Missouri legislation would alter fuel tax rate

Fuel tax rate increases have been a regular occurrence in Missouri in recent years. Multiple bills at the statehouse would at least temporarily delay future rate increases.

A 2021 state law authorized an increase to the then-17-cent fuel tax over multiple years. Since then, the excise tax on gas and diesel purchases has been raised four times at 2.5-cent increments to 27 cents.

The final 2.5-cent increase is scheduled to take effect July 1. At that time, the fuel tax rate will reach 29.5 cents.

Fuel tax increase repeal

One Senate bill would repeal the fuel tax increases and return the rate for gas and diesel to 17 cents.

Sponsored by Sen. Nick Schroer, R-Defiance, SB494 would also eliminate the upcoming 2.5-cent rate increase.

Supporters have said the state should relieve some tax burden on Missourians because roads are in good shape.

The Missouri Department of Transportation has indicated that $14.6 billion will be spent over five years on state infrastructure. Federal appropriations will be tapped to help cover costs.

Government efficiency tie-in to fuel tax collection

House Transportation Committee Chair Josh Hurlbert, R-Smithville, is behind another bill that could result in regular fuel tax rate changes.

HB572 would require MoDOT to include in its annual report to the governor and lieutenant governor all of the agency’s internal and external expenditures.

For each fiscal year the department’s internal expenditures exceed 18% of its total expenditures, the bill would mandate the state’s fuel tax rate be reduced by one penny for the following fiscal year.

The rate could be decreased by a maximum amount of 5 cents below the 29.5-cent rate slated to take effect this summer.

In any fiscal year following a rate reduction, if the department’s internal expenditures are below 18% of total expenditures, the fuel tax rate would be increased by a penny, or up to 29.5 cents, whichever is less, in the following fiscal year.

Hurlbert said Missouri’s infrastructure is at an important crossroads. He highlighted multiple major projects that have wrapped up and a $2.8 billion project to expand Interstate 70 to six lanes across the state.

“Never have we entrusted the Department of Transportation with this level of investment,” Hurlbert said in prepared remarks. “It’s important to Missouri taxpayers that we ensure MoDOT is returning that trust by spending their funds efficiently and providing the services Missourians demand.”

𝗥𝗘𝗟𝗘𝗔𝗦𝗘: 𝗛𝘂𝗿𝗹𝗯𝗲𝗿𝘁 𝗦𝗲𝗹𝗲𝗰𝘁𝗲𝗱 𝘁𝗼 𝗖𝗵𝗮𝗶𝗿 𝗖𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗲 𝗼𝗻 𝗧𝗿𝗮𝗻𝘀𝗽𝗼𝗿𝘁𝗮𝘁𝗶𝗼𝗻
JEFFERSON CITY, Mo. – Missouri State @RepJoshHurlbert (R-Smithville) has been selected to serve as Chairman of the Committee on Transportation #moleg pic.twitter.com/zizz53OhsI

— Rep. Josh Hurlbert (@RepJoshHurlbert) January 16, 2025

Where the money goes

Revenue from the 27-cent fuel tax rate is divvied up between the state DOT, counties and cities.

According to the agency, MoDOT receives 19.45 cents of the excise rate, while counties collect 3.50 cents and cities get the remaining 4.05 cents.

Each cent of additional fuel tax results in about $29 million for MoDOT and $12.6 million for counties and cities.

State funds go toward the Fiscal Year 2024-2028 Statewide Transportation Improvement Program.

Missouri truckers wait for relief option

The four-year-old law includes a fuel tax rebate program for most residents.

Missouri taxpayers are permitted to be refunded for the additional fuel tax collection. Refunds, however, are limited to owners of vehicles weighing up to 26,000 pounds.

Previous attempts at the statehouse to extend the refund option to Missouri-based truck operations have been unsuccessful. LL

More Land Line coverage of Missouri news is available.