House Bill 351 seeks to clarify the taxation process for gasoline and special fuels in Montana by establishing that taxes will be applied to the first licensed distributor who owns the fuel at the point of withdrawal from a terminal or refinery, or upon importation into the state. The bill revises several sections of the Montana Code Annotated (MCA), particularly focusing on definitions related to fuel distribution, such as the definition of "distributed," which now indicates that imported fuel is considered distributed once it arrives and is brought to rest in Montana. Additionally, the bill introduces new requirements for distributors, including licensing and security measures, and outlines specific tax rates for gasoline, special fuel, and aviation fuel.

Furthermore, the bill clarifies the application of taxes when fuel is withdrawn from a refinery or terminal, stating that it is considered distributed by the owner prior to withdrawal. It also specifies that imported fuel is taxed based on ownership at the time of unloading and restricts tax-free exchanges between licensed distributors. The legislation includes provisions for collecting taxes from vehicle owners when no Montana fuel tax has been paid and outlines conditions for the exemption of dyed special fuel from taxation. Notably, the bill amends existing language regarding the use of dyed special fuel and establishes a civil penalty structure for misuse, with fines increasing for repeat offenses. The act is set to take effect on July 1, 2026.

Statutes affected:
LC Text: 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_1(1): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_1(2): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_1(3): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_1(4): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_1(5): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_1: 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_X(1): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_X(2): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_X(3): 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441
HB0351_X: 15-70-401, 15-70-402, 15-70-403, 15-70-404, 15-70-441