Eight states impose fuel tax changes July 1

June 25, 2021

Keith Goble

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The first of July marks changes in fuel tax collections in eight states from Connecticut to California. The tax rate changes range from a 6.8-cent increase on diesel in Virginia to fractional price changes for gas and diesel in Illinois and California.

California

Another round of fuel tax rate increases in California will take effect the first of the month. The increases are to keep up with inflation.

Excise tax collected on gas purchases has been set at 50.5 cents and the diesel rate at 38.5 cents. As of Thursday, July 1, the gas rate is up 0.6 cents per gallon to 51.1 cents.

The diesel tax in the Golden State is up 0.4 cents per gallon to 38.9 cents.

The latest increase to the fuel tax is part of a 2017 transportation funding deal that raised the excise tax on diesel and gas by 20 cents and 12 cents, respectively. Vehicle fee increases were also included in the funding deal.

The 10-year, $52 billion transportation funding deal – SB1 – is touted to benefit local roads, trade corridors and public transit.

Connecticut

The state’s diesel tax rate is headed down. The 44.6-cent excise rate will decrease by 4.5 cents to 40.1 cents per gallon for the next year.

The gas tax will remain unchanged at 25 cents.

The tax reduction for truck drivers, however, pales in comparison to an impending truck tax awaiting Gov. Ned Lamont’s signature.

Illinois

Fuel tax rates in Illinois are up for the third year in a row.

As a result of a $45 billion capital plan approved two years ago by the General Assembly, the state gas and diesel taxes were doubled. Since then, the gas rate has increased to 38.7 cents and the diesel rate to 46.2 cents.

The capital plan included a component tying the fuel rates to inflation. Starting July 1, the gas and diesel taxes are up one-half cent to 39.2 cents and 46.7 cents.

Indiana

The state of Indiana’s fuel tax rates also are on the rise. A 2017 state law increased the gas and diesel rates by 10 cents to 28 cents. Tax rates were also indexed on an annual basis through 2024.

As a result, this year’s increase for gas is up one penny to 32 cents. The diesel TAX rate is up 2 cents to 53 cents.

Maryland

Fuel tax rates in Maryland again are dipping. Specifically, the gas tax will be reduced by 0.2 cents and the diesel rate will be trimmed by 0.15 cents.

The changes are due to a seven-year-old inflation indexing law. The gas tax will be set at 36.1 cents while the diesel rate will become 36.85 cents.

Nebraska

Starting July 1, a fuel tax decrease will be implemented in Nebraska.

The 28.7-cent gas and diesel excise rate will dip by 1 penny to 27.7 cents. The change is due to a law linking the state rates to the price of fuel.

The state tax is made up of three components: the variable tax, fixed tax and wholesale tax. The variable and wholesale rates are adjusted twice annually. A separate petroleum release remedial action fee is not included in the state tax rates.

The decrease in the state’s tax rates is a result of declining fuel prices and a six-month adjustment in the wholesale tax rate.

Another recalculation is set for Jan. 1, 2022.

South Carolina

The 24-cent diesel and gas excise rate collected in South Carolina is going up once again by 2 cents. The change to 26 cents follows a 2017 state law to impose increases of 2 cents annually through 2022. At that time, the tax rate will top out at 28 cents.

The South Carolina Department of Transportation has collected about $608.5 million the first four years of the tax increase.

Virginia

Virginia’s gas rate is up the first of the month. The 21.2-cent tax rate will increase one nickel to 26.2 cents.

The 20.2-cent diesel rate will be raised to 27 cents.

The rate changes are the second of a two-part tax increase. Over the past two years, the gas tax rate will be up 10 cents.

The diesel tax rate was unchanged one year ago.

Starting July 1, 2022, both tax rates will be indexed to annual changes in the consumer price index. LL

More state news from Land Line is available.

 

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.