House Enrolled Act 1002-2017

Legislative Changes for Inventory Tax due to House Enrolled Act 1002-2017 --House Enrolled Act 1002-2017 ("HEA 1002"), may make you subject to a new inventory tax.

The new inventory tax applies to anyone entities having title to any motor fuel in storage and held for sale to a motor carrier in the carrier's operations on highways in Indiana. This includes fuel that has been purchased by a motor carrier and is held in a storage tank for sale to another carrier, including owner-operators. Any such person or entity having title to motor fuel held for sale to carriers must determine the amount of motor fuel held in its inventory when an increase in the surcharge tax rate occurs. The quantity of motor fuel determined to be held in inventory as of the close of business on June 30 is then multiplied by the current inventory tax rate to determine the amount of inventory tax owed. Based on HEA 1002, this year's inventory tax rate is $0.21 per gallon. Once the amount of inventory tax owed is determined, the inventory tax must be remitted by July 31 along with a completed Form IVT-1. The IVT-1 will be published and available on the Department's website on or before July 1.

Going forward, the motor carrier surcharge tax rate may increase up to $0.01 per year through 2024. Any subsequent increase in the motor carrier surcharge tax rate would result in an additional inventory tax on motor fuel held in inventory. The amount of any additional inventory tax would be equal to the new (increased) surcharge tax rate as of July 1 minus the previous surcharge tax rate multiplied by the amount of fuel in storage held for sale to carriers as of the close of business on June 30. The inventory tax must be remitted by July 31 following the increase along with a completed Form IVT-1.

Legislative Changes for Registration Fees due to House Enrolled Act 1002-2017 -- In terms of vehicle registration, HEA 1002 modified the annual registration fees for trucks, tractors that are used with a semitrailer, and for hire buses with an effective date of July 1, 2017. HEA 1002 also repealed the $8.75 fee applicable to the annual renewal of semitrailers that are issued a permanent registration plate. Additionally, HEA 1002 created two new supplemental fees. The first fee is applicable to the registration of either hybrid or electric vehicles, and will be due and payable each year during the annual renewal of such vehicles. The second fee, the Transportation Infrastructure Improvement Fee, applies to a broader set of vehicles and will also be due and payable each year as part of the annual registration renewal process. Please note that the collection of these new supplemental fees will begin on January 1, 2018. Further, HEA 1002 enacted a series of changes to the motor carrier surcharge tax and the motor carrier fuel tax rates. With respect to the surcharge tax, motor carriers will still be responsible for a quarterly filing, but the surcharge tax for diesel and biodiesel fuel will be included in the price that a carrier pays for such fuel at the pump. Any surcharge tax that was not paid at the time of purchase on motor fuel (including gasoline and alternative fuels) consumed on an Indiana highway will still be entirely paid on a carrier’s quarterly return. Finally, HEA 1002 also created an inventory tax that is payable by individuals and entities that hold title to motor fuel that is held for sale to motor carriers in their operations on Indiana highways. The tax will be payable each July, with the rate being based on an increase in the motor carrier surcharge tax rate.