Alabama fuel tax rates to increase Sept. 1
August 27, 2019
The first of the month in Alabama will mark the first fuel tax rate increase in nearly 30 years.
Alabama now collects 18 cents per gallon on gas and 19 cents on diesel. The fuel rates are unchanged since 1992.
Gov. Kay Ivey signed a fuel tax rate increase bill into law this spring. It increases existing tax rates by 10 cents over three years to 28 cents and 29 cents, respectively. Effective Sept. 1, the tax rates will be raised by 6 cents. Additional 2-cent increases will occur in October 2020 and 2021.
The additional tax collection is estimated to raise $323 million annually when fully implemented.
Two-thirds of the revenue from the fuel tax rate increase will be routed to the state. Counties will collect 25% of additional funds and cities will receive 8% of the fuel tax rate increase revenue The money will used to fund infrastructure improvement, preservation and maintenance projects.
Excise rates will also be indexed. The change to indexing allows for the fuel tax to rise automatically with the rate of inflation.
The new law prohibits the increase or decrease of the excise rate by more than a penny.
In an effort to reduce incidents of road rage, a separate new law in effect Sept. 1 amends the state’s left lane use rule.
Alabama law already prohibits drivers from hanging out in the far-left lane.
The new law revises the rule to clarify while traveling on an interstate it is against the law to stay left more than 1½ miles without completely passing another vehicle. Certain exceptions would apply, such as while driving through a work zone or during heavy traffic congestion.
Warning citations would be issued for the first 60 days.
Alabama fuel rates to increase Sept. 1
The first of the month in Alabama will mark the first fuel tax rate increase in nearly 30 years. Left lane use rules will also be updated.