MADISON – The non-partisan Legislative Council staff has warned lawmakers that it is likely unconstitutional to prohibit oil companies from asking consumers to pay for an oil company gross receipts tax. “Clearly, this legal opinion demonstrates that consumers will pay the price at the pump,” said James A. Buchen, vice president of government relations for Wisconsin Manufacturers & Commerce. “That means this will be a gas tax that automatically goes up without legislative review.” Non-partisan Legislative Council staff Attorney Bill Ford warned Assembly Speaker Mike Huebsch (R-Onalaska) in a legal analysis: - “Because the provisions of the anti-pass through provision in SECTION 2496 of 2007 Senate Bill 40 and the New York anti-pass through provision struck down in Shell Oil are similar, it appears that the anti-pass through provision in Senate Bill 40 raises the legal issue of whether it violates the Commerce Clause of the U.S. Constitution.”
Governor Jim Doyle has proposed a 2.5 percent gross receipts tax on oil companies. Doyle has proposed prohibiting the tax from being passed on to consumers, and his budget proposes criminal penalties if the costs are shifted to consumers. Doyle has proposed the tax as part of a $1.7 billion tax hike. “Consumers will bear the cost of this new tax and this legal opinion confirms that,” Buchen said. “The no-pass-through proposal is clearly unconstitutional.” A new analysis by WMC has found that the gross receipts tax will drive up the tax on gasoline sold in Wisconsin by 7 cents per gallon. Wisconsin will have the third highest state gas tax in the nation if the tax is approved by the Legislature. “We all want great roads and we want Wisconsin to be a great state for our families and for employers,” Buchen said. “But, we don’t need to increase the gas tax by 7 cents a gallon to make Wisconsin great. We need to hold the line on taxes and spending.” -- 30 -- FOR FURTHER INFORMATION CONTACT:
James A. Buchen, (608) 258-3400
Posted: May 24, 2007
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