Senator Calls Gasoline Discount Unconstitutional

Jan 23, 2014

A bill introduced in the Senate is meant to repeal a section of code giving discounts to gasoline wholesalers.

Senator Herb Snyder is the lead sponsor of Senate Bill 421. He said in researching areas of state code dealing with gasoline prices, he found a section that essentially gives a rebate to oil and gas companies who own wholesale terminals, only one of which is located in West Virginia.

Senator Craig Blair used a map showing gasoline prices around the state to show the difference in prices both regionally and in surrounding states. The map shows prices at the highest in the Eastern Panhandle at $3.55 and the lowest in Huntington at $3.15 as of Jan. 21, 2014.
Credit Janet Kunicki

Snyder explained the state’s gas tax is collected from large oil companies who fill up tanker trucks at terminals. Those trucks then deliver the fuel to retailers at gas stations across the state.

“When those tankers pull into the gas station, that tax has already been paid and will be remitted to the state of West Virginia,” Snyder said.

Ultimately, the consumer pays both the state and federal tax at the pump, but it’s the same statute that offers big businesses a break.

“In that statute there’s a discount that the bigger oil companies that collect this tax get to keep three-quarters of 1 percent of that tax just for filling out the form and turning it in,” Snyder said.

That three-quarters of one percent adds up to a little less than $2.5 million in lost revenues for the state each year, coming directly out of the state Road Fund.

Senator Craig Blair is the bill’s co-sponsor and, in a floor speech Thursday, said this area of the code is favoring the industry.

“If that’s the case, then we need to start giving a tax credit or a percentage of it back to all the retailers out here and all the grocers and everybody else that collects the sales tax,” he told his fellow Senators. “We can’t be picking individuals.”

“I say, let’s get that off the books, get that $2.5 million and get it turned back into asphalt. There’s not one place in the state where we don’t need that.”

Snyder added he believes the section of code may also be unconstitutional.

He said the West Virginia Supreme Court of Appeals has ruled in the past the state Road Fund may only be used to build and maintain highways. By giving the money to gasoline wholesalers, he believes the state is violating that order.