There are a lot of ways to describe 2017, but “uneventful” isn’t one of them. Fuel marketers were issued a temporary reprieve from automated fuel dispenser EMV conversions, and a proposal to repeal debit swipe fee reform was rejected. And the year ahead is looking quite lively as well.
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Here’s a recap of five key issues that could significantly impact convenience-store operators in 2018:
1. Maximizing tax reform
Congress passed a comprehensive tax reform bill at the end of 2017 that includes the corporate tax rate dropping from 35% to 21%. In addition, the tax legislation preserves an important provision for inherited property. The step-up in basis on property transferred during an estate settlement was retained. As a result, family members who inherit a business acquire the business at its value on the date of the original owner’s death. According to the Petroleum Marketers Association of America, if the step-up in basis had been repealed, the family members would have had to pay capital gains taxes on the original owner’s gains in the business.
2. Selling renewable fuels
The Renewable Volume Obligations (RVOs) for 2018 are nearly the same as 2017. The total renewable fuel volume for 2018 is 19.29 billion gallons. Conventional renewable fuels (corn-based ethanol) will account for 15 billion of those, while 4.29 billion gallons of advanced biofuel will make up the balance.
Although legislation to waive the fuel volatility standards for E15 failed to move forward in 2017, the EPA has said that it is reviewing its authority to issue a waiver to the provision that prevents the sale of E15 in summer.
3. Covering compliance costs
Funding cuts of $528 million have been proposed for fiscal 2018 for EPA programs. Reductions in the size and scope of the EPA could cause states to absorb costs that the EPA previously shouldered, and those costs could be passed onto business owners.
4. Meeting fuel economy standards
The deadline for the EPA to issue a proposal for updated Corporate Average Fuel Economy standards is April 1. The existing standards, for cars and light trucks for model years 2022-2025, call for increased reliance on electric vehicles (EVs). Critics suggest there is not enough demand for EVs for automakers to meet the gas-mileage rules. Some suggest that higher octane fuels could be a solution.
5. Paying for roads
Funding road repairs is expected to kick into high gear this year. The broad strokes of a $1.5 trillion plan were released Feb. 12. The plan calls for $200 billion in federal spending over the next 10 years. States and cities may be required to raise a significant share of infrastructure money to cover the costs of road repairs.
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This post is sponsored by Source North America