Tennessee GOP pushes governor to suspend fuel tax

| 9/15/2005

Tennessee has joined the growing list of states with lawmakers pursuing efforts to cut the cost of fuel in the aftermath of Hurricane Katrina.

Some Republican state lawmakers are urging Gov. Phil Bredesen to temporarily suspend the state’s per gallon tax on gasoline and diesel fuel to give consumers a break at the pump. The state tax on diesel is 17 cents per gallon and 21.4 cents per gallon on gasoline.

The status of IFTA requirements for miles driven in Tennessee was not addressed in the Republicans’ letter, so even if the tax is suspended at the pump, truckers could end up owing it at the end of the quarter when they file their International Fuel Tax Agreement paperwork and payments.

In their letter to Bredesen, the legislators wrote: “There are several reserve funds, which can be used to make up for this temporary tax loss. Further, the cessation of gas tax collection will not terminate the functionality of any government entity.”

Republicans estimate a tax suspension for one month would cost the state about $51 million, The Tennessean reported. Most of that money goes for state and local roadwork.

Bredesen, a Democrat, said he thinks it’s a bad idea to drop Tennessee’s per gallon tax on fuel and that price decreases are already being seen.

The lawmakers’ letter follows action by Georgia Gov. Sonny Perdue to issue a month-long moratorium on the state’s per gallon tax on gasoline and diesel fuel. It also includes a suspension of Georgia’s 4 percent sales tax on fuel until the end of September. The tax breaks will cost the state about $75 million in tax revenue.

The Georgia governor and legislators also took action to temporarily remove the IFTA obligation for Georgia miles driven by truckers. Truckers driving through Georgia during the tax holiday will still have to report their IFTA miles, but they won’t owe any tax on miles driver during that period.

Other states considering fuel cost relief actions include:

  • Wisconsin Republicans are pushing a plan to give residents a fuel tax holiday for the rest of the year. Instead, Democratic Gov. Jim Doyle wants to repeal the state’s minimum markup requirement for diesel and gasoline.
  • A New Jersey lawmaker is considering legislation that would limit the wholesale price of diesel fuel and gasoline.
  • Pennsylvania Gov. Ed Rendell said he may ask state lawmakers to temporarily lift the state’s per-gallon fuel tax.
  • Democrats in the Missouri House want a two-week fuel tax holiday that would cut the state’s 17-cent-a-gallon tax on diesel and gasoline to 7 cents a gallon.
  • An Oklahoma lawmaker is calling for the suspension of motor fuel taxes in the state for the final three months of the year.
  • New Mexico Gov. Bill Richardson has rejected calls from some Republicans in the state to offer a fuel tax holiday. Instead, the Democratic governor is pushing a price gouging law.
  • Gov. Joe Manchin III has vowed to freeze fuel taxes for one year in West Virginia. Manchin announced plans to sign an executive order to stop the scheduled increase, which was expected to take effect on Jan. 1, 2006.

– By Keith Goble, state legislative editor