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PA Bulletin, Doc. No. 97-1993



Rate of Oil Company Franchise Tax for 1998

[27 Pa.B. 6525]

   The Secretary of Revenue announces that for the calendar year 1998 there is no increase in the current rate of the oil company franchise tax which is determined to be 13.9¢ per gallon on all liquid fuels and 18.8¢ per gallon on all fuels used or sold and delivered by distributors within this Commonwealth under 75 Pa.C.S. §§ 9002 and 9004(b), definition of ''cents per gallon equivalent basis.''

   The rate of the oil company franchise tax imposed under Chapter 95 (Taxes for Highway Maintenance and Construction) of the Vehicle Code, 75 Pa.C.S. § 9502, and collected under Chapter 90 (Liquid Fuels and Fuels Tax), 75 Pa.C.S. § 9004(b), is determined annually by the Department of Revenue (Department) and announced by each December 15 for the following calendar year. The tax rate is determined on a ''cents per gallon equivalent basis,'' which is defined by 75 Pa.C.S. § 9002 as:

   The average wholesale price per gallon multiplied by the decimal equivalent of any tax imposed by section 9502 (relating to imposition of tax), the product of which is rounded to the next highest tenth of a cent per gallon. The rate of tax shall be determined by the Department of Revenue on an annual basis beginning every January 1 and shall be published as a notice in the Pennsylvania Bulletin no later than the preceding December 15. In the event of a change in the rate of tax imposed by section 9502, the Department shall redetermine the rate of tax as of the effective date of such change and give notice as soon as possible.

   ''Average wholesale price'' as used above is defined as:

   The average wholesale price per gallon of all taxable liquid fuels and fuels, excluding the Federal excise tax and all liquid fuels taxes, as determined by the Department of Revenue for the 12-month period ending on the September 30 immediately prior to January 1 of the year for which the rate is to be set. In no case shall the average wholesale price be less than 90¢ nor more than $1.25 per gallon.

   For the 12-month period ending September 30, 1997 the Department has determined that the average wholesale price of liquid fuels and fuels was less than 90¢ per gallon; accordingly, an average wholesale price of 90¢ per gallon is used to determine the rate for 1998.

   The oil company franchise tax imposed under 75 Pa.C.S. § 9502 in terms of mills applicable to each gallon is:

Imposition Section Liquid Fuels Fuels
75 Pa.C.S. § 9502(a)(1)   60.0   60.0
75 Pa.C.S. § 9502(a)(2)   55.0   55.0
75 Pa.C.S. § 9502(a)(3)   38.5   38.5
75 Pa.C.S. § 9502(a)(4)   00.0   55.0
Total Mills per Gallon: 153.5 208.5
Decimal Equivalent: .1535 .2085
Multiply by Average
   Wholesale Price:
x 90 cents x 90 cents
Product: 13.815 cents 18.765 cents
Oil Company Franchise
   Tax per Gallon
   (Rounded Up to
   Next Highest Tenth):
13.9 cents 18.8 cents

   Act 3 of 1997 provides that the oil company franchise tax as computed above is collected at the same time as the liquid fuels and fuels tax of 12¢ per gallon; therefore, effective January 1, 1998 the combined rate of tax for liquid fuels (primarily gasoline) is 25.9¢ per gallon and for fuels (primarily diesel fuel) is 30.8¢ per gallon.


[Pa.B. Doc. No. 97-1993. Filed for public inspection December 12, 1997, 9:00 a.m.]

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