Montana law nixes Missoula County local gas tax
May 28, 2021
A local gas tax in place in Missoula County has been voided by the Montana Legislature and the governor.
Less than a year after voters in Missoula approved a local gas tax to provide funding for local transportation work, Gov. Greg Gianforte has signed into law a bill to repeal the tax increase.
Previously HB464, the new law repeals the 2-cent local excise tax on gas purchases in place since last September. Diesel fuel was excluded from the increase.
Missoula officials pleaded with state lawmakers and the governor to leave the local tax intact. They referred to the legislation as an “overreach” by the state.
Local officials said without the tax they will be forced to consider increasing property taxes to fill the estimated $1.1 million void in annual revenue for the county and the city of Missoula.
Missoula County Commissioner Dave Strohmaier recently told lawmakers that without the local tax the other option would be to do nothing at all for roads.
Critics of the gas tax increase said it is the wrong time to impose more tax on motorists. Others have said Missoula should take steps to better manage revenues already available.
Rep. Matt Regier, R-Kalispell, argued the tax hit low income earners hardest.
“The gas tax might be no big deal for $100,000 a year earners, but for the low-income people it is a big deal,” Regier told the Senate Transportation Committee.
To make matters worse, critics have said the local tax amounted to simply piling on when you take into consideration the recent statewide fuel tax rate increases.
Most recent fuel rate increase
The Montana Legislature approved a fuel tax increase four 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.
Over the same time, the state’s diesel rate has increased by about 1.5 cents to 29.45 cents. Another one-half cent increase will be implemented over three years. LL