Mon 27 Feb 2012 14:37

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.


The Buffalo 404 barge, owned by Buffalo Marine Service Inc., performing a bunker delivery. TFG Marine installs first ISO-certified mass flow meter on US Gulf bunker barge  

Installation marks expansion of company's digitalisation programme across global fleet.

Sogestran's fuel supply vessel, the Anatife, at the port of Belle-Île-en-Mer. Sogestran's HVO-powered tanker achieves 78% CO2 reduction on French island fuel runs  

Small tanker Anatife saves fuel while supplying Belle-Île and Île d'Yeu.

Crowley 1,400 TEU LNG-powered containership, Tiscapa. Crowley deploys LNG-powered boxship Tiscapa for Caribbean and Central American routes  

Vessel is the third in company's Avance Class fleet to enter service.

The inland LNG bunker vessel LNG London. LNG London completes 1,000 bunkering operations in Rotterdam and Antwerp  

Delivery vessel reaches milestone after five years of operations across ARA hub.

The M.V. COSCO Shipping Yangpu, China's first methanol dual-fuel containership. COSCO vessel completes maiden green methanol bunkering at Yangpu  

China's first methanol dual-fuel containership refuels with green methanol derived from urban waste.

Carsten Ladekjær, CEO of Glander International Bunkering. Glander International Bunkering reports stable performance amid regulatory changes  

Bunker trader achieves $3bn turnover and $22m pre-tax earnings for fiscal 2024-25.

Map of the Mediterranean Sea ULSFO demand surges in Med as ECA compliance drives fuel shift  

KPI OceanConnect reports accelerating ULSFO uptake across the region.

The Zale performing a bunker delivery. Monjasa reports Singapore as top bunker supply port with over 1 MMT delivered  

Supplier says world's largest bunkering hub became its biggest supply location in 2024.

Steel cutting ceremony for the 7,999 DWT chemical bunker tanker Lucia Cosulich at Taizhou Maple Leaf Shipbuilding Co., Ltd. in China. Fratelli Cosulich begins construction of second methanol-ready bunker tanker  

Italian firm starts steel cutting for 7,999 DWT chemical bunker vessel.

Petrobras logo. Petrobras introduces volume-based price discounts at Santos  

Brazilian oil company offers progressive discounts for bunker deliveries exceeding 1,500 tonnes.


↑  Back to Top


 Recommended