Taxes, towing, tort reform laws start in 2026

As the calendar flips to the new year, notable new transportation laws are set to take effect around the country. Issues addressed include fuel taxes, towing and tort reform.

Michigan

A new Michigan law ensures all state fuel tax revenue is applied to transportation purposes.

Truck drivers and motorists fueling in the state pay a 31-cent excise tax. The rate is adjusted annually.

There is also a 6% state sales tax on every gallon of gas or diesel sold. Much of the tax revenue is diverted away from transportation.

Part of a nearly $2 billion bill package that is now law is a tax swap at the fuel pump.

As of Jan. 1, the sales tax collected on fuel purchases is eliminated. Instead, an equivalent increase in the excise tax will be made.

The switch enables the state to apply all fuel tax revenue for transportation purposes. Michigan fuel tax revenue is constitutionally dedicated to transportation.

The fuel excise tax will increase from 31 cents per gallon to 51 cents. Fuel sales tax revenue for education will be replaced with money from the state’s general fund. The 6% sales tax levied on truckers is also eliminated.

Oregon

Fuel taxes are also on the rise in Oregon.

Gov. Tina Kotek signed into law a 10-year, $4.3 billion transportation funding package.

The most notable provision is a 6-cent increase in the gas tax rate. The rate increase from 40 to 46 cents is scheduled to take effect Dec. 31.

To address what the governor referred to as “ratepayer fairness,” the package includes a provision to revise weight-mile tax tables.

The Oregon Constitution requires the state highway fund to be “fair and equitable to light and heavy users alike to ensure that cars and trucks pay their fair share of the usage of the road.”

The rule revision is touted to simplify the number of tables based on the declared combined truck weight. It also sets rates for those categories.

Weight-mile rates will be reduced from 87 separate tax rates to 10. Diesel fuel will also be treated as a motor fuel rather than a use fuel.

The governor’s administration touted the change to “simplify weight-mile rates to reduce weight-mile tax evasion and alleviate administrative burdens on trucking companies.”

Illinois

An Illinois transportation law, effective Jan. 1, targets towing operators who ignore penalties and continue operating under new business names.

The Illinois Commerce Commission will be allowed to impound tow trucks with unpaid fines. License plates for tow trucks with unpaid fines can also be revoked. Known violators are prohibited from reregistering under a new business name.

In addition, fraudulent towers are prohibited from obtaining new licenses for three years. Tow truck operators are also forbidden from placing liens against essentials left in a towed vehicle, such as identifying documents.

Another rule change limits tow locations to registered storage lots, licensed repair shops or the driver’s requested location.

Customers can file a safety towing complaint with the ICC and view existing complaints on the commission website.

Louisiana

Tort reform is the topic of two new Louisiana transportation laws that take effect on the first of the year.

One new law modifies the state’s pure comparative fault system.

Pure comparative fault allows a plaintiff’s right to damages to be reduced by the plaintiff’s liability. Plaintiffs are not barred from recovery.

The current system is described as allowing someone who is 99% at fault in a wreck to get a payout from someone who is 1% at fault.

The new law shifts the pure comparative fault system to a modified standard. The change prohibits anyone at least 51% at fault in a wreck from collecting damages.

Dashboard cameras are the subject of another new law. Insurers authorized to issue commercial vehicle policies must offer a discount to policyholders with dashcams and telematics systems.

Policyholders must provide proof that the dashcam and telematics system are installed and operational to obtain the discount. The discount is available during issuance or renewal. LL