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Ezel / Tax Rulings / KS
KS Notice 12-01 Kansas Motor Fuel Tax 2012-06-11

What did the 2012 Kansas Legislature change for motor fuel taxes and fuel-related funds?

Short answer: Kansas Notice 12-01 (June 11, 2012) summarizes three 2012 motor fuel bills. Senate Bill 294 (effective June 7, 2012) set quarterly $50,000 deposits into the Kansas Qualified Biodiesel Fuel Producer incentive for July 1 and October 1, 2012 and January 1 and April 1, 2013, subject to available funds (K.S.A. 79-34,156), and kept the Kansas Retail Dealer Incentive for renewable fuels and biodiesel unfunded through June 30, 2014 so no such incentive is provided through that date (K.S.A. 79-34,171). Senate Bill 406 (effective July 1, 2012) renamed the Kansas essential fuels supply trust fund as the UST redevelopment fund, used to reimburse eligible property owners for permanent closure of an abandoned underground storage tank, and abolishes the fund on July 1, 2024 (K.S.A. 65-34,131, 65-34,132, 65-34,134). House Bill 2455 (effective July 1, 2012) directed the Department of Transportation to study the long-term feasibility of the motor fuel tax as the primary highway funding source and report by January 1, 2014.

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This page answers the general question as of 2012. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2012
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Notice: public guidance the Department issues to explain Kansas tax law, most often a newly enacted statute. It states the Department's general interpretation and administration of the law; it does not have the force of law and is not a private ruling issued to any one taxpayer. It reflects the statutes, regulations, and rates in effect on its issue date and may since have been amended or superseded by a later notice or law change, so confirm it is still current before relying on it. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Kansas Notice 12-01 (June 11, 2012) highlights three motor fuel bills enacted by the 2012 Legislature.

Senate Bill 294 (effective June 7, 2012 on publication in the Kansas Register; provisions effective July 1, 2012):

  • Section 165 -- the Kansas Qualified Biodiesel Fuel Producer incentive receives quarterly deposits of $50,000, scheduled for July 1 and October 1, 2012 and January 1 and April 1, 2013, based on funds available in the economic development initiatives fund (K.S.A. 79-34,156).
  • Section 166 -- the Kansas Retail Dealer Incentive for renewable fuels and biodiesel remains "unfunded" through June 30, 2014, so no such incentive is provided through that date (K.S.A. 79-34,171).

Senate Bill 406 (effective July 1, 2012):

  • Section 5 redesignates the Kansas essential fuels supply trust fund as the UST redevelopment fund, which reimburses eligible property owners for allowable expenses of permanently closing an abandoned underground storage tank (K.S.A. 65-34,131).
  • Section 6 sets the property-owner application and eligibility requirements (K.S.A. 65-34,132).
  • Section 8 abolishes the fund on July 1, 2024 (K.S.A. 65-34,134).

House Bill 2455 (effective July 1, 2012) directs the Department of Transportation to convene a public discussion on the long-term feasibility of relying on the motor fuel tax as the primary highway funding mechanism, and to report findings and recommendations by January 1, 2014.

The notice states it highlights only portions of the bills and points readers to the Kansas Legislature's website for full text.

What this means for you

Biodiesel producers and renewable-fuel retailers

  • The Qualified Biodiesel Fuel Producer incentive is funded by scheduled quarterly deposits, subject to available funds.
  • Do not expect a Kansas Retail Dealer Incentive for renewable fuels or biodiesel through June 30, 2014 -- it is unfunded.

Underground storage tank owners

  • The renamed UST redevelopment fund can reimburse eligible owners for permanent closure of an abandoned tank; the fund is set to end July 1, 2024.

Fuel industry and policymakers

  • A KDOT study on the future of motor fuel tax funding was due to the governor and legislature by January 1, 2014.

Common questions

Is there a Kansas retail dealer incentive for biodiesel or renewable fuel? No -- Notice 12-01 states the incentive remained unfunded through June 30, 2014.

How much goes to the biodiesel producer incentive? Quarterly deposits of $50,000, subject to funds available in the economic development initiatives fund.

What replaced the essential fuels supply trust fund? It was redesignated the UST redevelopment fund, used to reimburse permanent closure of abandoned underground storage tanks.

When is the UST redevelopment fund abolished? July 1, 2024.

Citations and references

  • Senate Bill 294 (2012), Sections 165-166 -- biodiesel producer incentive deposits (K.S.A. 79-34,156) and unfunded retail dealer incentive through June 30, 2014 (K.S.A. 79-34,171).
  • Senate Bill 406 (2012), Sections 5, 6, 8 -- UST redevelopment fund and its abolition July 1, 2024 (K.S.A. 65-34,131, 65-34,132, 65-34,134).
  • House Bill 2455 (2012) -- KDOT motor fuel tax funding study, report due January 1, 2014.

Source

Original ruling text

Division of Taxation phone: 785-368-8222
915 SW Harrison St. fax: 785-296-4993
Topeka, KS 66612 www.ksrevenue.org

Nick Jordan, Secretary Sam Brownback, Governor
Steve Stotts, Director of Taxation

                                                  NOTICE 12-01

                                    2012 Motor Fuel Legislative Update

The following Bills were enacted by the 2012 Legislature:

Senate Bill 294
This bill was effective June 7, 2012, upon publication in the Kansas Register. The effective date referenced in the
sections below is July 1, 2012. A summary of the bill is as follows:

Section 165 is regarding the Kansas Qualified Biodiesel Fuel Producer incentive. Quarterly deposits of $50,000 are
scheduled for July 1 and October 1, 2012, and January 1 and April 1, 2013, based on funds available in the economic
development initiatives fund. K.S.A. 79-34,156.

Section 166 indicates the Kansas Retail Dealer Incentive for renewable fuels and biodiesel remains 'unfunded' through
June 30, 2014, therefore, no such incentive is provided through that date. K.S.A. 79-34,171.

Senate Bill 406
This bill is effective July 1, 2012. A summary of the bill is as follows:

Section 5 redesignates the Kansas essential fuels supply trust fund as the UST redevelopment fund. The funds credited
maybe expended to reimburse eligible property owners for allowable expenses for permanent closure of an abandoned
underground storage tank. The language also allows the Secretary of Health and Environment to conduct the same
activities if the owner or operator of the underground storage tank has not been identified or is unable or unwilling to
perform permanent closure. K.S.A. 65-34,131.

Section 6 indicates the property owner application and eligibility requirements. K.S.A. 65-34,132.

Section 8 abolishes the fund on July 1, 2024. K.S.A. 65-34,134.

House Bill 2455
This bill is effective July 1, 2012. The bill is as follows:

Section 1 directs the Department of Transportation to organize a discussion with the public and all interested stakeholders
about the long-term feasibility of relying on the motor fuel tax as the primary mechanism of funding the state's highway
maintenance and construction program and as the major contributor of state aid to local government transportation budgets.
The department is to report its findings and policy recommendations to the governor and the legislature by January 1, 2014.

This notice highlights only portions of the bills. For a detailed, full text copy of each bill, please visit the Kansas
Legislature's website at www.kslegislature.org.

                                         TAXPAYER ASSISTANCE

To obtain additional copies of this or any other notice call the Kansas Department of Revenue's voice mail forms
request line at 785-296-4937 or download them from our web site: www.ksrevenue.org. If you have any questions
about this notice, please contact our Motor Fuel Tax Unit.

                                        Motor Fuel Tax Correspondence
                                         Docking State Office Building
                                             915 SW Harrison St.
                                           Topeka, KS 66625-8000
                                             Tele: (785) 368-8222
                                              Fax: (785) 296-4993

Notice 12-01
June 11, 2012

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