OAKBROOK TERRACE, Ill. -- Many states are adjusting their fuel sales taxes or considering new ones as infrastructure improvements loom. Here's what's happening in several states.
- North Carolina. North Carolina's Department of Revenue announced that the state's motor fuels tax will go up 1 cent per gallon (CPG) for the first half of 2015 to reach 37.5 CPG on Jan. 1, 2015.
According to a report in The Citizen-Times, the state adjusts the fuels tax twice a year based partly on the six-month average wholesale price of gasoline and diesel. The six-month average upon which the increase is based is for the period ending Sept. 30, before the decline in gas prices fully picked up steam. It is also 17 cents higher than the previous period.
In 2013, the state legislature mandated a 37.5-cent cap for the motor fuels tax, which is expiring on June 30, 2015.
- New Jersey. While the New Jersey state legislature mulls increasing the state gas tax to help fund infrastructure repairs, it still has work to do to sell the idea to the public. According to a December poll by Rutgers University's Eagleton Center for Public Interest Polling, 56% of New Jersey residents oppose increasing the gas tax, regardless the reason. This is despite the fact that New Jersey's tax, at 15 CPG, is among the lowest in the country. An increase was supported by 41%, which is actually an improvement from previous polls.
"While not statistically significant, we may be seeing a slight uptick in generic support," said David Redlawsk, director of the Eagleton Center and a professor of political science at Rutgers. He noted that only 38% were in favor of an increase when polled in October 2014, which is seven points higher than those polled in April 2014. "Even so, most New Jerseyans simply do not want a higher gas tax."
This is despite the general agreement that the state's roads are in need of repair and the transportation fund that pays for their upkeep is broke, the pollsters noted. This could be because many New Jerseyans do not believe the state of the roads is that awful. In fact, 54% said state roads were in good or excellent condition, while 39% say the same of local roads.
"If New Jerseyans don't actually think the roads are all that bad, it is going to be a hard sell to convince them to pay more taxes to maintain them," said Redlawsk.
- Wyoming. Drivers of alternative-fuel vehicles (AFVs) in Wyoming may have to pay new taxes or fees to help support infrastructure repair, reported The Jackson Hole News & Guide. The state legislature is considering a bill that would levy a new tax on AFVs, while electric vehicles (EVs) would be hit with a separate fee.
The bill's supporters argue this would provide a greater degree of fairness to infrastructure funding, since drivers of gasoline-powered vehicles pay a 24-CPG tax when fueling up that goes toward road upkeep. Under the proposal, drivers of AFVs would pay 24 cents in tax for each gasoline gallon equivalent of alternative fuel.
State Representative Michael K. Madden (R), chairman of the Joint Revenue Interim Committee, which will sponsor the bill, said that the tax would be calculated using British Thermal Units, a measure of energy content. A gallon of gas contains 114,000 BTUs, while a gallon of biodiesel contains 118,300 BTUs and a gallon of liquid natural gas (LNG) contains 75,000 BTUs. The alternative-fuels tax would apply the 24 CPG tax on each 114,000 BTUs of common alternative fuels.
It would be levied against retailers, who would pass along the charge to consumers.
EV drivers, many of whom recharge at home, would be required to get a certificate showing they paid a tax on the electricity used to charge their vehicle. The specific amount has not yet been determined, but $50 has been suggested.
The state house of representatives will consider the alternative-fuel tax bill in the first week of its 2015 session, which begins on Jan. 1.
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