Diesel fuel tax bills introduced in Michigan

| 2/28/2002

The Michigan House Committee on Transportation is considering a package of four bills affecting diesel fuel taxes.

HB5735, sponsored by Rep. Doug Hart, would amend the Motor Fuel Tax Act to impose a tax on diesel fuel imported into or sold, delivered or used in the state. The tax would be 15 cents per gallon through Sept. 30, 2002, and 19 cents per gallon beginning Oct. 1, 2002. The bill also charges the tax on all liquefied petroleum gas used in the state.

HB5734, sponsored by Rep. Keith Stallworth, would require licensed motor carriers to pay a road tax calculated on the amount of motor fuel consumed on public roads or highways. Beginning Oct. 1, 2002, the tax would be 19 cents per gallon. Currently, the tax rate is 21 cents per gallon with a 6 cent per gallon credit. This bill eliminates the 6 cent per gallon credit.

HB5736, sponsored by Rep. Larry Julian, would amend the Use Tax Act to impose a diesel fuel use tax on interstate motor carriers. Currently, the law levies a tax for the privilege of using, storing or consuming tangible personal property. The tax is figured as 6 percent of the price of the property or services being taxed. The bill would change the act, effective Oct. 1, 2002, to apply the tax to diesel fuel used by interstate motor carriers. The price previously figured the 6-percent tax would be the statewide average retail price of a gallon of self-serve diesel fuel as determined and certified quarterly by the department, rounded up to the nearest .01 of 1 cent. The tax would be collected under the International Fuel Tax Agreement (IFTA). The carrier would be allowed a 6 percent credit on diesel fuel purchased in the state.

HB5733, sponsored by Rep. Judson Gilbert II, would amend the Michigan Transportation Fund Act and reallocate funds collected under the Motor Fuel Tax Act and the Motor Carrier Fuel Tax Act.

All four bills were introduced Feb. 21 and referred to the transportation committee.