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November 14, 2017 | Vol. 67, No. 22

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In This Issue

Dear PEI Member:

The prospects for the first major federal income tax reform since 1986 are looking stronger, with both houses of Congress soon to vote on comprehensive tax legislation and President Trump pushing to have a bill ready for his signature by the end of 2017.

Most of the news headlines are about the possible lowering of individual tax rates. The Senate and House bills, however, contain many other provisions that would affect PEI members individually or in their businesses. Here’s a summary of key elements in each bill:

  • Inventory valuation. After an intensive lobbying effort, the National Association of Wholesaler-Distributors (NAW), an organization to which PEI belongs, scored a big win on this one. Last-in-first-out (LIFO) accounting, a method that yields a higher cost of goods sold and lower taxable income for many wholesale distributors, survived in the Senate and House bills.
  • Accelerated depreciation. Both bills propose new rules that would allow businesses to speed up depreciation of capital investments. In many cases, small businesses would be able to deduct 100% of the cost of qualified property in the year of purchase. However, the accelerated depreciation rules would expire after five years.
  • Electric vehicle tax credits. Current law grants purchasers of electric vehicles (EVs) a $7,500 federal income tax credit. The House bill would eliminate the EV tax credit beginning in 2018. The Senate would preserve the credit as it now stands. 
  • Personal income tax rates. Both the House and Senate bills lower some tax rates, especially in the middle income brackets. Which bill you prefer will depend on your income. For example, married taxpayers with income between $77,400 and $90,000 would see a 12% marginal tax rate under the House bill, but 22.5% under the Senate proposal. A couple with $90,000 to $120,000 of taxable income would pay 25% under the House plan, but only 22.5% under the Senate plan.
  • Corporate income tax rates. Under present law, corporate income is taxed at up to 35%. The House bill would lower that to 20% in 2018. The Senate bill adopts the same rate but would delay the rate reduction until 2019.
  • Pass-through taxation. Many PEI member businesses are Subchapter S corporations or limited liability corporations (LLCs). Business income from these entities passes through to the owners, who then pay tax at their personal income tax rates, which can be as high as 39.6%. The House bill would lower the maximum tax rate for pass-through business income to 25%. The much more complicated Senate plan has a maximum rate of 33%.
  • Standard deduction. Roughly 90% of Americans do not itemize deductions but instead take an IRS-allowed standard deduction. The House and Senate plans would nearly double today’s standard deduction—from $6,350 to $12,000 for single taxpayers and from $12,700 to $24,000 for married couples.
  • Popular deductions. For those who do itemize, charitable contributions and mortgage interest deductions are preserved in both bills; however, state and local income taxes no longer would be deductible. The House would allow up to $10,000 in property tax deductions, while the Senate eliminates this deduction altogether. The deduction for student loan interest, retained in the Senate bill, is eliminated in the House plan.

Tax Reform Proposals

Visa Shifts Excessive Fraud Liability

Ozone Attainment Areas

PEI Convention Video and Audio Highlights

Latin America Committee Volunteers Sought





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Effective Nov. 1, Visa began shifting liability for excessive fraudulent transactions at automated fuel dispensers (AFDs) to station operators. Under Visa’s program, retail fuel marketers are deemed to have “excessive” fraud when they reach at least $10,000 in monthly counterfeit AFD transactions and a fraud-to-sales rate of at least 0.2 percent. Visa has been notifying retailers of their fraud levels for the past several months so high-risk locations could improve their performance before the liability shift. 

Visa’s fraud monitoring program will end Oct. 1, 2020, when all marketers that have not converted to EMV-compliant equipment in the forecourt will assume liability for fraudulent AFD transactions.

On Nov. 6, the U.S. Environmental Protection Agency (EPA) designated roughly 85 percent of the nation’s 3,100 counties as being in compliance with a 2015 regulation that reduces the allowable amount of ground-level atmospheric ozone from 75 to 70 parts per billion. The EPA is continuing to evaluate the remaining counties to determine which are not in compliance with the 2015 ozone limits.

States that are determined to contain nonattainment areas will be required to submit state implementation plans (SIPs) detailing the pollution control measures they will use to meet the new ozone standards.

Additional vapor recovery requirements relating to gasoline dispensing facilities (GDFs) are unlikely. Under the Clean Air Act, Stage II vapor recovery equipment was required at GDFs in serious, severe and extreme ozone nonattainment areas until the EPA determined that vehicle onboard vapor recovery (ORVR) equipment was in "widespread use." In 2012, the EPA officially made that determination, noting in a related fact sheet that ORVR and Stage II vapor recovery systems are redundant.

During the membership meeting at the PEI Convention, your TulsaLetter editor presented the annual State of the Industry report. Based partly on data from a recent survey of PEI members, the address discussed current business conditions, the outlook for distributors and manufacturers over the next few years and the big issues and opportunities that are on PEI’s radar. A video of the 18-minute presentation can be viewed here on PEI’s YouTube channel.

In Chicago, NACS also interviewed 2017 PEI President Craig Hoyer, 2018 PEI President Robert Peavey and me for a “Convenience Matters” podcast called “Dispensing Advice with PEI Leaders.” The complete conversation is now available on the Convenience Matters website. You can subscribe to all Convenience Matters podcasts through iTunes, Google Play or Stitcher.

At the 2017 PEI Convention, 92 Latin American members attended a special educational session conducted in Spanish. The annual membership meeting and a session on confined spaces also were translated into Spanish. These very successful programs were the fruit of a steering committee that met earlier this year to recommend ways in which PEI could better serve members in Latin America.

The PEI board of directors now has asked the steering committee to present recommendations for additional Latin America programs and services PEI should provide. To assist in this next phase, PEI is seeking to broaden and expand the steering committee. The committee will conduct much of its work via email, with a single face-to-face meeting in January 2018. To learn more or volunteer to serve on the committee, email PEI Marketing Director Whitney Emerick at wemerick@pei.org by Friday, Nov. 30.

Husky Corp.
celebrated its 70th anniversary on Nov. 3 with an open house for suppliers, distributors and friends. Based in Pacific, Missouri, Husky was founded by Eugene Sutcliffe and is today led by his son, Grenville Sutcliffe.
Continental ContiTech acquired manufacturer Custom Machining Services, Inc. Founded in 1979, Continental ContiTech has produced hose assembly equipment, crimpers and dies at its Valparaiso, Indiana facility since 1984.

Angie Daniels
was named vice president of human resources for Seneca Companies. Daniels has 20 years of human resources experience in manufacturing at both corporate and plant levels.
Patrick Eakins joined Dixon Pumps as business development manager for cleaning and filtration systems. Eakins has extensive experience managing tank and fuel quality maintenance programs, as well as mobile fuel and tank cleaning programs.
Power Integrity Corp. appointed P&G Marketing its manufacturer’s representative for the petroleum market in Kansas, Nebraska, Missouri, Iowa, Illinois and Wisconsin.
Universal Valve Co. appointed TR2 Corp. its exclusive sales representative in Maryland, Delaware, Pennsylvania, Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, Maine and New York.

William A. Cartwright
, 95, of Fort Wayne, Indiana, died Friday, Oct. 20. Cartwright spent 42 years in the petroleum equipment industry, including service at Bowser Inc., Wayne Pump and Tokheim Inc. He retired in 1990 as vice president of marketing at Tronitec Inc. Survivors include three daughters: Mary Lynn Muntz and her husband, Gary; Jenny Dougal and her husband, Jim; and Julia Shadwick and her husband, David; and three stepchildren, Nancy, Lynda and Roger.
Joe Kubasky, 60, of Cleveland, Ohio, died Oct. 7 after battling a terminal illness. At the time of his death, Kubasky had served as SSECO Solutions’ warehouse supervisor for 40 years. Survivors include three siblings: brother Edward and his wife, Peg; brother Kenneth and his wife, Sandy; and a sister, Lynn Oslin.

“President Donald Trump's pick to fill EPA's second-highest post [Andrew Wheeler] promised
Wednesday that he will, if confirmed, issue a finding on whether the agency believes it has the authority to grant E15 and other higher ethanol blends a Reid Vapor Pressure (RVP) waiver. … The lack of an RVP waiver prevents the sale of E15 in large parts of the country from June 1 through Sept. 15, the peak of the high-demand summer driving season.”—Oil Express News Alert, Nov. 8, 2017
“The Bureau of Economic Analysis reported that the U.S. economy grew by an annualized 3.0 percent in the third quarter, extending the 3.1 percent gain in the second quarter. This was slightly better than the predicted growth rate of 2.6 percent—a sign that even with the recent hurricanes, the U.S. economy continues to expand at a decent clip.”—Monday Economic Report, Oct. 30, 2017
“With more and more 3D printed parts hitting the market, Forbes predicts the spare-parts supply chain will shift toward 3D printing solutions within the next three years. A survey report from Strategy& estimates that 85% of spare-parts suppliers will build 3D printing into their strategies within five years… .”—Machine Design, Oct. 25, 2017

Taiwan car wash manufacturer.
Chia-Ma Car Wash Systems, No. 46-1 Alley 105 Sec. 2, Beigon Road, Taibao City, Chaiyi County, Taiwan 61257, has applied for affiliate division membership. Ching Han Yang is the international business manager for the firm, which was established in 1995. The company produces several types of car wash systems. Sponsored for PEI membership by Tedmund Tiberi, AridTech, Wheaton, Illinois.
California environmental construction company. Alaniz Associates Corp., 21334 E. Cloverton St., Covina, CA 91724, has applied for service and construction division membership. Manuel Christopher Pestana is president of the firm, which was established in 2011. The company does UST and AST installation, removal and repairs and offers water and soil treatment. Sponsored for PEI membership by Don Petroni, PtrMktgEqp, Placentia, California.
Tennessee contractor. Service Bay Solutions, 405 Erin Drive, Knoxville, TN 37919, has applied for service and construction division membership. James Caldwell is project manager for the firm, which was established in 2014. The company is a general contractor that installs and repairs lubrication equipment. Sponsored for PEI membership by Jim Norton, Samson, Swannanoa, North Carolina.


  • TrueNorth Steel, West Fargo, North Dakota (mfr)
  • GROZ Engineering Tools Ltd., Wood Dale, Illinois (aff)
  • Sein Maung Engineering Co. Ltd., Yadanar Road, Myanmar (S&C)
  • Hellenic Technical Enterprises Ltd., Larnaca, Cyprus (S&C)
  • Quar Construtora S.A. de C.V., Miguel Hidalgo, Mexico (S&C)
  • Webb Environmental LLC, Westminster, Maryland (S&C)
  • Tank Wizards Inc., Palm Bay, Florida (S&C)
  • Matthew J. Cutshall, Sheetz, Altoona, Pennsylvania (O&E)


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© 2017
Petroleum Equipment Institute
P. O. Box 2380
Tulsa, OK 74101-2380

The TulsaLetter (ISSN 0193-9467) is published two or three times each month by the Petroleum Equipment Institute. Richard C. Long, Editor. Opinions expressed are the opinions of the Editor. Basic circulation confined to PEI members.