Citizens of Utah... WAKE THE HELL UP!!

Have you bought motor oil at Wal-Mart lately? Have you been asked to bend over at the register, while the cashier scanned your Quaker State, Havoline, or Mobil oil purchase? Or, perhaps you were bent over by the cashier without noticing it? Look at your receipt! Here's the deal...

Title 40 (40-6-14) of the Utah Code establishes a "Fee on oil and gas", and it reads:

"(1) (a) There is levied a fee as provided in Subsection (1)(b) for oil and gas:

(i) produced; and
(ii) (A) saved;
(B) sold; or
(C) transported from the field in Utah where the oil or gas is produced.

(b) The fee imposed under this Subsection (1) is equal to the product of:

(i) .002; and

(ii) the value of the oil or gas determined in accordance with Section 59-5-103.1."

(2) (a) The State Tax Commission shall administer the collection of the fee, including any penalties and interest.
(b) The money collected shall be deposited in the Oil and Gas Conservation Account created in Section 40-6-14.5.
(c) Time periods for the State Tax Commission to allow a refund or assess the fee shall be determined in accordance with Section 59-5-114.
(3) (a) Each person having an ownership interest in oil or gas at the time of production shall be liable for a proportionate share of the fee equivalent to that person's ownership interest.

So, what does all that crap mean? It means that there is a "fee" imposed upon "Each person having an ownership interest in oil or gas at the time of production" equal to 2/10 of a penny. (Section 59-5-103.1 is simply the statutory authority establishing the Utah State sales tax, and explains how much and for what goods and service sales tax will be chaged.)

Nowhere in the statute does it charge this "fee" to the retail seller, nor does it allow the retail seller to pass the fee along to the end user. Further, according to the statute, the "fee" is only placed upon oil and gas that is produced; and saved; sold; or transported from the field in Utah where the oil or gas is produced. However, Wal-Mart (and possibly other retail sellers of oil in Utah) charges a 4¢ ($0.04) "oil use fee" on one quart of motor oil. If the sales unit is a U.S. quart, then the fee charged by Wal-Mart is 20 times what the State of Utah authorized. This raises four questions in my mind:

1. Was that quart of Quaker State motor oil produced; and saved, sold or transported from the field in Utah where the oil was produced?

2. Under what statutory authority does Wal-Mart collect the "oil use fee" from the end user (purchaser) when the fee is imposed upon - and supposedly paid by - the oil producer?

3. Why hasn't the State either (a) stopped this practice of passing the fee along to the customer, or (b) amended the Utah Code, Title 40, to permit the practice of passing the fee along to the customer, but at no more than the prescribed rate of .002 per unit.

4. Who's bending us over further, Wal-Mart with its illegal practice, or the State of Utah for permitting it to continue?

It's not just a few pennies we're talking about here. Well, okay, it is just a few pennies for each of us individually, but Wal-Mart is probably raking in several thousands of dollars per day in illicit profits. And, they're doing it 4¢ at a time in their Utah stores!

And, the State of Utah can call it a "fee" all they want... it's just another TAX... in fees clothing! Somebody has apparently determined that we have too much disposable-by-choice income left after paying bills and all the other taxes with which we've been burdened by your government...

I'm Gil (and you're not), and I approved this blog!