Response
October 30, 1998
REQUEST
LETTER
October 6,1998
RE: Request
for Advisory Opinion
Dear Ms. Hendrickson;
As we briefly discussed on the phone this evening, I
am seeking your advice regarding my company’s tax liability in the State of Utah. COMPANY , Inc. rnanufactures
aerosol and liquid fill automotive products at Our plant in Jacksonville
Florida. These formulated
products are packaged in aerosol cans or plastic
bottles that typically range in size from 4 oz to 32 oz. Examples of our products would be aerosol
Brake and Carburetor Cleaners, Leather and Vinyl Cleaners, Glass Cleaners, Fuel
System Additives, etc .COMPANY A has a
distribution center in CITY. Utah which
helps support the delivery of these goods to the West Coast. Essentially none
of these products are sold in the State of Utah.
COMPANY
recently began purchasing Mazda Motor Oil (32 oz. Bottles) as an
outsorced product from Mobil and had it delivered directly to the Utah
warehouse (see attached invoice). COMPANY B is charging COMPANY A a $0.16 per
gallon state recycling tax which raised the following
questions:
1. Is
this tax appropriate? If not, how can
COMPANY A seek a refund for the tax amount?
2. Does
the environmental assurance fee apply to any part if COMPANY A product line? If
so, would the tax apply to stock deliveries from our Jacksonville manufacturing
plant?
Please call meat (904)981-4148 if you need
additional information to answer these questions. My fax number is
(904)388-3065 and I look forward to receiving your
advice on these matters.
Sincerely,
NAME
October
30, 1998
NAME
COMPANY
RE: Advisory
Opinion Request Concerning Environmental Assurance Fee
Dear NAME,
We have
received your request for an advisory opinion concerning the application of
Utah’s oil recycling fee to your company’s purchase of motor oil in 32 ounce
bottles from a Utah seller (Mobil). You
also ask if the environmental assurance fee applies to products you ship into
the state from Florida. Let us address
these questions separately.
Oil
Recycling Fee. The oil recycling
fee is set forth under Utah Code Ann. 19-6-714, which imposes the fee on the
first sale in Utah of lubricating oil by a lubricating oil vendor. If your company’s purchase of the motor oil
represents its first sale in Utah, then Mobil is required to collect the fee
and remit to the state.
One
exception to the collection of this fee is for oil shipped out of the
state. You have had Mobil deliver this
oil to your distribution center in Utah.
Should your company subsequently ship these bottles of oil out of the
state, then it is entitled to a refund of the fee previously collected. You may remit Form TC-535 to request a
refund of those fees that were collected on oil shipped out of state. On any bottles that you subsequently sell in
Utah, you may not receive a refund of the fee.
Environmental
Assurance Fee. The environmental
assurance fee is set forth under Utah Code Ann. §19-6-410.5, which requires the
fee to be imposed on the first sale or use of petroleum products in the
state. However, the fee is one that
should ultimately be collected only in those instances when the petroleum product
is stored in a tank that is voluntarily part of the environmental assurance
program.
All
the products you ship into Utah appear to be already packaged and, we assume,
will not be stored in a tank subject to the program. If this is the case, then the fee does not need to be collected when
these products are sold in Utah.
Please
contact us if you have any other questions.
For
the Commission,
Joe
B. Pacheco, CPA
Commissioner
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