Fuels

Wanted: Tax-Dodging Barge

Helicopter employed to find rumored evaders

JACKSON, Miss. -- Authorities are taking seriously the possibility that fuel is secretly being brought into Mississippi by barge in a scheme to avoid paying state taxes, said the Associated Press.

Witnesses have said fuel was unloaded from a 3,000-ton tanker pulled close to shore in a remote area along the Mississippi River. The barge presumably would fill a tanker truck that would avoid tax collectors en route to a gas station, where the driver would sell his load and skip out on an estimated $1,400 in fuel tax.

The Mississippi [image-nocss] Department of Transportation is using a helicopter to help identify potential sites where such a fuel transfer could take place.

"I've been hearing about that barge for years, but we have yet to find it," said Jerry Wilkerson, executive director of the Mississippi Petroleum Marketers & Convenience Stores Association. "I'm not saying it doesn't exist, but if it does, it's very rare."

The state Department of Transportation, however, has received information that such smuggling is occurring and the agency has been using the helicopter for fuel tax evasion enforcement. Willie Huff, MDOT's enforcement director, said so far there has been no confirmation of such a scheme.

The agency bought the $530,000 helicopter last September and began flying it on surveillance routes in May.

Wilkerson supports fuel tax enforcement, saying members of his association buy gasoline that has been taxed at 18 cents per gallon. They do not want to do business with competitors who buy cheaper gasoline that has not been taxed; however, he has serious doubts about a scheme involving the fuel transfer on some remote Mississippi River shore. "Where has that ever happened? Frankly, I don't think it ever has," he said, adding that he has attended seminars in other states where officials have said they have been unable to confirm such smuggling.

Huff said the MDOT helicopter has identified 30 locations along the Mississippi River between Tunica and Greenville that are "suspicious spotsa rural road that goes to the river's edge." He said logging trucks could use the dirt roads to transport their cargo to barges. Such a practice would be legal, he said.

A barge can haul about 850,000 gallons of fuel, and the tax on such a load would be about $153,000. An 18-wheeler has an 8,000-gallon tank. Shippers are required to unload at terminals certified by the Internal Revenue Service.

Deputy State Tax Commissioner Alice Gorman said the state collected $289 million in taxes on gasoline last year and $119 million on diesel fuel, jet fuel and kerosene. She said fuel tax evasion is not widespread. Only four people in Mississippi currently are under indictment for the offense, she said.

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