Kentucky to review marine fuel-tax policy

LOUISVILLE, Ky. – A Kentucky fuel tax that has cost recreational boaters millions of dollars through the years – money that is often then returned to the marinas that sold the gas – is under review by state officials, according to an Associated Press story published today.

While Kentucky levies a road tax on fuel to ensure that people who use highways pay for maintenance and improvements, the state refunds taxes paid on fuel used for off-road purposes. Although some users, like farmers or other businesses, can apply for refunds, boaters cannot. The marinas that sell the fuel collect the rebate instead, according to AP.

Virginia and several other states return the road-tax money collected on marine fuel to boaters, and at least 30, including Indiana, earmark part of the collections for improving boating facilities, wildlife activities or waterways, the Associated Press said.

Kentucky marina owners say they deserve to keep the money and need it to make boating more affordable by using the tax rebates to offset the cost of upkeep and liability insurance. Since 1998, Kentucky has returned about $4.75 million to 91 marinas, according to the story.

But Kentucky Department of Revenue Commissioner Mark Treesh told the Louisville Courier-Journal that he intends to review the rebate statute with his staff, the Associated Press said.

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