft. Baca is accused in court documents of buying at a discounted price 500 gallons of diesel fuel he knew was stolen. The fuel was valued at over $1800. Baca’s case is pending indictment in El Paso County.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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State of Texas offers alternative to paper filling

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Donna Bryant Shook, 47, of Victoria

Donna Bryant Shook, 47, of Victoria, was indicted by a Victoria County Grand Jury after being arrested on February 27th for tobacco tax fraud. Ms. Shook is alleged to have possessed tobacco products with more than $50 in tax due. She is also accused of failing to maintain books and records relating to tobacco products purchases as required by law. Both offenses are third-degree felonies. Ms. Shook’s case, filed as cause number 1204026537-D, is pending in Victoria County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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David Lee Shook, 26, of Victoria

David Lee Shook, 26, of Victoria, was indicted by a Victoria County Grand Jury after being arrested on February 27th for tobacco tax fraud. Mr. Shook is alleged to have possessed tobacco products with more than $50 in tax due. He is also accused of failing to maintain books and records relating to tobacco products purchases as required by law. Both offenses are third-degree felonies. Mr. Shook’s case, filed as cause number 1204026536-D, is pending in Victoria County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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Ronald Martin, 63, of Abilene

Ronald Martin, 63, of Abilene, was indicted by a Taylor County Grand jury after being arrested for a second-degree felony motor fuel tax offense. Morris is accused in court documents of intentionally and knowingly evading and attempting to evade motor fuel tax. The case, filed as cause number 18471B, is pending in Taylor County District Court.

*Originally published at http://www.window.state.tx.us/about/cid/case_news.html

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