Green Bay Reporter

Rep. Mike Gallagher (R-WI) has rallied the entire Wisconsin congressional delegation in a bipartisan effort to urge Congressional leadership to address a tax anomaly that is negatively impacting the fuel supply in Wisconsin. In a letter addressed to Speaker Johnson, Minority Leader Jeffries, Majority Leader Schumer, and Minority Leader McConnell, the delegation highlights the need for legislation to rectify the situation.

The issue at hand originated from the closure of the Milwaukee-Green Bay segment of the West Shore pipeline back in 2016. This closure forced diesel fuel suppliers to transport fuel to Northeast Wisconsin by truck, resulting in unforeseen tax implications. Normally tax-exempt fuel was being subjected to taxes due to the logistical requirements of truck transportation. While the IRS had previously granted a tax waiver to suppliers, this waiver was discontinued last year. The absence of this waiver has cost suppliers hundreds of thousands of dollars, contributed to fuel supply issues, and increased the cost of fuel for farmers, construction workers, and foresters who rely on dyed diesel fuel.

To illustrate the impact of this tax anomaly, the delegation shared a specific incident in their letter: "In the fall of 2022, non-contract dyed diesel sales were halted at the Green Bay regional terminal for several weeks because supply was not available without trucking in the fuel. To meet its contractual obligations, one supplier was forced to pay hundreds of thousands of dollars in fuel excise taxes that it did owe but should not have incurred."

Furthermore, as the winter months approach, barge shipments become impossible due to ice cover on Lake Michigan, exacerbating the urgency for a resolution to this unintended tax issue. The delegation emphasizes that passing H.R. 3524 or S. 1692, both of which are cosponsored by the entire Wisconsin congressional delegation, would provide much-needed relief to the fuel supply constraint faced by off-road diesel users in Wisconsin.

The letter concludes by urging Congressional leadership to include H.R. 3524 or S. 1692 in any forthcoming legislation that pertains to taxes or to seek passage under suspension of the rules or through a unanimous consent agreement. The delegation emphasizes that addressing this anomaly is crucial to ensure a stable fuel supply for Wisconsin farmers, foresters, and other non-highway users.

This bipartisan effort led by Rep. Gallagher showcases the commitment of the Wisconsin congressional delegation to tackle a pressing issue that affects their constituents directly. With the support of the entire delegation, there is hope for a swift resolution to this tax anomaly and relief for the fuel supply in Wisconsin.

Click this link to access more information: https://gallagher.house.gov/media/press-releases/gallagher-leads-wisconsin-delegation-call-fix-tax-anomaly-affecting-wisconsin