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Committee backs bill to shift fuel tax point to first licensed distributor, MDT and industry support
Summary
House Transportation Committee passed HB351, which moves the point of gasoline and special-fuel taxation to the first licensed distributor after terminal withdrawal or import; sponsors and MDT said the change improves tracking and compliance without increasing the gas tax.
The House Transportation Committee approved House Bill 351 on a voice vote after testimony from the bill sponsor, Montana Department of Transportation (MDT) officials and industry stakeholders.
Sponsor Representative Courtney Sprunger told the committee the bill shifts the statutory point of taxation from the last licensed distributor in the chain to the first licensed distributor who possesses the fuel after withdrawal from a terminal or when imported into the state. "This is about process," Sprunger said, adding the change is intended to simplify reporting and enforcement and "has nothing to do with… increasing the gas tax." (Representative Courtney Sprunger)
MDT Director Chris Dorrington rose in support and introduced MDT staff available to answer technical questions. Deputy Director Larry Flynn told the committee the bill aligns statute with administrative practice and will reduce unnecessary reconciliation burden for MDT; he said the department currently tracks roughly 85,000 transaction line items annually tied to transfers and that the change would reduce opportunities for inadvertent error or intentional underreporting. "This just has to do with which distributor in the chain of buys and sells carries that tax burden," Flynn said, clarifying the measure is not intended to shift the ultimate tax burden to refineries.
Representatives of industry groups stood in support after interim stakeholder discussions. Brad Longcake, testifying for a convenience-store/marketers association, said most concerns had been addressed in the interim and that initial cash‑flow worries should normalize after the first year. Duane Williams of the Montana Trucking Association also voiced support, saying the trucking sector funds a significant share of road costs and favors measures that improve the efficiency of getting tax revenue to road programs.
Representative Staffman asked whether the bill would change state revenues; sponsor Sprunger and MDT staff answered that the bill does not change the amount of tax taken in but improves administrative efficiency. The committee passed HB351 on a voice vote and recorded proxies as noted in committee minutes.
The bill now goes to the House for further action; committee supporters asked the House to move the bill forward to reduce administrative burden and improve MDT's ability to manage federal matching and compliance.
