West Virginia Gasoline Tax

Charleston Gazette
July 26, 1923

Gasoline Tax Will Go Into Effect Today

Retail Price Will Jump to 26 Cents, as Result of Law Passed by legislature Imposing State Levy

Estimate $750,000 in Annual Receipts

Wholesalers are Required to File Monthly Report With Commissioner; Will Go Into Road Fund

The retail prices of gasoline will be 26 cents, beginning today. The additional two cents per gallon will be imposed as a state tax, in compliance with a law enacted by the legislature on April 27 and made ef[f]ective 90 days from its passage.

The tax will be collected by the state tax commissioner from the wholesaler, who will add the charge to his invoice to the retailer. The latter, in turn will collect from the consumer.

State officials estimated that 37,500,000 gallons of gasoline would be sold in West Virginia each year for the next two years. The tax on this quantity of motor fuel would be $750,000 each year.

The funds received from the tax on gasoline, together with the money from issuance of automobile license tags are expected to pay interest charges and create a fund sufficient to redeem the state road bonds authorized by an amendment to the constitution. The legislature has already authorized the governor to sell $30,000,000 of these bonds.

Monthly Return Required.

Under the gasoline tax law, of which Delegate John A. McLaughlin, of Pocahontas county was the author, wholesalers of gasoline are required to make monthly returns to the state tax commissioner. The first returns will be for the last six days of July. The wholesalers have until the last day of August to file the returns. They are given one month in which to pay the tax.

The law contains a provision which protects the interests of the state in cases where gasoline is purchased from points outside the state. An agreement has been reached by a number of wholesalers in Ohio, Kentucky and Pennsylvania to pay the tax themselves and they will be permitted to bring their gasoline trucks into this state and sell to retailers. The retailer who buys from the wholesaler outside the state will be held responsible for the payment to the tax commissioner.

Hall Gives Instructions

Grant P. Hall, state tax commissioner, has sent notices to refiners, wholesalers and persons who purchase gasoline outside the state and sell or use it within the state, advising them of the provisions of the law.

"Under the gasoline tax act passed April 27, 1923," the tax commissioner said in his letter, "persons required to file returns are (1) persons who refine gasoline in West Virginia, (2) refiners, wholesalers and jobbers who sell gasoline for re-sale or distribution, or furnish or supply gasoline for distribution within this state, whether to themselves or to others, and (3) persons who purchase or obtain gasoline outside West Virginia, and sell, distribute or use the same within West Virginia. These persons are required to file returns regardless of whether or not such returns show any tax due the state of West Virginia.

"The act is construed as imposing substantially a sales tax - a tax for the privilege to sell - on wholesilers [sic], the term wholesalers including persons who purchase or obtain gasoline outside of West Virginia. No deduction may be claimed by the wholesaler on account of gasoline sold the United States government. Gasoline used in West Virginia by refiners, wholesalers or jobbers in their own automobile tank wagons, or trucks, in the caryring [sic] on of their business, or otherwise, is not required to be reported, nor are retailers required to report gasoline on hand at the beginning of business July 26, 1923. - the operative date of the act.

Supplied with Forms

"Enclosed are two copies each of forms 501 and 502 for your use in the preparation and filing of return covering the six days from July 26 to July 31, 1923. This return is required to be filed not later than August 31, 1923. Blanks in duplicate are sent in order that copies of reports may be retained in your files.

"Form 502 is to be used only by (1) persons claiming refund of tax paid on account of gasoline sold and shipped or transported outside West Virginia on which the tax was assumed or paid by the person from whom the gasoline was purchased, and (2) by persons dealing in both gasoline on which the tax was assumed or paid by the person from whom purchased and gasoline on which the tax was not so assumed or paid, who claim deduction in form G. T. 501, schedule 1, item 5, of gasoline sold on which the tax was assumed or paid by the person from whom purchased. This return will be required of persons who deal only in gasoline on which the tax is assumed of paid by the seller for a sufficient length of time to account for the stock of gasoline on hand at the beginning of business July 26, 1923. If form 502 in inapplicable to your business, it should be disregarded.

Inventory is Necessary

"It should be noted that an inventory of gasoline on hand at the beginning of business, July 26, 1923 is necessary in the preparation of refund return in the case of persons who are entitled to refunds, or deductions on account of sales of gasoline on which the tax was assumed or paid by the person from whom purchased.

"Where one wholesaler sells to another, the first wholesaler will be required to report the gallonage sold and pay the tax thereon. Each subsequent seller at wholesale is required to report all sales, but may claim deduction on the gallonage sold on which the tax was assumed or paid by the person from whom purchased."

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