Legislature(2015 - 2016)CAPITOL 17
02/24/2015 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| HB88 | |
| HB91 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 88 | TELECONFERENCED | |
| *+ | HB 91 | TELECONFERENCED | |
HB 88-FEES FOR TIRES
1:06:58 PM
CO-CHAIR HUGHES announced that the first order of business would
be HOUSE BILL NO. 88, "An Act relating to remittance of tire
fees; and providing for an effective date."
1:07:57 PM
ANNA KIM, Chief of Revenue Operations, Juneau Office, Department
of Revenue (DOR), on behalf of the administration, stated that
HB 88 proposes to change the deadline for vendors to report and
pay collected tire fees to the last day of the month. She
explained that tire fees and payments are due 30 days following
the last day of the calendar quarter. Thus for three of the
calendar quarters the filing and payment are due prior to the
last day of the month. This has caused taxpayer confusion about
filing dates and resulted in inadvertent late filings, as well
as penalties and interest on late filings. This bill would
provide a remedy.
1:09:06 PM
MS. KIM stated that Section 1 changes the return and tax payment
due date from 30 days following the last day of the calendar
quarter to the last day of the calendar month. She said this
means the due dates change from the original due dates of the
30th of July, October, and January to the 31st.
MS. KIM stated that Section 2 will align the payment and date
used to determine a timely paid credit with the adjusted due
dates listed in Section 1. She relayed that the timely paid
credit is intended to compensate taxpayers for collecting taxes
from customers and remitting fees to the state. She explained
that the timely paid credit allows vendors to retain five
percent of the amount of the tax collected not to exceed $900
per quarter, to cover expenses associated with collecting and
remitting the fees.
1:09:55 PM
MS. KIM stated that Section 3 will apply the due date changes to
the first calendar quarter after the effective date of the act
and Section 4 will add an immediate effective date. She
reported that the department's fiscal note is zero and the
department is not aware of any opposition to the bill.
1:10:41 PM
CO-CHAIR HUGHES asked whether the schedule for vendors who sell
tires will also match the schedule for those remitting motor
fuel taxes.
MS. KIM deferred to Mr. Spanos to respond.
1:11:17 PM
BRANDON SPANOS, Deputy Director, Tax Division, Anchorage Office,
Department of Revenue (DOR), stated that he was not aware of any
tire fee taxpayers who are also collecting motor fuel taxes;
however, if this did occur, the two separate returns would line
up. He explained that motor fuel taxes are filed monthly, but
taxpayer returns would line up since the due dates fall at the
end of the month. In addition, under the bill all of the
quarterly returns will fall at the end of the month rather than
the 30th day of the month.
1:12:13 PM
CO-CHAIR HUGHES asked for further clarification on the reduction
in revenue of $30,000.
MR. SPANOS answered that the figure may be estimated higher,
since the division has not yet analyzed how many taxpayers
actually pay one day late, but the figure is based on estimated
penalty and interest payments for a number of late filings. The
reduction in revenue reflects the loss of interest, penalties,
and taxpayer credits, he said. He explained that taxpayers
paying one day late incur a late filing penalty of 5 percent
plus 3.75 percent interest, as well as a timely filing credit of
up to $900.
1:13:17 PM
REPRESENTATIVE ORTIZ asked for the genesis of the bill and if it
came from the vendors.
MS. KIM answered that taxpayers have raised the issue of
inconsistencies in the due dates.
1:13:50 PM
REPRESENTATIVE CLAMAN related his understanding that this bill
would reduce the burden for businesses who sell tires since they
will have a clear schedule for remitting tax collections and the
loss of revenue reflects the division will not be collecting
penalties and interest for vendors with late filings.
MS. KIM answered that is correct.
1:14:14 PM
REPRESENTATIVE CLAMAN asked for further clarification that the
division will still collect late fees, but the expectation is
that since the deadline would be clearer, the department will
collect less penalties and interest.
MS. KIM answered that is also correct.
1:14:41 PM
CO-CHAIR FOSTER asked the department to elaborate on the tax
timely pay credit loss.
MS. KIM answered that vendors who pay timely retain 5 percent of
the tire fees that the division would normally collect.
1:15:15 PM
CO-CHAIR HUGHES asked how businesses will be notified of the
proposed change, for example, whether vendors will be notified
through the public notice process or if the department will
provide individual notices to taxpayers. She further asked for
information on the different types of tire fees for commercial,
studded, or off road tire fees.
MS. KIM explained that the outreach would be done by the excise
tax section. She said the division will also need to change its
forms. She envisioned that some type of announcement will be
posted on the department's website. She deferred to Mr. Spanos
to address tire fees.
1:16:29 PM
MR. SPANOS answered that two fees are associated with tires, the
first is a [$2.50] fee on the sale of all new tires, and the
second is a fee of $5 for studded tires; however, customers
buying studded tires are required to pay both fees.
CO-CHAIR HUGHES asked whether fees are different for large
commercial tires as compared to fees for passenger vehicles.
MR. SPANOS confirmed the tire fee is $2.50, but there is not any
difference in fees based on tire size. He clarified that the
stud fees are based on the stud weight so the $5 fee wouldn't
apply to a small aluminum stud, but it would apply to steel
studs. Further, tires used exclusively for off-road use are
exempt from the taxes.
1:18:46 PM
CO-CHAIR HUGHES, after first determining no one wished to
testify, closed public testimony on HB 88.
[HB 88 was held over.]
[CO-CHAIR HUGHES passed the gavel to Co-Chair Foster].