Missoula County, Mont., implements local gas tax

September 22, 2020

Keith Goble


Fuel stations in Missoula County, Mont., now are collecting some additional gas tax at the fuel pump.

In June, voters in the state’s second-largest county decided to tax themselves more to provide a boost to local transportation work. The question was approved by a 51-49% margin.

As a result, a 2-cent local excise tax on gas purchases was greenlighted. Diesel fuel is excluded from the increase.

Implementation of the gas tax began this past week.

Revenue for roads

The gas tax increase is estimated to raise $1.1 million annually largely for road construction, maintenance and repairs. A portion will be used to reimburse retail sellers.

The county now relies largely on local property taxes to foot the expense for road maintenance. The tax collection amounts to about $750,000 yearly.

It is estimated that about 40% of the revenue raised from the gas tax will come from visitors.

Still more needed

County officials say the new revenue source will help cover costs that include equipment maintenance and pavement work.

Despite the revenue boost, the county treasurer’s office adds that the county still is far short of revenue needed to keep roads in good condition. The total price tag to fully meet those needs is between $2.5 million and $3 million.

Gas tax criticism continues

Opponents say it is “unconscionable” that county commissioners voted to put the gas tax question on the ballot at a time when residents are experiencing financial strain and hardship. Another option they would have preferred the county pursue is tax increment financing. Others have said the county should take steps to better manage revenues already available.

To make matters worse, critics have said the local gas tax is simply piling on when you take into consideration the recent statewide fuel tax rate increases.

2017 fuel tax increase

The Montana Legislature approved a fuel tax increase three years ago to eventually raise $49 million annually for state and local roadways.

The state’s gas tax rate has since increased by 5 cents to 32 cents. Another penny increase will be phased in through 2023.

Similarly, the state’s diesel tax rate has since increased by about 1.5 cents to 29.45 cents. Another one-half cent increase will be implemented over three years. LL

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