Truckers and others will start paying a bit more in tax next week to the state of New Hampshire.
Starting Tuesday, July 1, the state’s excise tax on fuel will increase for the first time since 1991. Specifically, the 18-cent-per-gallon tax rate will increase by 4.2 cents to 22.2 cents per gallon.
Despite the price bump, the state tax rate remains the lowest in New England. The next lowest is Massachusetts’ 24-cent-per-gallon tax rate.
Gov. Maggie Hassan signed a bill into law this spring authorizing the tax increase. She called it the most significant state-level investment in transportation infrastructure in more than two decades.
“This legislation is an important step toward addressing our transportation needs, keeping New Hampshire’s economy moving forward by advancing critical roads and bridge projects, finishing the long-overdue expansion of I-93 and improving commutes for our workers and visitors,” Hassan stated in prepared remarks.
The tax will raise an estimated $32 million annually – about $588 million over 20 years – for transportation work.
Funding to fix and maintain state and local highways and bridges will be increased for two years. Afterward, about half the proceeds will be used to pay off $200 million in borrowing to widen Interstate 93 from Salem to Manchester.
In addition, the state Department of Transportation will end toll collection at Exit 12 on the Everett Turnpike in Merrimack. The move will cost the state an estimated $600,000.
The tax increase is slated to be repealed once bonds for the I-93 project are paid off in about 20 years.
The New Hampshire Motor Transport Association opposed the tax increase estimating it would cost truckers $750 more in annual expenses. Instead, NHMTA President Bob Sculley encouraged lawmakers to better prioritize existing revenues.
Additional fuel tax revenue could soon come from owners of alternative fuel vehicles. A bill headed to the governor’s desk, HB1142, would extend collection of the new 22.2-cent-per-gallon rate to vehicles that use such alternative fuels as compressed natural gas, liquefied natural gas or propane.
Rep. Candace Bouchard, D-Concord, said she is pursuing the tax “for fairness.”
“All vehicles using the state’s roads and bridges should pay the road toll – the gas tax – regardless of fuel source,” Bouchard said during a previous hearing on the bill.
She noted the tax would mostly apply to commercial and government fleets making the switch to natural gas and propane.