COLUMBUS, Ohio -- Despite the budget crisis at the Statehouse, oil companies are working to avoid paying taxes on the practice of swapping gasoline.
This is the practice of trading gas in one city with a competing oil company in exchange for gas in another city.
The oil companies say the swaps are straight exchanges without money changing hands.
But the State Department of Taxation says gas swapping is like bartering and oil companies should be taxed. They say giving up the tax in the future could cost the state $20 million in revenue.
"So what we have here is a proposal by one industry to get different treatment and to essentially lower their tax burden,” said John Kohlstrand, spokesperson for the Ohio Department of Taxation.
When asked if oil companies deserve a tax break in the current economy, Terry Fleming, executive director of the Ohio Petroleum Council said, “We’re not getting a tax break. It’s not a tax we’re paying currently because we don’t believe it’s subject to tax.”
Fleming disputes the $20 million figure as unfounded. The Department of Taxation acknowledges it is only an estimate.
As Fleming explains, many oil companies either do not perform the gas swaps or have not paid taxes on them in the past. If they are taxed, companies plan to stop swapping.
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