(a) The taxes and fees imposed by §§ 67-3-202 — 67-3-204, on the date of an increase in the tax rate, shall be applicable to previously taxed petroleum products in inventory held for sale by a wholesaler.

(b) The tax imposed by § 67-3-201, on the date of an increase in the tax rate, shall be applicable to previously taxed gasoline in inventory held by a supplier, bonded importer, importer or wholesaler, except inventory held at retail.

(c) The tax imposed by § 67-3-202 shall be applicable to all nonexempt inventory held by any person outside of the bulk transfer/terminal system in this state to the extent such inventory has not previously been subject to the tax imposed by this state under the predecessor motor fuel tax statute; provided, that no tax shall be payable with respect to dyed diesel fuel or fuel held by an exempt user, including governmental agencies described under § 67-3-401.

(d) Persons in possession of taxable petroleum products subject to this section shall take an inventory at the start of business on the date that the increased tax rate becomes effective and on January 1, 1998, to determine the gallons in storage for purposes of determining the taxes and/or fees; provided, that in determining the amount of taxable petroleum products taxes and fees due under this section:

(1) The person may exclude the amount of taxable petroleum products in dead storage;

(2) For the inventory taken on January 1, 1998, the person may exclude gallons on which taxes and fees at the full rate have previously been paid;

(3) The person may exclude gallons of dyed diesel fuel from the tax imposed by § 67-3-202 only; and

(4) The person shall report the gallons listed in this section on forms provided by the commissioner.

(e) Where gallons in taxable inventory have not previously been subject to the predecessor motor fuel tax statute, the amount of the inventory tax is equal to the tax rate times the gallons in storage, as determined under subsection (c). In the case of an increase in the tax rate, the inventory tax is equal to the new tax rate minus the previous tax rate times the number of gallons previously taxed.

(f) Payment of this floorstock tax shall be made in accordance with § 67-3-511.