Connecticut extends gas tax holiday, leaves diesel out

The state of Connecticut has extended a gas tax holiday through the end of the year. The tax break does not apply to diesel tax collection. On top of that, a new fee is being imposed on truck drivers.

Meeting Monday during a one-day special session, state lawmakers approved and sent to Gov. Ned Lamont a bill that includes a continuation of the state’s gas tax cut beyond the Nov. 30 sunset date.

Tax break for some

In March, the governor signed into law a bill to give motorists a three-month holiday from paying the state’s 25-cent excise tax on gas. The initial tax holiday was scheduled to run from April 1 through June 30 – the end of the fiscal year.

Shortly thereafter, a budget deal reached by state lawmakers and Lamont extended the tax break through the end of November.

Suspension of the gas tax costs the state an estimated $30 million each month.

The tax holiday has not included the excise tax on diesel.

Diesel tax continues to climb

At the same time, Connecticut motorists are getting a price break on gas expenses, the state’s diesel tax rate has increased. On July 1, the state implemented a regularly scheduled adjustment to the diesel tax.

As a result, the then-40.1-cent excise rate increased by 9 cents to 49.2 cents per gallon.

Diesel in the state is taxed following an annual formula that includes a fixed base and an adjustment that accounts for the average wholesale diesel prices from the prior year.

Gas tax holiday extension

Lamont is expected to soon sign into law the 28-page bill that includes extension of the gas tax suspension through Dec. 31.

At that time, the tax rate will not be fully reimplemented. Instead, it will be phased in over time.

Starting Jan. 1, the tax will be set at 5 cents per gallon. Additional nickel increases will take effect monthly until the full 25-cent rate resumes May 1.

Lamont said as recently as a few weeks ago that inflation that is “slamming the middle class” warrants continued pursuit by the legislature to provide relief where possible.

Extending the gas tax holiday through the winter months was an option the governor’s office deemed viable.

The governor’s budget office has reported that the state’s special transportation fund is on pace for a $150 million surplus, which will absorb the continued tax holiday.

Truck tax

While motorists continue to get relief from state taxes, truck drivers are in the crosshairs for a new highway mileage tax.

Scheduled to take effect the first of the year, a highway user fee, or tax, will be implemented on Class 8 through 13 trucks.

At that time, tax rates will increase incrementally for trucks starting at 26,000 pounds. Specifically, rates will range from 2.5 cents per mile for trucks with a gross weight of 26,000 pounds to 10 cents per mile for trucks weighing 80,000 pounds.

Trucks weighing more than 80,000 pounds are slated to pay 17.5 cents per mile.

The new tax is part of a 2021 law with delayed implementation until Jan. 1, 2023.

The Owner-Operator Independent Drivers Association is opposed to the new tax. LL

More Land Line coverage of news from Connecticut is available.