Another Nevada county adopts local diesel tax

December 15, 2020

Keith Goble

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Commissioners in Churchill County, Nev., voted recently to adopt a plan to collect a nickel on each gallon of diesel sold in the county.

County officials have said that more money is needed because the cost to construct and maintain roads has steadily increased through the years while revenues received from gas tax collection has dipped about 6.5% since 2004. There has been no local tax collection on diesel fuel sales.

“This situation has made it increasingly difficult to make the necessary repairs and improvements that are needed,” County Manager Jim Barbee wrote earlier this year to local business owners.

The county, located east of Reno, has 250 miles of paved roads and 270 miles of unpaved roads.

State diesel tax authorization

A 2019 state law authorizes county commissions in counties with fewer than 100,000 people to add a tax of up to 5 cents per gallon on diesel purchases. Authorization also is included for certain cities.

Red diesel used for mining and agriculture is exempt from the tax.

The 1-year-old law enables 15 of the state’s 17 counties to charge more at the pump. The other two counties – Clark and Washoe – already are allowed to collect tax on diesel. All other counties in the state can charge a nickel tax on gas.

County commissions first must pass an ordinance with two-thirds majority to implement the extra tax. Another option is for a majority of voters to approve a question during a general election.

Additional diesel revenue raised in rural counties is required to be used for local road construction and maintenance. A portion of tax collections (up to 10%) is routed to the Nevada Department of Transportation. The affected revenue must be used to construct, maintain or repair truck parking in locales collecting the tax.

Churchill County

The 5-cent diesel tax approved by Churchill County commissioners is estimated to raise about $299,000 yearly – about 35% more over current revenues. The bulk of the tax revenue will be slotted to improve roads and bridges within the city of Fallon and the county. Revenue slotted to aid truck parking will total up to $30,000 annually.

“This will include doing more resurfacing of existing roads and repaving those roads that are beyond repair,” Barbee said.

The diesel tax goes into effect on Feb. 1.

Lyon County

The first locale in the state to adopt the five-cent diesel tax was neighboring Lyon County.

In April, county commissioners approved the tax. Tax collection began over the summer.

The county estimates the diesel tax will raise about $2.5 million annually for roads within Lyon County, and the cities of Fernley and Yerington. Truck facilities in the area will receive up to $250,000 per year.

Commissioner Joe Hastings noted at the time the county is about $30 million behind in road repairs for 840 miles of roads.

Carson City

The Board of Supervisors in the state’s capitol city also acted this past spring to approve an ordinance authorizing the collection of the diesel tax.

Effective Aug. 1 in Carson City, diesel purchases include a nickel per-gallon tax. The tax is estimated to raise about $400,000 per year for roads and truck parking.

A sunset is included in the ordinance. In 2022, a question will be included on the local ballot about whether to continue the collection of the tax. LL

More Land Line coverage of news from Nevada is available.

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Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.