HEA 1002 may mean new inventory tax

Posted on: July 18th, 2017 by [email protected] No Comments

During this year’s legislative session, Indiana’s General Assembly passed House Enrolled Act 1002-2017 (“HEA 1002”), which impacts your industry in a variety of ways. You may be subject to a new inventory tax created by HEA 1002. The new inventory tax is imposed on all persons and 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. 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.

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