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Bill would cut red tape to get Pike tax refund

Hundreds of thousands of Massachusetts Turnpike travelers can get a refund on part of the state gas tax they pay, but the rebate program is so obscure and cumbersome that only 357 drivers applied for it last fiscal year.

As the price of gasoline hovers above $3 per gallon, state lawmakers are considering a bill that would simplify the process. If approved, thousands more commuters would be expected to apply for the refund, which averages about $90 per applicant.

''Let's try to make life easier and a little less expensive for the people who drive the Pike every day," said the bill's sponsor, Representative David Linsky, a Natick Democrat. ''Administratively it is an incredible burden to seek this refund. Most people get frustrated and never bother."

Senator Karen Spilka, an Ashland Democrat who supports Linsky's bill, said it's unfair that commuters from Boston's western suburbs get socked twice -- at the gas pump and at the toll plaza.

''I honestly don't know of anybody who has taken the time to fill out all the paperwork for it," she said. ''Anything we can do to help folks that commute on the Pike, we need to do."

When legislators established the Massachusetts Turnpike Authority in 1952, they exempted fuel consumed along the tollway from taxation because motorists were already paying tolls for maintaining the road. The state's gas tax -- now 21 cents a gallon -- is used to build and maintain other state highways and municipal roads.

But the process lawmakers created for drivers to get their tax money back creates a giant headache, Linsky said. Under current law, commuters must save all gas and toll receipts and submit them with a detailed form every six months to the state Department of Revenue. Only gas consumed on the Pike within three days of purchase is eligible for the refund. Applicants must fill in descriptions of every trip that qualifies, including date of fuel purchase, number of gallons purchased, date of toll receipt, where they entered and exited the tollway, and mileage traveled.

The law allows a rebate of 21 cents per 15 miles traveled (15 miles is set as the standard fuel efficiency per gallon). But the Revenue Department takes a big chunk of the refund by assessing the state's 5 percent sales tax on gas exempt from the fuel tax.

Linsky's bill, which he presented to the Joint Committee on Revenue last week, would eliminate the requirements that gas be bought within three days of travel and that drivers submit fuel receipts.

His bill does not address the sales-tax assessment, which eats more of the refund as the price of gas goes up.

If fuel used on the Pike were also exempt from the sales tax, the savings could be substantial for many drivers. For example, a commuter heading to the Back Bay from Interstate 291 in Springfield travels 165 miles on the Pike per day round-trip. Assuming that trip is made 250 times a year, the motorist would be eligible for a refund of $574 a year. With $3 gas, after sales tax is taken out, that refund would shrink to less than $200, however.

Closer in, a round trip from Framingham to Interstate 93 is 46 miles. A commuter making that round trip 250 times a year would be eligible for a $161 gas-tax refund per year, which declines to $54 after sales tax.

For the few who applied, the average rebate was $88 last year, said Tim Connolly, a Revenue Department spokesman. The state doled out $31,575 in turnpike refunds last fiscal year, he said, a tiny fraction of the $686 million Massachusetts collected in motor fuels taxes.

Last year, the Legislature also authorized a one-time income-tax deduction for commuting expenses for Pike drivers and MBTA riders. Taxpayers were able to deduct up to $750 in tolls or transit passes, for a net tax reduction of up to $39.75 on their 2004 taxes.

The Romney administration supports making it easier for turnpike commuters to get their gas taxes back, Connolly said.

''Right now it's a lot of paperwork for a small amount of money," he said. ''We've always tried to do the best we can to try to get the refund to the taxpayer, but it hasn't been easy."

The Turnpike Authority favors any effort to streamline the rebate process, said spokesman Doug Hanchett. There is no estimate on how much the state could lose if every eligible commuter applied for the refund to which they are entitled, but the turnpike is used by about 240,000 vehicles per day.

Aides to the Revenue Committee's two leaders said they are interested in streamlining the refund application.

''This clearly appeals to her constituency," said Sean Kealy, legal counsel to Senator Cynthia Creem, a Newton Democrat. ''We're receptive to the idea."

Lucas Wall can be reached at lwall@globe.com.

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