Fuel tax rate changes for New Year

December 2020/January 2021

Keith Goble

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States around the nation are ringing in the New Year  with changes in their fuel tax rates.

Modest changes of likely one penny or less are expected in states that include Florida, Georgia, Nebraska, New York, Pennsylvania, Utah and West Virginia. The changes are based on automatic adjustments.

North Carolina freeze

In North Carolina, action taken by the state Legislature ensures the state’s 36.1-cent fuel excise rate does not soon dip.

Due to the state’s tax being indexed to a weighted average of energy inflation, a fiscal analysis showed the excise rate was estimated to decrease by 0.9 cents to 35.2 cents at the first of the year.

A new law put a temporary floor on the fuel excise rate. Specifically, the 2021 rate cannot be lower than the current rate.

The change is estimated to increase revenue by

$53.6 million over the next two years.

Once the tax floor expires, the rate will revert to whatever the rate would be without interference from the Legislature.

Automatic adjustments

States with automatic adjustments are due to tax rates calculated by percentage of fuel price in addition to a flat excise tax, fuel tax calculated by percentage of fuel price, indexed to consumer price index, and/or other means.

Some states with automatic adjustments are implemented annually while others change more frequently.

According to the Transportation Investment Advocacy Center, there are 20 states with variable-rate state fuel taxes.

The changes are calculated each month, quarterly, every six months, annually, or every two years.

The state of Indiana updates its fuel rates each month. In Vermont, fuel rates are updated quarterly. Tax rates in Alabama and Rhode Island are revised every two years. Nebraska revises its tax rate every six months.

Additionally, annual updates are made in Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Maryland, New York, North Carolina, Pennsylvania, Utah, Virginia and West Virginia. LL

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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.