Kentucky’s tax on motor fuels is about to go up by a penny thanks to an obscure statue that provides for a temporary increase when the average wholesale price paid by fuel stations tops $1.11 per gallon over a selected month.
That price trigger happened in April, when the state average reached $1.27 a gallon for the first time since 1981.
Kentucky now collects 13.4 cents a gallon of diesel and 16.4 cents a gallon of gasoline. The increase will take effect July 1 and apply to both diesel and gasoline.
The tax rate would return to its current level in November if the wholesale price were dropped below $1.11 in July, the next specified indicator month, The Associated Press reported. It also could go higher.
The temporary increase is capped at 1 cent per fiscal year, no matter how high wholesale prices rise. But July also is the beginning of a new fiscal year.