When Florida officials realized that hot fuel was costing the state millions of dollars in taxes, they saw a loophole to plug.</p><p>Fuel expands when it gets hotter and Florida&#8217;s tropical climate meant the state&#8217;s consumers usually paid taxes on an expanded volume. But the fuel tax that retailers remitted to the state was based on a lesser temperature-adjusted volume measured at the wholesale level.</p><p>In response, the state&#8217;s legislature approved a fix to ensure fuel taxes were collected on the extra gallons purchased at the retail pump.</p><p>The victory was short-lived.</p><p>A move to streamline the collection of fuel taxes was passed by the legislature in 1996. But the requirement to figure the taxes due on fuel sold at the pump was dropped during negotiations with the fuel industry.</p><p>&#8220;They made some concessions and we made some concessions,&#8221; said Mark Zych, director of technical assistance and dispute resolution at the Florida Department of Revenue.</p><p>The volume used to calculate state taxes, which, depending on the state, ranges from 8 to 31 cents per gallon, hinges on how the fuel is measured. One method, which adjusts to a volume that provides the same amount of energy it would at 60 degrees, reduces the taxable volume when the temperature is above 60 degrees. The other method does not adjust for temperature, which reduces the taxable volume when the temperature falls below 60 degrees.</p><p>The Kansas City Star found a patchwork of state laws that allows deft use of measuring methods by the oil industry to keep fuel taxes paid to the government down regardless of the fuel temperature.</p><p>Meanwhile, retailers often collect taxes from consumers that never make it to state coffers.</p><p>As a result, nearly $200 million in state fuel taxes are available to be pocketed by the oil companies and other owners of gas stations and truck stops.</p><p>In states such as California, Arizona, Texas and Florida &#8212; where fuel temperatures are usually warmer than 60 degrees &#8212; the oil industry favors the temperature-adjusted method, which reduces the fuel volume and the taxes they pay. But those states don&#8217;t allow consumers to purchase the fuel measured the same way.</p><p>Meanwhile, in the cooler northern tier of states, including Maine, Wisconsin and Minnesota, the rules are different. If fuel volume was adjusted for temperature in those cooler states, retailers would have to pay more taxes. But those states allow the fuel to be measured without a temperature adjustment, or the same way as sold to consumers.</p><p>The patchwork of different approaches evolved over decades as government officials and industry executives rewrote and tweaked fuel-tax laws.</p><p>David Breidenbach, former tax counsel for Marathon Petroleum Co. who helped craft fuel-tax laws in roughly 15 states, said paying as little tax as possible was a major goal of the companies. And the way fuel was measured was part of that strategy.</p><p>In states that were warm or cold for most of the year, tax strategies are fairly straightforward. For example, California has allowed wholesale taxable fuel volumes to be temperature-adjusted since the fuel tax was enacted in 1923.</p><p>But in middle states, such as Indiana and Missouri, with hot summers and cold winters, discussions were more complex. Sometimes the solution was to allow either method to be used, as is now done in Missouri.</p><p>Sometimes state officials flinch at the taxes being lost.</p><p>A Florida lawsuit in the 1990s described a system that state officials had decided to fix because hot fuel was causing consumers to pay taxes that were not going to the Department of Revenue. The fix, subsequently revoked, was to require tax to be remitted on the additional gallons.