“The temporary administrative relief provided in the years following the permanent closure of the West Shore pipeline section between Milwaukee and Green Bay gave affected position holders time to renegotiate relevant contracts and adopt commercial solutions related to the transportation of fuel by boat to Green Bay or by truck or train from the Milwaukee and Madison terminals to the Green Bay terminals. and seek legislative solutions,” the IRS wrote. Under Section 4081 of the U.S. Tax Code, fuel is subject to tax as soon as it leaves the terminal. However, the tax applies only to customs-cleared fuel intended for road traffic. Dyed fuel intended for off-road use, such as construction or agriculture, is exempt from tax. West Shore is the only gasoline and diesel fuel pipeline serving northeastern Wisconsin, so the closure of the segment could lead to supply issues for the region. To avoid this, Wisconsin`s Republican governor at the time, Scott Walker, declared an energy emergency that allowed tanker truck drivers to work overtime to move fuel from the pipeline`s terminals in Milwaukee and Madison to Green Bay. The Wisconsin-based company was one of many seeking refunds for alternative fuel tax credits for blending gasoline with butane, a routine process that helps reduce emissions and helps engines run more easily in cold weather. The West Shore Pipe Line Co. decided that it was not financially advantageous to repair or replace the broken segment of the pipeline – the cost would have been passed on to consumers buying the fuel, which increased prices in the region – so the fuel has continued to be transported to Green Bay by truck and rail ever since. “The provision approved by the House Ways and Means Committee would eliminate the need for the IRS to grant temporary exemptions to any fuel supplier in America and would continue to ensure that this tax is not imposed on Wisconsin consumers,” she said. The IRS offers temporary tax breaks for a variety of unforeseen circumstances, such as natural disasters.
For example, it issued a notice Wednesday that provides for an expanded exemption from penalties for dyed fuel sold for road traffic due to a lack of undyed fuel caused by Hurricanes Ida and Nicholas. But permanent tax breaks must come from laws enacted by Congress. Existing laws and regulations allow U.S. Venture to receive refunds for taxes levied to remove clear fuel from terminals because they are identical and clearly duplicated. U.S. Venture, based in Appleton, Wisconsin, intervened as soon as the pipeline was closed to deliver fuel to the Green Bay terminal. The company also transports fuel from the Green Bay terminal to end users. Here are the incentives, laws, and regulations related to alternative fuels and advanced vehicles for Wisconsin. Your Clean Cities Coordinator at Wisconsin Clean Cities can inform you of grants and other opportunities. You can also access contact information for the coordinator and other organizations in the “Contact Addresses” section.
The problem occurs with colored fuel. All the fuel that U.S. Venture carries to Green Bay is clear, but it colors something at the Green Bay terminal to pay consumers for off-road use. Since the dyed fuel is exempt from tax, the U.S. company is not entitled to a refund for the portion of the clear fuel on which it paid taxes in Milwaukee and which it dyes in Green Bay. However, this tax would never have occurred if the West Shore pipeline had remained in operation. The IRS did not agree that butane blends were eligible for the loan, and Congress finally removed that option in December 2019. U. Venture has filed a $33 million lawsuit in previous claims that have so far failed. Prior to the closure of the pipeline section, U.S.
Venture was only taxed if it withdrew fuel from the Green Bay terminal. Now it is subject to a double tax on the removal of fuel from other terminals for transportation in Green Bay. In the sweeping tax package approved by the House Ways and Means Committee on Wednesday, a $4 million tax break is being sought by a Wisconsin fuel concessionaire with friends on both sides of the driveway. Johnson said that if U.S. Venture were to pay the tax on providing an alternative transportation solution if the pipeline collapsed, it would ultimately raise Wisconsin fuel prices “for no real reason.” Wisconsin lawmakers knew the IRS would not extend tax relief on dyed fuels to U.S. Long-term venture. When Gallagher wrote to the Treasury Department in November 2017 — this time with Wisconsin Rep. Glenn Grothman and Senator Ron Johnson, both Republicans, and Democratic Sen. Tammy Baldwin — asking for the first extension, he said “legislative efforts are currently underway” to find a permanent solution. U.S. Venture spokeswoman Mercedes Bereza said in a statement that the temporary waiver granted by the IRS to allow for the refund of the additional tax levied on fuel transported from the Milwaukee and Madison terminals to Green Bay had prevented Wisconsin consumers from having to pay for the pipeline disruption. The provision could be removed if the law is passed by both the House and Senate, but with the bipartisan support of all members of the Wisconsin delegation, that`s probably for sure.
The IRS acknowledged that the U.S. Venture mystery was never addressed under current tax law and granted the temporary relief by granting a refund for double taxation as of Oct. 31, 2017. The relief has been extended four times a year, but the IRS said in a notice of the latest extension, which expires in late 2021, that it would be the last. It was not immediately clear whether the U.S. company would be the sole beneficiary of the new tax break through Congress, although Gallagher`s letters only mention this company. The information in this list is updated annually after the end of the Wisconsin Legislature. Last update November 2021 The issue stems from the closure of the Milwaukee-Green Bay section of the West Shore pipeline in 2016 — which transports oil from northern Illinois to the most densely populated areas of Wisconsin — due to degradation. “It`s just a folly of our complex system that if you transport by pipeline — which they can`t do anymore and they`re not going to rebuild the pipeline — Wisconsin consumers will be affected by another tax,” he said. “So we`re just trying to make that what it used to be, regardless of the type of transportation.” Congress doesn`t often pass tax laws, even small adjustments, so there has been no vehicle for the legislative solution so far, as Democrats plan their own major tax reform, in part to fund billions of dollars in social program spending. Wisconsin Rep.
Gwen Moore, a Milwaukee Democrat who sits on the Tax Drafting Committee, introduced a stand-alone bill in August to find the permanent solution, and it was included in the reconciliation package approved Wednesday by the committee. This wouldn`t be the first time U.S. Venture has needed help from the IRS and Congress. However, on another recent occasion, they were unlucky. The Joint Committee on Taxation estimates that the provision, which appears on page 732 of the 881-page tax subtitle, would cost less than $500,000 per year over the next decade, which would ultimately amount to $4 million. Republicans passed sweeping tax reform a month later, but the provision to grant permanent relief was not included, although much of the bill was passed by then-President Paul D. Ryan, who is originally from Wisconsin, was developed. The attempt to incorporate the provision into reconciliation comes after Johnson and Baldwin introduced it as an amendment to the bipartisan Senate infrastructure bill, but it was not passed.
This is the kind of law that, at first glance, looks like a corporate gift to the taxpayer`s penny. But the provision is actually intended to provide permanent tax relief for an unintended consequence of the country`s complex tax legislation, which the IRS unilaterally corrected for four years. And while it was included in the Democrats` $3.5 trillion partisan reconciliation package, the tax break that benefits U.S. Venture Inc. has bipartisan support from the entire Wisconsin congressional delegation. Wisconsin Republican Rep. Mike Gallagher, who represents the Green Bay area, wrote to the Treasury Department in February 2017 to raise awareness of the issue and seek emergency assistance. .