This is a legacy page. Please click here to view the latest version.
Mon 27 Feb 2012, 14:37 GMT

Bill seeks to make tax exemption permanent


New bill is aimed at avoiding problems related to the expiry of a partial sales tax exemption on the purchase of bunker fuel.



Senator Alan S. Lowenthal [pictured], a Democratic member of the California State Senate, introduced a bill on Thursday - SB 1243 - which seeks to make permanent a partial sales tax exemption on the purchase of marine fuel.

Like most products sold in California, marine fuel is subject to the state's sales tax - a tax that adds to the cost of marine fuel and encourages its purchase outside the state by ocean-going vessels. To make California marine sales competitive, the state currently offers a partial sales tax exemption on maritime fuel sales.

Under the exemption, the state does not tax fuel purchased in, but consumed outside of, California waters. SB 1243 would make the tax exemption permanent by eliminating the current expiration date of January 1, 2014.

The exemption, which has required renewals every five years, has expired on two previous occasions, once in 1992 and once in 2002. According to the state Legislative Analyst, the previous temporary expirations of the exemption caused marine fuel sales statewide to plummet nearly 50 percent. The past expirations also resulted in the loss of hundreds of high-paying blue-collar jobs related to the port industry.

“We've seen on two occasions that removing this sales tax exemption will cost our region jobs,” a statement released by Senator Lowenthal said.

"The tax also impacts the competitiveness of California ports. Fuel accounts for about 30 percent to 45 percent of the cost of operating a vessel in international commerce. The addition of the full sales tax on marine fuel can virtually eliminate a vessel’s operating profits and de-incentivize the purchase of marine fuel in California," the statement added.

“No other maritime port in the U.S. currently charges sales tax on marine fuel. This is about protecting California jobs and keeping California ports competitive,” said Senator Lowenthal.

In reviewing the bill, the Legislative Analyst’s Office also emphasized that SB 1243 is consistent with current state tax policy. SB 1243 must be in print for 31 days before it can be acted on by the Legislature.


Methanol bunker fuel delivery. World Fuel Services and West Coast Clean Fuels launch methanol bunkering across US ports  

First over-the-water methanol delivery completed in South Florida with Coast Guard-approved procedures.

Valerie Ahrens. Burando Energies appoints Valerie Ahrens as global head of methanol  

Ahrens brings more than 30 years of energy sector experience to the marine fuels supplier.

New Sea Generation (NSG) logo. New Sea Generation seeks junior bunker trader in Greece  

Greek bunker firm advertises role requiring commitment to demanding work schedule and operational responsibilities.

Person signing a document. IINO Lines secures sustainable shipping finance for methanol dual-fuel VLCC  

Japanese shipowner signs impact financing agreement with Mizuho Bank for alternative-fuel tanker.

Fluxys logo. Fluxys Belgium reports EUR74.9m profit as LNG flows surge and hydrogen infrastructure begins  

Belgian gas infrastructure operator’s 2025 net profit fell 8.8% amid hydrogen and CO₂ investments.

VPS logo. Shale oil components detected in Singapore marine fuel | VPS  

VPS testing identifies 90,000 mt of delivered VLSFO containing Estonian shale oil compounds.

Constantinos Capetanakis, Star Bulk. IBIA chair completes two-year term, citing expansion in regulatory engagement and membership  

Outgoing chair to remain on Global Board and lead Future Fuels and Bunker Buyers’ working groups.

Aerial view of a container vessel. LNG and methanol investments risk becoming 'dead ends' for shipping decarbonisation, UCL study finds  

Research warns transitional marine fuels may lock in fossil infrastructure rather than enabling an ammonia pathway.

Vitalii Protasov, GENA Solutions Oy. Protasov: Renewable fuel supply could meet shipping demand, but offtake agreements remain a barrier  

GENA Solutions CEO highlights project pipeline growth but warns regulatory uncertainty hampers investment decisions.

Frontier Venture vessel. Wah Kwong takes delivery of first LNG-ready LR2 tanker with Bureau Veritas SMART notation  

Frontier Venture is first in newbuild series to achieve Group 3 'augmented ship' capabilities.


↑  Back to Top


 Recommended