SPECIAL REPORT: Senator seeks temporary reduction in diesel tax

| 4/23/2008

Wednesday, April 23, 2008 – Diesel users pay 6 cents more per gallon than gasoline users in federal taxes at the pump. That could all change if a bill introduced in the Senate is passed into law.

Sen. Olympia Snowe, R-ME, introduced the “Diesel Tax Parity Act,” on Monday, April 21. The bill seeks to drop the federal diesel tax to 18.3 cents per gallon through the end of 2008.

Currently, 24.3 cents on the gallon are collected in federal fuel taxes on diesel.

Diesel prices have reached record after record and are now averaging nearly $1.30 a gallon more than this time last year.

“The dramatic rise in fuel costs has resulted in lobstermen and truckers (going) out of business – thereby endangering Maine’s most prosperous industries,” Snowe stated in a press release on the bill’s introduction. “One way to immediately alleviate this burden is to lower the diesel tax to make it proportional and equal to the gas tax.”

The bill outlines the procedures for implementing and rescinding the fuel tax reduction, with the rebates and credits being handled at the distributor level.

Truckers and other diesel users will get the 6 cents per gallon federal tax break at the pump with no paperwork hassle.

“Our trucking industry and small businesses are in a crisis and drastic steps need to be undertaken by Congress. The situation for Maine’s trucking industry is simply untenable and we need immediate action to lower the price of fuel for small businesses that are impacted by these historic costs,” Snowe said in the press release.

The bill has been assigned to the Senate Committee on Finance.