A gas refund? That could be happening to you if you recent filled up in the nation's capital, according to a report from the
Washington Post earlier this month.
According to a news story, the D.C. Office of Tax and Revenue acknowledged Monday that it erred last month in ordering gasoline wholesalers to begin implementing a new wholesale price of gasoline to replace the current per-gallon tax on Oct. 1, overcharging them as much as $95,000 during the first week of the month because of a calculation mistake.
In instructions issued to the wholesalers, the tax office said that they should refund the amount overcharged to service stations and ask the service stations to refund it to motorists. Typically, wholesalers pass on the cost of taxes to retailers, who in turn pass it on to consumers.
The mistake occurred as the District transitioned from a 23.5-cents-per-gallon gasoline tax to an 8 percent tax on the wholesale price of gasoline. The change was pushed by D.C. Council Chairman Phil Mendelson (D), who argued that the new formula — also recently adopted by Maryland and Virginia — would slow the loss of gas-tax revenue as cars become more fuel-efficient.
The change was supposed to be “revenue neutral,” meaning it wouldn’t immediately increase the 23.5-cent-per-gallon tax.
But instead of calculating the new 8 percent tax on the wholesale price of gasoline, the Office of Tax and Revenue mistakenly calculated it on the retail price of gas, which included the existing District tax as well as federal taxes. Because of that error, wholesalers were charged a tax of 28.8 cents per gallon, a 23 percent increase over the intended rate.
“It was a mistake,” said Stephen M. Cordi, deputy chief financial officer for the Office of Tax and Revenue. “Somebody moved too quickly .?.?. what should have happened, had we used the right index, it would have been no change.”
Asked if anyone on his staff had been disciplined for the error, Cordi said the mistake was under review.
Cordi was reluctant to say that motorists had ended up paying too much.