Sisters stations pay up on gas taxes

Sisters gas stations are paying up on the city's new gas tax - but the fight over the tax may not be over.

On June 4, Judge Alta Brady ruled that Sisters gas stations owed the City of Sisters the three-cents-per-gallon gas tax for the period of April 9-30. By the May 25 due date only two stations in Sisters had paid their bill - both Shell stations.

They sent in payments of approximately $1,100 and $1,200 to the City of Sisters.

The four other stations, prior to Judge Brady's ruling, were advised by the Oregon Petroleum Association's attorney, Paul Romain, not to pay the tax until a ruling was made.

"I have told them (the local fuel dealers) not to pay it," Romain told The Nugget on May 21.

The four stations that had not paid on the May 25 due date accrued penalties for nonpayment.

"If dealers do not pay, the penalty is 1 percent of the tax and increases to 10 percent if payment is not received by the end of the month in which payment is due," said Eileen Stein, Sisters city manager. Since the ruling was handed down on June 4, all six dealers have now paid their gas taxes.

The Sisters City Council passed an ordinance creating the gas tax back on August 13, 2009 as a means of generating funds to maintain and improve city streets. This was prior to a statewide moratorium on local gas taxes scheduled to take effect after September 28, 2009.

For the fiscal year 2010/2011 which starts July 1, 2010 the council budgeted $126,000 in gas tax revenue for city streets.

The Oregon Petroleum Association (OPA) took issue with the ordinance passed in August, immediately circulating a petition on behalf of the local gas station owners, getting the issue on the March 2010 ballot as a referendum.

OPA's position was that the council's ordinance passed back in August should not be enacted until the people voted on it. And, with a vote not scheduled until March 2010, the ordinance would not be valid because it would be after the moratorium date for new local gas taxes.

In the March 2010 ballot, Sisters voters approved the gas tax, paving the way for the city to set the payment schedule.

The OPA has the right to appeal Judge Brady's ruling and plans to meet with station owners to discuss a possible appeal.

"We are meeting next week regarding an appeal," said Romain. "I believe that the dealers are paying the tax and will get a refund of the tax if they appeal and are successful."