What Kansas motor-fuel changes in 2006 affected biodiesel incentives, the E-85 tax rate, electronic filing, and storage-tank reimbursements?

Plain-English summary

Notice 06-04 summarized three motor-fuel bills enacted in 2006.

• Senate Bill 388 created the Kansas Qualified Biodiesel Fuel Producer Incentive Fund. A qualified producer could claim $0.30 per gallon of biodiesel sold, with quarterly incentive filings beginning July 1, 2007.
• Senate Bill 544 defined E-85, reduced its motor-fuel tax rate to $0.17 per gallon effective January 1, 2007, and required distributors receiving or importing 50,000 gallons or more in a calendar month to file by electronic or magnetic media. The Department revised Forms MF-52 and MF-90 and related schedules for the changes.
• House Bill 2756 created the Kansas Essential Fuels Supply Trust Fund, effective July 1, 2006. Subject to available money, it reimbursed eligible owners of aboveground storage tanks or bulk plants used to store petroleum products for resale for upgrade or permanent-closure expenses. The Kansas Department of Health and Environment administered it.

What this means for you

Biodiesel producers

The incentive described here depended on gallons sold and quarterly filing beginning in July 2007. Confirm later funding and program rules before applying it to another period.

Large fuel distributors

The 50,000-gallon monthly threshold triggered electronic or magnetic filing under the notice.

Storage-tank and bulk-plant owners

Reimbursement was limited to eligible facilities, qualifying upgrade or closure costs, petroleum storage for resale, and available trust-fund money.

Common questions

Q: What was the biodiesel producer incentive?
A: $0.30 per gallon of biodiesel sold by a qualified Kansas producer.

Q: What E-85 tax rate took effect January 1, 2007?
A: $0.17 per gallon.

Q: Who had to file electronically?
A: Distributors receiving or importing at least 50,000 gallons of motor fuel in a calendar month.

Q: Did the storage-tank fund guarantee reimbursement?
A: No. Reimbursement was subject to available money in the fund.

Citations and references

• 2006 Senate Bills 388 and 544.
• K.S.A. 79-3401, 79-34,141, and 79-3464c.
• 2006 House Bill 2756 and K.S.A. 65-34,117.

Subject

2006 Motor Fuel Legislative Update

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 06-04

Original ruling text

Notice
Notice Number: 06-04
Tax Type: Motor Vehicle Fuel Tax
Brief Description: 2006 Motor Fuel Legislative Update
Keywords:
Approval Date: 06/22/2006

Body:
DEPARTMENT OF REVENUE
DIVISION OF TAXATION

                                                      NOTICE 06-04

                                          2006 Motor Fuel Legislative Update

The following Bills were enacted by the 2006 Legislature:

· Senate Bill 388 establishes the Kansas Qualified Biodiesel Fuel Producer Incentive Fund, which allows for the payment of
producer incentives for the production of biodiesel. The incentive is for the production of biodiesel fuel in the amount of $.30 for
each gallon of biodiesel fuel sold by the producer. The Kansas qualified biodiesel fuel producer shall file for the production incentive
beginning July 1, 2007, and quarterly thereafter.

        Additional information will be provided at a later date.

· Senate Bill 544 amends K.S.A. 79-3401 by including a definition for “E85 fuels”. K.S.A. 79-34,141 is amended and reduces the
Motor Fuel tax rate on E85 fuels to $.17 per gallon. K.S.A. 79-3464c is amended to require distributors receiving or importing
50,000 gallons of motor fuel or more in a calendar month to file by electronic or magnetic media. This bill is effective January 1,
2007.

        Enclosed is a copy of the revised MF-52 Distributors Tax Return and new Schedule MF-52C for Distributors, or the
        revised MF-90 Retailers’ Informational Return and revised Schedule MF-90B, as appropriate.

        EDI (Electronic Data Interchange) software mapping changes will be provided soon. The EDI Guide will also be
        updated at that time and can be obtained from our website at www.ksrevenue.org.

        Customers receiving or importing 50,000 gallons of motor fuel or more per month will be provided the EDI
        requirements at a later date.

· House Bill 2756 amends K.S.A. 65-34,117 and creates the Kansas Essential Fuels Supply Trust Fund. This bill provides for
reimbursement to eligible owners of aboveground storage tanks or bulk plants for upgrade or permanent closure expenses for
aboveground storage tanks or bulk plants if used for storage of petroleum products for resale. Reimbursement is subject to
availability of moneys in the Kansas essential fuels supply trust fund and shall be administered by the Kansas Department of Health
and Environment. This bill is effective July 1, 2006.

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
(785) 368-8222
Fax: (785) 296-2703

Page 2

Notice 06-04
June 26, 2006

Date Composed: 06/22/2006 Date Modified: 06/22/2006

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