State Laws Newsletter Mastheadfinal

Three More States Raise Fuel Taxes

By Robert C. Pitcher
American Trucking Associations

When California raised its fuel taxes by legislation last month, it was the only state to have done so this year.  No longer: In short order, Indiana, Montana, and Tennessee have raised their fuel taxes too.  In Indiana, the legislation, signed by Governor Holcomb on April 26, is H.B. 1002.  It raises the diesel fuel tax by 20 cents a gallon, and indexes the tax for the future, with a two-cent cap per year on increases due to the index.  The gasoline tax goes up by 10 cents, and is similarly indexed.  The existing 11-cent surtax for motor carriers is retained, but loses its nature as a surtax by being moved to the pump, where it will be paid at time of purchase.  This change should improve enforcement considerably.  Truck registration fees will increase by 25 percent, but a new $100 per vehicle fee was dropped from the bill.  Finally, all local wheel taxes in Indiana are to be apportioned by fleet mileage.  The initial changes under the new law take effect July 1 this year.  ATA worked closely with the Indiana Motor Truck Association to help get this bill enacted.  The increases may be steep, but there are good things for the industry in this bill, few bad ones, and Indiana should have highway money in plenty for some time.  In Montana, Governor Bullock signed the tax increase on May 3, per H.B. 473.  The increase there will be phased in over several years, with an initial jump of 4.5 cents a gallon on gasoline on July 1 this year, and an increase of 1.5 cents on diesel.  Ultimately, by July 2022, the total increase will be 6 cents on gasoline and 2 cents on diesel.  And in Tennessee, where Governor Haslam signed H. 534 on April 27, the increases will also be phased in.  On July 1 this year, the tax rate on gasoline will go up by 4 cents a gallon and on diesel by 3 cents, with the eventual increases totaling 6 cents on gasoline and 10 cents on diesel by July 2019.  This bill too marks the end of a long, successful campaign by the Tennessee Trucking Association for better highway funding.