Partial tax exemption on sale of marine fuels reinstated in California

The California Governor Gray Davis signed on 9 October 2003 Senate Bill (SB) 808, which reinstates the partial tax exemption on the sale of marine fuels. The exemption will be extended until 1 January 2014.

Since the expiry of the previous exemption on 1 January 2003, which resulted from a veto by the same Governor, bunker fuel sales in California have dropped significantly. The Bill, which was sponsored by the Inland Boatmen’s Union and supported by a broad coalition of the maritime industry including AWO, labour, business, chambers and cities, was the only tax exemption Bill passed in this year’s legislative session, when the California State faced a deficit of as much as $38 billion.

INTERTANKO, on behalf of the international shipping community, has sent a letter to the California Governor expressing support for his decision to reconsider his veto. This has led to reinstatement of this partial tax exemption.

The date of effective application of the SB 808 will be decided soon by the California State Board of Equalization (BOE). The worst case scenario is 1 April 2004 but BOE, which supported the bill, will probably implement the exemption more quickly.

Contact: Dragos Rauta