96-005
Response
January 10, 1996
Request
Utah
State Tax Commission
210
North 1950 West
Salt
Lake City, UT 84134-4200
Re:
House Bill 120
Attn:
XXXXX
On
XXXXX I wrote to XXXXX over the changes in House Bill 120. I pointed out a segment of the industry that
was over looked. Attached you will find
a copy of my letter for you to review.
XXXXX suggested that I have you give me an advisory opinion. I would also suggest that you end a copy of
your opinion to XXXXX so that he and myself can further discuss my questions.
I
would appreciate hearing from you right away as I have on going licensing to
complete.
Sincerely,
XXXXX
XXXXX
Utah
State Tax Commission
210
N 1950 West
Salt
Lake City, UT 84134-4200
Re:
House Bill 120
Attn:
XXXXX
(XXXXX)
Dear
XXXXX,
After
reading through House Bill 120, I want to protest the action of this bill. This is a discriminatory act against certain
types of carriers. Would you give me
your response after reading this letter as I feel that the needs of all
Interstate Carriers should be met?
1. The bill indicates, motor vehicles with a
gross weight of 26,001 pounds or three axles qualifies vehicles for sales
and/or use tax exemption, however, their are other carriers that are being
discriminated against. I’ll explain
thus;
a. A motor carrier that has vehicles registered
for 80,000 lbs and has smaller trucks known as hot-shot vehicles, consists of a
truck and trailer combination with a gross weight anywhere from 18,000 to 24,000
lbs and up. These vehicles transport
commodities the same as the 80,000 lb trucks and display IRP registrations and
IFTA fuel decals the same as the big trucks.
Why was House Bill 120 written setting 26,001 as beginning weight?
b. When the IFTA program came into effect in
1993, we contacted the Tax Commission to see how these hot-shot vehicles are to
be reported and if they were to display IFTA decals on the vehicles. We were instructed to report their operations
on the IFTA report along with the larger trucks and to display IFTA decals just
like the big units. We have exempted
the sales tax on these units just like the larger units. Now this bill is undoing the program by
limiting gross weight on the smaller vehicles, so they can't exempt the sales
tax as they did in the past. Why, when
they are doing the same operations as the large trucks?
c. I think that the legislature was given
26,001 weight as a basis to follow the IFTA outline, without giving
consideration for the carriers operations.
The same thing would apply to the airlines when they use small commuter
planes in conjunction with their large planes.
Why, can't the 26,001 and the axle limitation limit be dropped so that
the carriers can continue to use both types of operations? Perhaps the legislature doesn't know or
understand the different types of operations.
d. The 26,001 is a discriminatory action as it
forces the hot shot operators (if they want to exempt sales taxes) to license
at a higher weight and that automatically forces them into the CDL license
which goes into effect at 26,000 lbs. Why, haven't these type carriers been
taken into consideration?
2. My recommendation is this; House Bill 120 be
changed so that the 26,001 weight is dropped so that all types of carrier meeting
the IRP and IFTA requirements, under item (1) of House Bill 120 can operate
without being discriminated against.
XXXXX,
I have a carrier that operates one (1) 80,000 lb vehicle and has (six) smaller
trucks that are operating under the same IRP and IFTA programs as the large
truck. The drivers of the smaller
trucks do not have CDL licenses as the trucks are licensed at 18,000 lbs. This is an installation and service operation. Both the IRP and IFTA programs are in place
and the reporting of the smaller trucks are being reported under the IFTA
reporting basis as instructed. House
Bill 120, disrupts this carriers operation.
I don't know if anyone has made you aware of the variables I have
pointed out for you.
I
have other carriers that operate interstate with a Common Carrier certificate
from the Interstate Commerce Commission with their equipment consisting of a
two (2) axle truck which pulls a two (2) axle trailer, with a combine gross
weight of 24,000. The vehicles are
prorated under the IRP, but, not required to be under the IFTA fuel
license. This type carrier hauls the
same freight as the large carriers but, on a smaller basis. The only difference is they may not register
in as many states as the large truck operations. But they do operate on a Interstate Basis. Why, are these carriers being discriminated
against?
Forgive
me for being so repetitive but, I must get the point across and get some action
going to correct the problem.
Would
you be so kind as to advise me of anything that can be done or who to contact
to get House Bill 120 changed? Thank
you for your input.
Sincerely,
XXXXX
XXXXX
RE:
Advisory Opinion - Sales tax exemption under House Bill 120
Dear
XXXXX,
We
have received your letter regarding House Bill 120 which was passed by the
state legislature in 1995. House Bill
120 amended sections in the Tax Code and created an exemption for purchases of
vehicles operated over public highways pursuant to IFTA and IRP agreements.
IFTA imposes minimum weight requirements, and those requirements, in turn, are
relevant to the administration of the exemption.
The
legislature has extended the exemption only to vehicles which are operated
pursuant to IRP and IFTA agreements.
IFTA applies only to vehicles with a gross weight of more than 26,000
pounds. Therefore, smaller trucks are
not operated pursuant to IFTA, and the exemption does not apply.
We
understand your argument that the exemption could have been designed
differently, but we have no authority to rewrite the legislature's
statutes. You may wish to approach the
legislature with an amendment. If you
need our advice or assistance in that regard, please let us know.
For
the Commission,
Alice
Shearer
Commissioner