AUGUSTA, Maine -- The Maine legislature is considering a bill that would exempt kerosene sold at convenience stores or gas stations from the 5% sales tax to help people filling up five-gallon cans to keep heaters going in their homes, according to a report by The Village Soup.
"Many of our constituents can't afford to keep their tanks full and, on occasion, are forced to go to the store to get a few gallons of K-1 to keep from running out," State Representative Douglas Thomas (R), who is sponsoring the legislation, told the newspaper. "People who can afford it the least are paying an unwarranted [image-nocss] sales tax."
While kerosene or any fuel oil used to heat a home is supposed to be exempt from the sales tax, the Maine Revenue Service has been asking customers to fill out a signed affidavit that what they are purchasing is for home use. Fuel used to heat a business is taxable, the report said.
C-store owners testified before the taxation committee that signing an affidavit for the revenue service scared off a lot of people and some stores did not want to do the paperwork, so many customers ended up being charged the sales tax anyway.
"For every five gallons, that's another buck a can," said Dana Lampron of PitStop Fuels. He charges the tax on all kerosene rather than keeping affidavits, which he said customers did not want to fill out and he did not want to keep. "99%of what I sell from my pumps goes for the intended use. You guys should try to help people out there who are absolutely broke and on their back," he told members of the committee last week.
Stores that use the affidavit system are liable to a revenue service audit and have to pay the difference if the gallons are not accounted for properly, said the report.
"We've had to put on extra employees," said Russ Cloutier of CN Brown, whose company's stores do ask customers to fill out the affidavits and then have to do the accounting work to justify those gallons sold without a sales tax.
That 5% tax at this week's average price for kerosene$3.63 a gallonadds 91 cents per five-gallon can, the report said.
The Maine Revenue Service has weighed in favorably on the bill, saying the loss of revenue would be minimal.
State Rep. Thomas Watson (D) congratulated Thomas for proposing what he called "common sense" legislation.
The committee is scheduled to vote today on whether to recommend the bill to the full legislature.
Jamie Py of the Maine Oil Dealers Association, which backs the bill, said the fact the sales tax has come up as an issue is a sign of the times. "If you're coming in to get five gallons of fuel, you're in dire straits to begin with," Py said, but more and more people are using the kerosene pumps at gas stations because they can't afford a full tank. "There's been an uptick in people getting kerosene from the pump and even heating oil from a pump because people are just trying to get by and they don't have the money for a $300 to $400 delivery," Py said, according to the Village Soup.
Oil dealers would like to make deliveries, at minimum, of 100 gallons because of the costs associated with making the runs, but Py said the attorney general has ruled the drivers should go out for anything above 20 gallons. They can, however, charge a $5 surcharge. For emergency deliveries, when the tank has run out on weekends or nights, the dealers may add a $75 to $100 surcharge, said the report.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.