Voters in another Nevada county will decide on local diesel tax

October 12, 2021

Keith Goble

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Voters in one Nevada county will decide next fall whether to become the state’s fourth locale to take advantage of a 2-year-old state law to permit collection of a local tax on diesel.

Commissioners in Nye County have voted unanimously to put a question on the fall 2022 ballot to decide whether to implement a nickel tax on diesel for local projects.

Currently, none of the state diesel tax on purchases within the county stays local.

Advocates in the county located directly northwest of Las Vegas say implementation of a local tax on diesel would aid the county address a streets and highways budget of $4.25 million. They add that the amount is not enough to keep pace with necessary maintenance, rebuilding and major repair projects estimated at $10 million.

If approved by voters on Nov. 8, 2022, the local diesel tax is estimated to raise $425,000 annually.

State authorization of diesel tax

A 2019 state law authorizes county commissions in counties with fewer than 100,000 people to add a tax of up to 5 cents per gallon on diesel purchases. Authorization also is included for certain cities.

Red diesel used for mining and agriculture is exempt from the tax.

The 2-year-old law enables 15 of the state’s 17 counties to charge more at the pump. The other two counties – Clark and Washoe – already are allowed to collect extra tax on diesel. All other counties in the state can charge a nickel tax on gas.

County commissions first must pass an ordinance with two-thirds majority to implement the extra tax. Another option is for a majority of voters to approve a question during a general election.

Additional diesel revenue raised in rural counties is required to be used for local road construction and maintenance. A portion of tax collections (up to 10%) is routed to the Nevada Department of Transportation. The affected revenue must be used to construct, maintain or repair truck parking in locales collecting the tax.

Below is a list of counties already to implement the local diesel tax.

Churchill County

Churchill County, Nev., commissioners voted last fall to adopt a plan to collect a nickel on each gallon of diesel sold in the county.

County officials have said that more money is needed because the cost to construct and maintain roads has steadily increased through the years while revenues received from gas tax collection has dipped about 6.5% since 2004. There has been no local tax collection on diesel fuel sales.

The county located east of Reno estimates the diesel tax will raise about $299,000 yearly – about 35% more over current revenues. The bulk of the tax revenue is slotted to improve roads and bridges within the city of Fallon and the county. Revenue slotted to aid truck parking will total up to $30,000 annually.

The tax went into effect on Feb. 1, 2021.

Lyon County

The first locale in the state to adopt the five-cent diesel tax was neighboring Lyon County.

In spring 2020, county commissioners approved the tax. Tax collection began shortly thereafter.

The county diesel tax raises about $2.5 million annually for roads within Lyon County, and the cities of Fernley and Yerington. Truck facilities in the area receive up to $250,000 per year.

Commissioner Joe Hastings noted at the time of passage the county was about $30 million behind in road repairs for 840 miles of roads.

Carson City

The Board of Supervisors in the state’s capital city also acted last year to approve an ordinance authorizing collection of the diesel tax.

Since Aug. 1, 2020, in Carson City, diesel fuel purchases include a nickel per-gallon tax. The tax is estimated to raise about $400,000 per year for roads and truck parking.

A sunset is included in the ordinance. In 2022, a question will be included on the local ballot about whether to continue collection of the tax. LL

More Land Line coverage of news from Nevada is available.

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Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.