Adjustments to the gas tax charge in 12 states

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Changes to the fuel tax rate in 12 states

In state houses from West Virginia to Wyoming, lawmakers are trying to make changes to the way fuel taxes are collected.

The Owner-Operator Independent Drivers Association believes that increasing fuel taxes is the fairest way for states to generate additional revenue.

Arizona

Two bills from Arizona to increase fuel tax rates stalled.

Arizona now charges 18 cents a gallon for gasoline purchases and 26 cents for diesel purchases. Unchanged since 1991 and 1993, tax rates increase about $ 750 million annually.

With the first bill, HB2436, tax rates should be increased regularly. In particular, the bill would adjust tax rates annually to reflect the average change in the consumer price index. The rule would take effect in July 2022.

A second bill, SB1650, called for a gradual increase in fuel tax rates in the Phoenix area.

Maricopa County's fuel taxes would increase a penny annually. In addition, taxes would be linked to annual inflation.

The additional gas tax would apply for 20 years. The additional diesel tax would have no expiry date.

Governor Doug Ducey previously stated that he was against a tax hike. The bills did not come from their chamber of origin by February 18.

Illinois

An Illinois Senate bill would allow cities across the state to collect their own fuel taxes.

The state collects 38.7 cents per gallon for gas purchases and 46.2 cents for diesel. Since January 1st in Chicago, another 8 cents per gallon has been collected for gas and diesel purchases – up from 5 cents.

SB120 was sponsored by Senator Patrick Joyce, D-Essex and would empower communities across the state to collect a local fuel tax.

Communities that impose a local fuel tax under the proposed law are only allowed to collect up to 3 cents per gallon.

A similar bill would allow counties across the state to collect a local fuel tax.

Currently, McHenry, DuPage, and Kane counties have local fuel taxes of 4 cents per gallon.

HB1846, sponsored by Rep. Will Guzzardi, D-Chicago, states that the proceeds from the tax must be used for the maintenance and construction of "essential transport-related infrastructure".

Kentucky

Two bills in the Kentucky House are said to increase fuel tax rates in the state.

Kentucky is now raising 26 cents a gallon on gas purchases. Net diesel purchases by the state are 23 cents per gallon.

Taxes are tied to wholesale fuel prices, which allows for regular adjustments. Since 2016, however, a "floor" has been introduced to prevent rates from falling.

As a result, the rates have remained unchanged.

The bill would remove the link between fuel taxes and wholesale fuel prices.

Instead, the tax rates would be adjusted annually on the basis of a federal construction index. The initial base rate would add 4.3 cents a gallon for gas and 7.2 cents for diesel.

HB508 is on the House Transportation Committee.

A separate bill is from a year ago to raise fuel tax rates. Further vehicle fee increases are also included in the invoice.

HB561, sponsored by Rep. Sal Santoro, R-Florence, would increase the gas tax rate by 8.6 cents to 34.6 cents. The diesel tariff would be increased by 11.6 cents to 34.6 cents.

An additional tax of 4.3 cents for gasoline and 7.2 cents for diesel would also be levied on fuel purchases.

A cost reduction associated with fuel tax rates would prevent the levying of the additional motorway tax on gas and diesel purchases. The fee is one nickel for each gallon sold.

After all the staff changes, the new gas tax rate would be 33.9 cents and the diesel rate 36.8 cents.

Tax rates would also be adjusted annually based on a federal construction index.

Louisiana

The Louisiana Statehouse continues to discuss the likely effort to more than double the state's 20-cent fuel tax rate.

Jack McFarland, R-Jonesboro, has announced that he will soon be putting forward a bill to increase excise tax by an initial 10 cents. Additional increases of two cents would be made every two years through 2033.

If fully implemented, the tax rate would reach 42 cents.

Each further increase in the penny is estimated at about $ 30 million.

Approval in the statehouse would require a two-thirds majority.

Governor John Bel Edwards and Louisiana Secretary of State for Transportation and Development Shawn Wilson previously announced their support for a fuel tax increase. However, this year both officials have indicated that it doesn't seem like the time is right. You quote the weak economy.

Mississippi

The House Ways and Means Committee voted to propose a bill to approve a nationwide referendum to increase fuel taxes.

The state's current fuel consumption tax is 18 cents. It's been unchanged since 1987.

The bill, sponsored by House Ways and Means Chairman Trey Lamar, R-Senatobia, would increase the price of gas by one cent to 28 cents. The diesel tax would rise by 14 cents to 32 cents.

Nod to truckers

A change to the bill in the committee would put the tax increases in phase.

"This is supposed to take some of the burden off our truckers," Lamar said during the hearing. "I've only got positive feedback from truckers in this condition."

He cited existing contracts that truckers have to buy fuel.

From July 1st, the gas tax would increase by one nickel and the diesel tax by 7 cents. The remaining increases would take effect on January 1, 2022.

Tax rates would be indexed to allow for regular increases in 2031.

The proceeds would be used for certain road and bridge works totaling $ 2.5 billion.

Bill HB1364 is awaiting debate in the House. If the law were signed, voters would have the final say this spring.

Another bill from the House Ways and Means Committee would raise the gas tax rate by 8 cents to 26 cents. HB574 would implement the increases in 2-cent increments over four years.

At the same time, the diesel tariff would be increased by 12 cents to 30 cents. The increases would be made in increments of 3 cents.

Missouri

Efforts at the Missouri Statehouse are touted as helping to provide long-term funding for road and bridge works to be completed. The state's 17-cent fuel tax rate has remained unchanged since the mid-1990s.

According to a tax bill attached to the bill, fuel tax raised $ 698.7 million in fiscal 2020.

State officials report the state has an unfunded need of $ 8 billion to $ 10 billion for the transportation system.

To correct the deficit, the Senate Transportation Committee voted to propose an amended bill to raise the fuel tax rate by 10 cents to 27 cents per gallon.

The increase would be gradual over five years. From January 1, 2022, the tax would be increased by 2.5 cents every two years until 2027.

The cent increase is expected to raise an additional $ 411 million annually.

Senate President Dave Schatz, R-Sullivan, revised his bill in committee to include the ability for Missouri residents to request an exemption and refund.

SB262 awaits further consideration in the Senate.

Montana

Months after voters in the city of Missoula approved a local gas tax to boost local transportation, a house bill would abolish the tax hike.

Rep. Matt Regier, R-Kalispell, is behind a bill to repeal the 2-cent excise tax on gas purchases. Diesel fuel was excluded from the increase.

Critics of the gas tax hike say it is the wrong time to impose more taxes on drivers. Others have said the county should take steps to better manage the revenue that is already available.

To make matters worse, critics have said that the local tax just piles up when you factor in the recent nationwide hikes in the fuel tax rate.

Montana law approved a fuel tax increase four years ago, ultimately raising $ 49 million annually on state and local roads.

Since then, the state's gas tax rate has risen by 5 cents to 32 cents. A further increase in the penny will be gradual through 2023.

Similarly, the state's diesel price has since risen by around 1.5 cents to 29.45 cents. Another half-cent increase will be carried out over three years.

Regier's bill HB464 is on the House Transportation Committee.

New Mexico

In New Mexico, the Senate Tax, Business, and Transportation Committee passed a bill to increase the state's excise tax rates.

The state is now levying a consumption tax of 17 cents on gas and a tax of 21 cents on diesel.

SB168, sponsored by Senator Bobby Gonzales, D-Ranchos de Taos, would increase both rates by one penny over a five-year period. At this point the gas price would be set at 22 cents and the diesel price at 26 cents.

According to a tax bill attached to the bill, the tax increases would raise $ 63.6 million for state and local roads by fiscal 2025.

The bill awaits further discussion in the Senate Finance Committee.

North Dakota

The North Dakota House voted 62 to 32 in favor of introducing an amended law to increase the state's fuel tax rate. Alternative fuel vehicle owners would also pay more.

The state now collects 23 cents per gallon on diesel and gas sold.

HB1464, sponsored by Rep. Vicky Steiner, R-Dickinson, would increase the excise tax by 3 cents to 26 cents. The original version provided for an increase of 6 cents.

In addition, road charges would increase from $ 120 and $ 50 for electric and hybrid vehicles to $ 200 and $ 100, respectively.

The bill is now going to the Senate Finance and Tax Committee.

Washington

Washington House Democrats have announced plans to raise the state's fuel tax rate from 49.4 cents.

The 16-year financing package of $ 26 billion includes an 18 cents increase in the gas tax rate. The tax would be increased by 10 cents this year and another 8 cents in 2022.

The diesel tariff would be increased by the same amount with an additional increase of 3 cents.

Tax rates would also be tied to inflation, which would allow for annual increases.

"Our proposal is much larger than any other in state history because the needs and challenges are so much greater," said Jake Fey, chairman of House Transportation, D-Tacoma, during a press conference detailing the plan .

A gas rate of 67.4 cents and a diesel rate of 70.4 cents are expected to bring in about $ 1 billion annually.

In addition, the house democracy package would include a new carbon fee.

The fee has been described as an aggressive climate change policy, which bills polluters with the right to emit carbon dioxide and other greenhouse gases.

The carbon fee would start at $ 15 per tonne of carbon. It's estimated the levy would add about 14 cents per gallon of fuel. The fee would increase by $ 5 per tonne of carbon emissions in 2023 and again to $ 25 per tonne in 2025.

Also includes a $ 10 increase in truck license fees by weight and a $ 25 increase in IFTA decal fees.

About two thirds of all income would be used for work related to highways. Most of the balance would be used for initiatives to reduce CO2 emissions.

West Virginia

A West Virginia legislature wants to give truck drivers a discount on fuel taxes.

The state now levies an excise tax of 20.5 cents on fuel purchases.

The bill, sponsored by Rep. Tom Fast, R-Fayette, would require a refund for diesel fuel consumed by a commercial vehicle for operation outside of the state.

HB2523 is a member of the House Technology and Infrastructure Committee.

Wyoming

The state's current tax rate of 24 cents per gallon has been unchanged since 2013.

The Joint Revenue Interim Committee has tabled a bill to leverage the existing source of funding and improve support for state and local road projects. In particular, the legislation would increase taxes on gas and diesel by 9 cents to 33 cents per gallon. The tax on alternative fuels would be increased by the same amount.

It is estimated that each penny increase brings in $ 6.7 million annually.

The Wyoming Department of Transportation reports unfinanced operating expenses of $ 135.6 million. The amount includes $ 72.3 million for construction and maintenance.

Bill HB26 would raise an estimated $ 60.3 million annually for state and local roads, according to the agency.

A tax bill attached to the bill shows that the state's highway fund would raise approximately $ 40.2 million. Another $ 14.1 million would be allocated to county roads, while cities and towns would receive $ 5.9 million. The remaining $ 1.2 million would go to state parks. LL

Other government trends

Keith Goble, state editor for Land Line Media, follows many trends in state houses in the United States. Here are some recent articles from him.