Wisconsin Fuel Tax Update

Oil Company Tax Update
The Hamilton Consulting Group

Updated June 1, 2009

2009 Budget Debate

Oil Company Tax Legal Analysis Documents:

WMCA/WATDA Release on Foley Memo (April 22, 2009)

Foley Legal Memo on Oil Company Tax – Executive Summary (April 21, 2009)

Foley Legal Memo on Oil Company Tax – Full Memo (April 21, 2009)

Transportation Funding Alternative and Related Legal Memos:

Transportation Funding Alternative Memo (March 25, 2009)

Lawton & Cates (Former AG Lautenschlager) Memo (Apr. 19, 2007)

Michael, Best and Friedrich Memo (May 30, 2007)

Wisconsin Legislative Council Memo to Speaker Huebsch (Feb. 26, 2007)

Related Press Releases and News Articles:

This tax must be magic (opinion): Kenosha News, June 1, 2009. State expects to tax oil companies but not their customers. But Doyle seems to think that since what he’s proposed is a tax on the gross receipts of fuel suppliers, not the fuel itself, it will be just the oil companies that pay, not the people who use gasoline.

Tax on big oil companies clears legislative budget committee: Janesville Gazette, June 1, 2009. The committee approved the 2.5 percent tax on oil sold in the state, with a provision prohibiting the tax from being passed along to consumers at the pump. Opponents have argued the tax is unconstitutional and will be tossed out in court.

Tax on big oil companies survives committee: Duluth News Tribune, May 30, 2009. Gov. Jim Doyle said Friday he was confident Wisconsin can tax big oil companies and stop them from passing the cost on to drivers at the pump, but critics fear it will tie the state up in court for years.

Road money uncertainty plagues industry: The Daily Reporter, May 29, 2009. The oil-franchise fee is on its way to the state Assembly with waning support from lawmakers and a road-building industry wondering how the state will pay for projects.

Legal fight expected after endorsement of proposed oil company tax: River Falls Journal, May 29, 2009. The New York Supreme Court struck down a similar tax in that state in 1983, saying it violated the U.S. Constitution’s Commerce Clause.

Oil tax hits harder as prices climb, co-ops say: Cooperative Network Press Release, May 7, 2009. If an oil tax proposed in the state budget bill had been in effect last year it would have added almost eight cents per gallon to the already-soaring price of gasoline and more than nine cents per gallon to the price of diesel fuel, according to a statewide cooperative business group.

Council opposes oil tax: Superior Telegram, May 5, 2009. Superior’s City Council is adding its voice to growing opposition on a proposal that would tax oil revenue. And it’s not alone, according to Council President Dan Olson, who joined Council Vice President Bob Finsland in presenting a resolution to oppose the proposed state tax.

State gas tax debated: Eau Claire Leader-Telegram, May 1, 2009. Critics of the plan say that efforts to ban suppliers from passing on the tax to consumers will not stand up in court.

Demand a guarantee for gas tax hike in Wisconsin (opinion): Wisconsin State Journal, Apr. 29, 2009. In the short term, lawmakers should combine spending cuts with a gasoline tax increase to come up with the $270 million that Doyle planned to raise with the oil tax.

Doyle says raising gas tax 'worthy of consideration': Milwaukee Journal Sentinel, Apr. 22, 2009. He also repeated comments made in December that the state probably should not have eliminated annual increases in the gas tax, even though he signed that change into law in 2005.

Doyle open to gas tax as alternative to oil company tax: Wisconsin State Journal, Apr. 20, 2009. Doyle wants to pay for roads by raising taxes on oil companies by $272 million over two years and then requiring the firms not to pass the tax on to consumers.

Doyle's oil tax plan would be a nightmare (opinion): Eau Claire Leader-Telegram, Apr. 21, 2009. The tax is a bad idea. It will be impossible to stop oil companies from passing the tax along, and it will have a negative impact on business development in the state.

Transportation money ideas running on empty: The Daily Reporter, Apr. 21, 2009. Replacing the state budget’s proposed oil-assessment fee with a 3-cent gas tax increase will do nothing to ease the political battles brewing over transportation project money, lawmakers said Tuesday.

Wisconsin Farm groups unite against oil tax: Midwest AGnet, April 21, 2009. Wisconsin Farmers Union, Wisconsin Farm Bureau Federation and Cooperative Network said the proposed oil tax threatens to take away millions of dollars in patronage-based payments now going to members of local non-profit farm supply co-ops.

Wake from the (oil) pipe dream (opinion): Racine Journal Times, Apr. 19, 2009. If the state simply refrained from using the fund which shouldn’t have been raided to begin with, we would not now be debating a tax of dubious effectiveness.

Save Wisconsin from oil tax nightmare (opinion): Wisconsin State Journal, Apr. 18, 2009. Gov. Doyle's plan to impose a special tax on oil companies has the word "backfire" written all over it. Lawmakers should remove it from the state budget.

Thinking long term (opinion): Milwaukee Journal Sentinel, Apr. 6, 2009. Trying to tax Big Oil won't work. A better bet to provide needed funding for roads is a small hike in the gas tax - for now - and then rethinking road financing entirely.

WI Petroleum Marketers & Convenience Store Assoc. New poll confirms majority of Wisconsin citizens oppose oil franchise tax. [Key findings of poll.]

One more open vein (opinion): Milwaukee Journal Sentinel, Apr. 4, 2009. The gas tax is running out of gas. So Gov. Jim Doyle has proposed, yet again, a sort of back-door gas tax called an "oil profits tax." [PDF]

I am not Big Oil: FoxPolitics.net, Apr. 2, 2009. Budget hearing.

Opponents of oil tax launch ads: Milwaukee Journal Sentinel, Mar. 31, 2009. A coalition of independent gas stations and convenience stores launched two 60-second radio spots this week critical of the suggested tax.

Oil company fee faces possible lawsuits: The Daily Reporter, Mar. 17, 2009. The specter of a prolonged legal battle looms over Gov. Jim Doyle’s proposed oil-franchise fee, threatening the more than $271 million the tax could generate for the state’s transportation system.

Oil tax would harm rural economy: Cooperative Network, March 2009. A gross receipts tax on motor fuel sales, part of Governor Doyle’s $63 billion state budget package, would likely eliminate distribution of cooperative patronage capital and harm grassroots economic reinvestment that could otherwise help revive our state’s battered economy.

Governor promotes budget in Superior: Superior Telegram, Feb. 19, 2009. Locally, officials worry the oil tax could put Murphy Oil in Superior -- the state’s only refinery -- at a competitive disadvantage in its own market.

Wis. Petroleum Marketers & Convenience Store Assoc. goes up to bat against proposed oil franchise tax, educating consumers and legislators on ramifications: WPMCA Press Release, Mar. 30, 2009.

Cooperatives on TV in opposition to ‘Big Oil’ Tax: Cooperative Network Press Release, Mar. 26, 2009.

Darling on oil assessment tax: Wisconsin Radio Network, Mar. 20, 2009. People aren't buying it.

2007-08 Budget

General Position Statements & Support Documents