NATSO Says Duty-free Fuel Cripples Roadbuilding Fund

A duty-free fuel stop at the Michigan/Canada border has drained $2.7 million to $3.7 million dollars from the federal roadbuilding fund, according to NATSO, an association representing U.S. travel plazas and truckstops.

Ammex Inc. has waged a lengthy legal battle challenging a U.S. Customs Service rule that duty-free shops can’t sell tax-free diesel or gasoline. Customs had told Ammex that it would have to stop selling tax-free fuel by late January, but a federal judge granted a temporary restraining order Jan. 23, blocking the Customs order and allowing Ammex to keep undercutting local competitors by as much as 15 cents per gallon.

NATSO claims that the duty-free fuel stop, located on the Michigan side of Detroit’s Ambassador Bridge, has forced a nearby truckstop to close and left other businesses in trouble. The association also says that the sale of fuel without collecting the federal fuel tax is draining millions from U.S. highway funds.

“At a time when the demands of our nation’s highways are significant, it is outrageous that this one business has been able to deprive the highway trust fund of such significant revenues,” said W. Dewey Clower, president and CEO of NATSO. “Congress must act now to close this unintended loophole.”

Clower also warned that Ammex’s ambitious growth plans at the Ambassador Bridge location, and plans by duty-free entrepreneurs at other border crossings, pose a serious threat to traditional fuel retailers who must collect and remit federal taxes.

“Since this loophole was created, the duty-free shop has been selling fuel at its location cheaper than our members can obtain it at the terminal rack. It doesn’t take a genius to understand that our members cannot stay in business for long under such a scenario,” he said.

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