What the Governor said to Scott Heidepreim…. on Ethanol

Maybe it’s just the way my monitor is set, PP but when I try to read your scans they are just huge on the screen. Too big to read. Seems like you could scan them at about half the resolution you’re using. Anyone else having that experience? Is it just a Mac thing?

Pat, sometimes when you post documents it really seems to slow down your site.

If you read all of my posts on this, this is pretty much my version. And, throughout I asked someone to cite the letter of the law that it was otherwise. It has never been done.

The Legislature should have dealt with this, their lighting a fire and making this a controversy is not kosher. You’d think a lawyer could read the law books and understand them.

And printing it out is of no use.

Other than sliding your scroll bar at the bottom of the page back and forth, how’d you view it, Troy?

TG (not Bill Fleming ): I just opened it, shrunk it down to a size that I could read and went to the next page. Awkward but workable.

You’ve really sinned this time, BF.

Sibby’s using your name in vane.

Thanks, Troy, I’m computer challenged.

My 486 went to kindergarten w/ McCain.

the law consistently refers to the excise tax in regard to fuels at the terminal or rack. and that is where and when the tax has traditionally been remitted.

the law says that the “fuel excise tax imposed … shall be remitted to the state by the supplier … immediately before it is removed from a terminal in this state at the rack or used at the terminal.” or, in the case of blending, it is to be remitted by the blender. (all this is in 10-47B.)

i claim that because collecting taxes at the point of sale to the consumer, and remitting them after that point, is something new.

furthermore, if the blended fuel is, indeed, a totally new product, then such a product is not contemplated in the law.

though i do admit that the law does seem to say that fuel blended by a licensed blender blending the fuel for “resale to other blenders” is to be taxed at $.20, it doesn’t seem to address the situation where a fuel is blended at the pump by the consumer.

i know the law says that ethanol blends are to be taxed at $.20, but the “blender” definition does not include joe citizen pumping the gas at the local pump n pak. the law only contemplates blends blended by a blender. (say that 10 times, fast.)

the law makes an exception for the requirement of being a “licensed blender” when in 10-47B-3 it says that “A person need not be a blender to mix two or more substances which have previously been subject to the fuel excise tax imposed by this chapter ….”

i find it noteworthy that it says “previously been subject to the fuel excise tax.”

e30, or whatever blend made at the pump, is not an actual product that is traded or sold from the terminal. it’s a mere mixture of two different products, which were already previously subject to tax at certain rates.

confusing. and i can see, troy, why you’d make such an argument. but when the law is so confusing and unclear, one would hope that a republican governor would err on the side of the taxpayer.

Social Security is remitted by the employer even though 50% of the tax is the obligation of the employee.

Federal Income Payroll Taxes are remitted by the employer even though 100% of the tax is the obligation of the employee.

Sales taxes are remitted by the retailer even though 100% of the tax is the obligation of the consumer.

Have you read the federal tax code? You think that is not confusing. But, confusing or not, one is obligated to pay what is required by law.

You keep bringing up the mixing by the consumer. It is irrelevant. What a person does after purchase of a blend is there perogative and does not trigger another tax (that would be double taxation). But when one buys a blend, it is to be taxed at the proper level and collected.

Lex, there was a better solution and Kinsman proposed something to the legislature and expressed a willingness to implement another solution proposed and passed by the legislature. Listen to the previous post I did that included the an audio of the debate. The primary deriliction of duty (if the legislature wanted a different solution) was to pass something. Kinsman gave them fair warning on what the law was.

LEXREX is 100% correct on this one. SDCL 10-47B-5 calls for taxing fuel at the pipeline terminal at the tax rate called for in SDCL 10-47B-4. SDCL 10-47B-3(2) specifically allows for persons who are not licensed blenders to blend fuel that has “previously been subject to the fuel excise tax.” Whatever happens to fuel after it leaves the terminal, the tax calculated at the terminal - or “rack” remains the same. That is the amount that is passed on to the consumer under SDCL 10-47B-42.

Troy Jones’ reference to social security, payroll tax, and sales tax are an attempt at misdirection. Those federal taxes have absolutely nothing to do with how SD taxes fuel - which is governed by SDCL chapter 10-47B.

Dead-on, lexrex, with one exception. As you know, we’re not dealing with a Republican governor. More of a Repportunist.

Troy,

Your 10:03 post mentioned double taxation. This State continually double taxes business and such. If I own a service company, say a house cleaning business for example, I pay sales tax on the products that I purchase for said business. I then pay a sales tax when I use those products to provide the service. Taxed twice for the same thing. I don’t see why everyone is so shocked that the governor would try and apply the same principle to the fuel industry. The legislature has known about this “loophole” in the tax code for years and some have even chuckled about how the citizens don’t understand that they are being taxed twice for the same thing. If they wouldn’t fix it before, why try and fix it now?

Impeach Rounds. His story on this issue changes every time he addresses it. This is a tax on top of a tax. This is a tax forced by the governor who has no legal authority to invent new taxes. The fact he tried at the last moment in the legislature to get his double tax on ethanol passed and failed further strengthens the case against his statements.

Now he is trying to save face with a bunch of bunk to hide the truth. Rounds is a liberal tax and spender masquerading as a conservative. He is a liberal who deceives people with his smooth talk.

It just dawned on me that John McCain was a prisoner of war longer than the Iraq war has gone on.

This back & forth could last forever. The reality is that both “sides” have a case. The tax chapter gives credence to both interpretations. But maybe more important than the tax chapter is the Constitutional issue of uniform taxation. Administratively tax us at the blender pump and it’s .20. Drive up to two separate pumps and it’s something less than .20. The gov said that’ “ok?” That’s not uniform. Which means it’s not Constitutional.

Other than that, he’s picked a fight with the ag industry, his former chief of staff and the entire legislature.

Legally weak. Politically stupid. That’s the best summation.

good point, 8:25. never thought of that one.

8:25 is a pretty good summation, but the governor really doesn’t have a viable legal case. The law is against him. His legal interpretation is unlikely to prevail in any court in the state, and if he has what he says he has he wouldn’t have gone to the legislature to change it. Politically he is doing his best to convert his friends into enemies. Why?

12:23
I stand by the legal ambiguity in the chapter. There are some things that lean in each direction. But, among other things, the Constitution is clear. If this goes to court the gov loses. I do agree with that.

You raise a more interesting point. Why would he pick a fight with the #1 industry in this state? Why would he pick a fight with Rob Skjonsberg who carried his behind for an entire administration? Between these things, the HP and veterans issues it seems like gov mike has lost whatever political sense he had.

Good question. What gives and why now? There’s a deeper issue here.

Our accidental governor has been picking fights with the ag community for years. Remember his brand board fiasco, the hunting lockout that came about because of his support of the Open Fields Doctrine, his support of NAIS, and his support for DM&E at the expense of property rights? And these are only some of issues that made Rounds a pariah in agriculture. And now he’s trying to increase the taxes we have to pay for fuel after the legislature refused to. We have long wondered what gives with our governor.

Good point. He’s just moving west to east and gaining enemies at greater frequency.