August 26, 2002

SUMMER RECESS ALMOST OVER; LITTLE ACTION IN D.C.

Congress is in its final week of the long August recess this week. Both last week and this, most Congressional staffers are on vacation. The same is true of the regulatory agencies and the Administration.

Action on the Energy Bill, which contains so many issues of importance to motor fuel marketers, has seemingly ground to a standstill during August, although there are some negotiations going on behind-the-scenes.

But next week, following the Labor Day vacation, we expect Washington to be back to “humming” with activity. Congress will be rushing to complete its heavy workload for the year. They hope to adjourn in time to go home to campaign sometime in early to mid October, although that now seems doubtful. Some are predicting a lame-duck session of Congress will be required – the current Congress coming back into session after the November elections, and before their successors are sworn into office in January.

CANOPY DEPRECIATION

SIGMA has been contacted by representatives of the Internal Revenue Service, asking for our involvement in efforts to resolve questions about the tax treatment of depreciation on canopies. This is an issue that has plagued the industry for some time. Although a tax court has held that most canopies can be depreciated over a 5-year period, IRS auditors generally disregard this ruling and insist that canopies be depreciated over the same period as other petroleum-related real estate improvements (generally 15 years).

This is part of IRS’s “Industry Issue Resolution Program”, which is currently undertaking to resolve seven issues affecting different industries. The canopy question was submitted to IRS by NACS, and was selected as one of the seven issues out of dozens submitted by various organizations and industries.

SIGMA will be participating in the IRS process, which will culminate in a meeting in DC the week of Sept. 23. It is the hope of IRS that all of the affected industry groups can come up with a unified position on the subject. SIGMA will be working with the other industry groups to see if this can be accomplished.

EPA MEETING SCHEDULED

SIGMA attorney Chet Thompson will participate in a meeting next week (Sept. 4) with the EPA Assistant Administrator for Solid Waste, Marianne Horinko. This is part of an ongoing series of meetings between EPA and industry groups designed to discuss issues of concern to small businesses. Horinko has jurisdiction over the Office of Underground Storage Tanks (OUST) and other programs that are of direct concern to marketers. Thompson is SIGMA’s specialist on UST issues, replacing Jeff Leiter in that capacity.