Part 3.  Tax and Liability.

105-449.80.  Tax rate.

(a)        Rate. - The motor fuel excise tax rate is a flat rate of seventeen and one-half cents (17 1/2)a gallon plus a variable wholesale component.  The variable wholesale component is either three and one-half cents (3 1/2) a gallon or seven percent (7%) of the average wholesale price of motor fuel for the applicable base period, whichever is greater.

The two base periods are six-month periods; one ends on September 30 and one ends on March 31.  The Secretary must set the tax rate twice a year based on the wholesale price for each base period.  A tax rate set by the Secretary using information for the base period that ends on September 30 applies to the six-month period that begins the following January 1.  A tax rate set by the Secretary using information for the base period that ends on March 31 applies to the six-month period that begins the following July 1.

(b)        Wholesale Price. - The Secretary must determine the average wholesale price of motor fuel for each base period.  To do this, the Secretary must use information on refiner and gas plant operator sales prices of finished motor gasoline and No. 2 diesel fuel for resale, published by the United States Department of Energy in the "Monthly Energy Review", or equivalent data.

The Secretary must compute the average sales price of finished motor gasoline for the base period, compute the average sales price for No. 2 diesel fuel for the base period, and then compute a weighted average of the results of the first two computations based on the proportion of tax collected on each under this Article for the base period.  The Secretary must then convert the weighted average price to a cents-per-gallon rate and round the rate to the nearest one-tenth of a cent (1/10). If the converted cents-per-gallon rate is exactly between two-tenths of a cent (2/10) the Secretary must round the rate up to the higher of the two.

(c)        Notification. - The Secretary must notify affected taxpayers of the tax rate to be in effect for each six-month period beginning January 1 and July 1. (1995, c. 390, s. 3.)