Motor Fuels Tax Minute, Episode 14

Updates in the oil spill tax constitutionality case are the topics for this week’s Motor Fuels Tax Minute. Join our hosts for an overview of the new updates from congress, and an introduction from new Senior Manager, Kelly Grace.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 14

00:00:00

Leanne: Welcome to Weaver’s Motor Fuels Tax Minute, where we talk all things motor fuels. This week we wanted to take a moment to introduce the newest member of our team, Kelly Grace, who recently joined us as a senior manager. Before Kelly introduces herself, we have a couple of recent updates.

Firstly, for those of you who have been following the oil spill tax constitutionality case relating to whether or not the federal oil spill tax is constitutional when applied to exports of crude oil, the government recently sent a letter to Congress indicating that it would not ask the Supreme Court to review the decision of this Fifth Circuit Court of Appeals. What this means is that, at least for now, that decision stands. The decision was in favor of Trafigura, the plaintiff in the case, and said that it is, in fact, unconstitutional to apply the oil spill tax to exports from the United States.

We reached out to the IRS for some guidance on when they’ll be issuing refunds to those who have filed protective claims and to confirm that there won’t be any penalties for taxpayers who don’t remit oil spill tax going forward. We didn’t receive a lot of guidance, we were told something is expected within the next month and if we don’t hear anything to follow up then, so we’ll be keeping an eye out.

Emilda, I think there is maybe an update on the transmix we were talking about last time.

00:01:19

Emilda: That’s correct, Leanne. To briefly introduce the transmix update, we had a question regarding transmix containing gasoline that was currently listed in publication 510 under the gasoline blendstocks, and it’s also updated in Section 48.4081 Treasury Regulation and it’s not an error.  The IRS came back and said that’s not an error, it is correct. The interesting point about that is that there was a notice back in 2005, 2005-4, that stated diesel fuel or anything that was including a transmix defined under 4083, effective January 2025, was going to be amended and removed. It was removed, but it is back and we’re still not comfortable with that and we are still waiting to see if the IRS will provide additional guidance on that.

With that update, I’d like to briefly introduce Kelly Grace and we’re very excited to have her here at Weaver. Kelly, I’ll turn it over to you.

00:02:27

Kelly Grace: Thank you so much for the warm welcome. I’m coming to Weaver with over ten years of experience in fuels tax and just about two years of experience in vape tax. My background and my education helps me be able to assist you with either compliance or consulting. I’m very excited to be joining the Weaver team, and I look forward to assisting Leanne and Emilda with future motor fuels tax updates.