A push at the Minnesota statehouse would change how the state collects the fuel tax to pay for transportation. Another tax bill would increase the tax burden on trucking operations in the state.
Senate Transportation and Public Safety Chairman Scott Dibble, DFL-Minneapolis, offered a $5.8 billion transportation funding plan that would impose a new 5.5 percent sales tax on fuel sales at the wholesale level. Oil companies would be responsible for paying the tax.
To help offset the increase that wholesale fuel buyers are expected to pass onto truckers and others, SF1173 would reduce the current excise tax on fuel by 6 cents. The change would drop Minnesota’s fuel tax rate from 28.5 cents per gallon to 22.5 cents.
State lawmakers recently backed off efforts to increase the state’s fuel tax after Gov. Mark Dayton reiterated that he doesn’t think it’s the right time to increase the tax.
The governor’s opposition comes despite the recommendation a year ago by an advisory group he formed that the tax be increased.
Dibble said the revised tax changes would raise $225 million a year for roads and bridges.
Sales tax in the seven counties that make up the Twin Cities area would be increased by one-half cent. About $200 million annually in new revenue would be routed to transit.
The motor vehicle sales tax would also be increased from 6.5 percent to 6.875 percent. Revenue would be divided between roads and transit.
SF1173 awaits further consideration in the Senate Taxes Committee.
The panel voted to advance a separate bill – SF552 – that includes new taxes that truckers would be responsible for paying, as well as increasing other taxes.
OOIDA Member Joyce Brenny, owner of Brenny Specialized Transportation in St. Joseph, MN, testified at the statehouse. She told members of the Senate Tax Committee before the vote that truckers cannot afford to absorb new costs.
“Trucking company failures doubled in the first quarter of 2013, reaching their highest level in nearly two years,” Brenny testified. “Failures are likely to continue as costs are increasing twice as fast as revenue.”
Taxes sought by lawmakers include new 6 percent sales tax rates on labor for truck repairs and warehousing services. A new 9.4 percent income tax rate would also be created for S corporations.
Brenny told Land Line she feels that lawmakers are grasping at straws to come up with new revenue. Once again, she said that truckers are getting caught up in the whirlwind.
“It’s really difficult. Many of our government officials don’t understand the costs to keep a truck rolling.”
The bill could come up for consideration on the Senate floor as early as Monday, April 29. OOIDA encourages Minnesota truckers to communicate with their state lawmakers about the tax proposals.
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