It’s All in the Taxes

It’s All in the Taxes
Diesel Prices

States from all over the country have made recent changes to their fuel tax collection methods and rates. These changes are taking effect to raise transportation funds in order to improve the overall function of the economy.

The tax rate in Idaho had remained at a quarter of a dollar since 1996 until now. The new law implemented a 7-cent-per-gallon increase to 32 cents. It is expected to boost transportation revenue by $63 million annually.

Georgia abandoned collection of a two-part tax on fuel purchases that had been in place for over 40 years. This change in method will result in approximately $180 million being rerouted from that state’s general fund to transportation. Additionally, since July 1, fuel tax collection has been converted to a pure excise tax at 26 cents per gallon for gas and 29 cents for diesel. The increase is expected to raise $700 million for transportation work.

Rhode Island’s 2014 budget bill included a fuel tax increase by one cent to 34 cents per gallon. The rate will also be adjusted every two years according to inflation.

A law in Maryland required the sales tax rate to increase from 2 to 3 percent, resulting in an increase of 1.8 cents per gallon to an overall 32.1 cents.

Nebraska’s tax rate increased by 0.5 cents due to automatic changes set in the state law. Additionally, a 6-cent-per-gallon increase over four years has been approved by the Nebraska Legislature and slated to be implemented on Jan. 1, 2016.

Connecticut saw a drop in the diesel tax rate by 4.2 cents to 50.3 cents per gallon due to a law that linked the state’s tax rate to wholesale fuel prices. This new tax rate will remain in effect for one year.

As of July 1, California saw a 2-cent-per-gallon increase in diesel while the excise tax rate for gas decreased by 6 cents. Lawmakers are considering a bill that would increase the excise tax by 10 cents for gas and 12 cents for diesel.

Iowa saw a 10-cent increase on gas and diesel tax rates while South Dakota saw a 6-cent increase.

North Carolina lowered its tax rates by 1.5 cents and Kentucky lowered its rates by 1.6 cents. Consequently, both states made changes in how the fuel tax is collected to allow for regular increases in the future.

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