Change in Michigan legislation eliminates expensive administrative burden for Great Lakes commercial marine fuel users

(From left) State Representative Jason Wentworth, Michigan Governor Rick Snyder, Legislative Director Joseph Perry, Vice President of Marketing and Sales for Warner Petroleum, Jason Smith, and Warner Controller Stephen Sumpter.

When Michigan legislators enacted the Motor Fuel Tax Act in April 2000, the intention was to provide funding for road maintenance and improvements with a tax on motor vehicles that use the roadways. Because they operate on the waterways, all commercial marine fuel users are exempt from the 26.3-cent per gallon Michigan fuel tax and specification for the types of fuel commonly used by vessels were included in the original legislation. However, one type of marine fuel was omitted from the legislation back in 2000—fuel oil commonly known as Bunker C.

Without the new legislation, commercial marine fuel suppliers like Warner Petroleum would have been required to charge end-users who would then have been required to apply for a refund from the Michigan treasury. Now, with the signing of House Bill 5039, the onerous reimbursement process is replaced with an upfront exemption, which is typical of other states and provinces across the Great Lakes region.

“It didn’t make a lot of sense to require vessel operators to file paperwork for a refund of a tax that is reimbursed 100 percent of the time,” said Harry C. Warner, CEO of Warner Petroleum Corporation. “And it didn’t make much sense for the State of Michigan to devote staff to processing this paperwork either.”

“The omission of bunker fuel from the commercial marine fuel specifications was clearly an oversight by the legislature and we’re glad they’ve made the correction,” added Warner.

The bill was signed into law by Governor Rick Snyder March 20 and took immediate effect.

Maritime Editorial