Massachusetts lawmakers pursue fuel tax relief

Efforts are underway in Massachusetts to offer price breaks on fuel purchases.

A campaign led by Harold Hubschman, head of the ballot committee Sign2SuspendTheGasTax.org, seeks to ask voters whether to suspend fuel tax collection when prices reach at least $3 per gallon.

The current average price of on-highway diesel fuel in Massachusetts is $5.75 per gallon, according to AAA. The state’s average gas price is $3.74.

Included in the cost for gas and diesel is a 24-cent-per-gallon state excise tax.

The initiative is seeking signatures from individuals for three possible proposals to help counter fuel costs that have increased significantly over the past two years.

Hubschman said a recent poll highlighted on the campaign’s website shows that nearly 60% of voters want the state to suspend the fuel tax.

“Massachusetts drivers are being hammered by inflation, and they need relief,” Hubschman said in a news release. “Our political leaders on Beacon Hill refuse to consider suspending the gas tax, no matter how high the price is. This poll should drive home to them that, by a 2-to-1 margin, this is what their constituents want them to do.”

Details of proposals

The first proposed law, 22-02, focuses on purchases of gasoline. Purchases of diesel are not included in the proposal.

Specifically, consumers would be eligible for a credit on their personal income tax returns for gas tax payments when the retail price of regular gas in the state is at least $3 per gallon.

The second proposed law, 22-03, and the third proposal, 22-04, would apply to gas and diesel purchases.

Purchases of gas or diesel would be exempt from the state tax when the price at the pump is at least $3 per gallon.

Additionally, 22-03 would change the way the state assesses the tax. Consumers would pay the tax at the pump instead of fuel stations paying the tax on bulk deliveries from wholesalers and adding it to the pump price.

The campaign claims the state can afford to offer fuel tax relief.

“Massachusetts can clearly afford to give drivers gas tax relief. Tax revenues in 2021 were so high that under Massachusetts general law the state is obligated to return nearly $3 billion to taxpayers,” the campaign’s website reads. “Overall, according to State Treasurer Goldberg, Massachusetts has nearly $16 billion in cash in the bank, including nearly $7 billion in the rainy-day fund. Well, it’s raining!”

Hubschman added that if legislators won’t pass fuel tax relief, “the voters will do it themselves.”

Any initiative that receives the required 100,000 signatures from registered voters would appear on the November 2024 statewide ballot. If approved by voters, the binding initiative would take effect starting in 2025.

Failed legislative pursuit for relief

In March, the Massachusetts Senate shot down a proposal to suspend the fuel tax.

A Republican-led initiative called for pausing fuel tax collections through Labor Day.

Majority Democrats said they opposed the plan. They questioned whether the relief would be felt at the pump and said that any action could jeopardize the state’s bond rating.

Gov. Charlie Baker advocated for a tax holiday. At the time, the outgoing Republican governor expressed concern about how tax breaks in nearby states could “disadvantage” Massachusetts drivers. LL

More Land Line coverage of news from Massachusetts is available.