How did House Bill 2071 raise Kansas fuel tax rates starting July 1, 1999, and what inventory tax applied?

Plain-English summary

House Bill 2071 (1999) phased in higher Kansas motor fuel tax rates:

• +$.02 per gallon on July 1, 1999, then +$.01 on July 1, 2001, +$.01 on July 1, 2003, and a scheduled -$.04 on July 1, 2020.
• Rates effective July 1, 1999: gasoline $.20, gasohol $.20, diesel $.22, L.P. gases $.19.

The law also imposed a one-time inventory tax of the added $.02 per gallon on all tax-paid fuel in storage at 12:01 a.m. July 1, 1999, reported on the enclosed Form MF-219 with payment postmarked by July 26, 1999 (late returns owe 5% penalty plus interest).

Per Kansas Attorney General Opinion 95-80, to the extent the K.S.A. 79-3408c inventory tax would fall on a tribe or tribal-member retailer, it does not apply. (The July 1, 2001 step of this same increase is the subject of later Notice 01-01.)

What this means for you

If you sold or stored motor fuel in Kansas in 1999, your per-gallon tax rose 2 cents on July 1, 1999, and you owed a one-time inventory tax on the tax-paid fuel you held at that moment, due by July 26, 1999. Tribes and tribal-member retailers are not subject to that inventory tax.

Common questions

Q: What were the Kansas fuel tax rates on July 1, 1999?
A: Gasoline $.20, gasohol $.20, diesel $.22, and L.P. gases $.19 per gallon, each up $.02 from before.

Q: Did the inventory tax apply to tribal retailers?
A: No. Under Attorney General Opinion 95-80, to the extent the K.S.A. 79-3408c inventory tax would fall on a tribe or tribal-member retailer, it does not apply.

Citations and references

• 1999 House Bill 2071 (phased motor fuel tax rate increase)
• K.S.A. 79-3408c (inventory tax on fuel in storage)
• Kansas Attorney General Opinion 95-80 (inventory tax inapplicable to tribe/tribal member retailer)

Subject

Fuel Tax Increase

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 99-09

Original ruling text

Notice
Notice Number: 99-09
Tax Type: Motor Vehicle Fuel Tax
Brief Description: Fuel Tax Increase
Keywords:
Approval Date: 06/28/1999

Body:
NOTICE 99-09

                                               Fuel Tax Increase

House Bill 2071, enacted by the 1999 legislature, increases all fuel tax rates by $.02 per gallon, effective July 1, 1999;
$.01 per gallon on July 1, 2001; and $.01 per gallon on July 1, 2003. On July 1, 2020 the fuel tax rate will decrease
$.04 per gallon.

Effective July 1, 1999 the fuel tax rates for Kansas are as follows:

Gasoline $.20
Gasohol $.20
Diesel $.22
L.P. Gases $.19

This legislation also provided for an inventory tax on all tax paid fuels in storage at the time of any increase in tax
rates. Enclosed is the inventory tax return for payment of the additional $.02 per gallon on all tax paid fuel in storage
as of 12:01 a.m. July 1, 1999. The completed return with payment must be postmarked on or before July 26, 1999.

Pursuant to Attorney General opinion 95-80, to the extent that the inventory tax imposed by K.S.A. 79-3408c falls on
a tribe or tribal member retailer, said tax is inapplicable.

TAXPAYER ASSISTANCE

Should you have any questions regarding this notice or require additional information, feel free to contact this office
at 785-296-2411 or write Motor Fuel Tax Correspondence, Kansas Department of Revenue, 915 SW. Harrison St.,
Topeka, Kansas 66625-8100.

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 you can contact any of the offices listed below. Forms can also be downloaded from
our web site: www.ink.org/public/kdor.

Notice 99-09
June 28, 1999
KANSAS DEPARTMENT OF REVENUE
MOTOR FUEL INVENTORY TAX RETURN
FOR FUELS OWNED JULY 1, 1999

Page 2

                                                  (785) 296-2411
                                                FAX: (785) 296-4993

Please check each box that applies:
Licensed Motor Vehicle Fuel and Special Fuel Distributor
Licensed Motor Vehicle Fuel and Special Fuel Importer/Exporter
Licensed L.P. Gas User Dealer Licensed Motor Fuel Retailer

• SEE INSTRUCTIONS ON REVERSE SIDE FOR COMPLETING RETURN.

                     NUMBER OF GALS              TAX DUE AT                PENALTY       TOTAL TAX, PENALTY
  

  FUEL TYPE IN INVENTORY 7/1/99 $.02 PER GAL & INTEREST & INTEREST DUE
  1. Gasoline
  2. Gasohol
  3. Clear Diesel
  4. Tax Paid L.P.
  5. Total Gallons
  6. Total Amount Due
  MAKE REMITTANCE PAYABLE TO KANSAS DEPARTMENT OF REVENUE

Please indicate below the locations for which the above inventory tax is remitted:
Street Address City Street Address City

                                         Signature Title Date Telephone Number

MF-219 (Rev. 5/99)

                            INFORMATION AND INSTRUCTIONS

House Bill 2071, enacted by the 1999 legislature, increases all fuel tax rates by $.02 per gallon, effective July 1,
1999; $.01 per gallon on July 1, 2001; and $.01 per on gallon July 1, 2003. On July 1, 2020 the fuel tax rate will
decrease $.04 per gallon.

This return must be postmarked on or before July 26, 1999. The return and taxes due should be mailed to: MOTOR
FUEL TAX SECTION, KANSAS DEPARTMENT OF REVENUE, 915 SW. HARRISON, TOPEKA, KANSAS
66625-8000.

1. Please check all appropriate boxes to the right of your name and address. Include your license number(s) where
   applicable.

2. Number of gallons in inventory 7/1/99. Include all tax paid gallons as of 12:01 a.m. July 1, 1999.

3. Tax due at $.02 per gallon. Multiply the number of gallons in inventory by $.02 per gallon.

4. Penalty and interest. Inventory tax returns and payment not postmarked on or before July 26, 1999 are subject to
   penalty at the rate of 5% and interest at the rate of .0750 per month or fraction thereof.

5. Total tax, penalty and interest due. Enter total tax, penalty and interest for each fuel type.

6. Total gallons. Total number of gallons reported on lines 1 through 4.

7. Total amount due. Enter the total amount due for all fuel types.

Page 3

8. If the gallons listed on lines 1 through 4 include inventories for more than one location, please indicate in the space
   provided the locations included. If necessary use a separate sheet of paper for additional locations.

Should you have any questions or require additional information, feel free to contact this office at 785-296-2411 or
write Motor Fuel Tax Correspondence, Kansas Department of Revenue, 915 SW. Harrison St., Topeka, Kansas 66625-
8100.

Date Composed: 06/23/1999 Date Modified: 10/10/2001

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