Motor Fuel Tax News April 2021
State Motor Fuel Tax Update April 2021
Michigan: Sales and Use Tax: Prepaid Fuel Rates Announced - Apr. 7, 2021
Michigan’s prepaid sales tax rate on fuel remains have been announced. From May 1, 2021 through May 31, 2021, the prepaid rate for gasoline increases to 14.1 cents per gallon. The prepaid rate for diesel fuel increases to 15.7 cents per gallon.
Pennsylvania: Governor Commits to Phasing Out Gas Tax
Pennsylvania Gov. Tom Wolf has reiterated his commitment to phase out Pennsylvania’s gas tax, which is becoming an unreliable source for funding Pennsylvania’s vast transportation network. To make this possible and to address the state’s transportation funding needs, the governor has also signed Executive Order 2021-02 establishing the Transportation Revenue Options Commission, which will develop comprehensive funding recommendations for Pennsylvania’s large and aging infrastructure. In 2019, the Transportation Advisory Committee identified major risks to transportation funding such as reduced fuel revenues, unpredictable federal funding, and legislative changes to reduce commitments. As more fuel-efficient cars and technologies are created, reliance on the gas tax for state revenue is less and less dependable. Any phase out of the gas tax will need to be coupled with new or replacement revenue. The Transportation Revenue Options Commission is comprised of transportation, economic, and community stakeholders from both the public and private sectors, including majority and minority leaders from the House and Senate Transportation and Appropriations committees. The commission will have its first meeting by March 25 and a report of commission activities and funding options will be submitted to the Governor before August 1, 2021.
Illinois: Lake County Imposes Local County Motor Fuel Tax
Effective July 1, 2021, Lake County, Illinois, imposes a 4 cents per gallon local county motor fuel tax.
New Jersey: Petroleum Products Gross Receipt Tax Rate Unchanged - Mar. 3, 2021
The New Jersey petroleum products gross receipt tax rates on the following remain as indicated for the period April 1 through June 30, 2021:
gasoline and LPG 40.2 cents per gallon;
diesel 44.2 cents per gallon;
fuel oil 12.4 cents per gallon;
aviation fuel 4 cents per gallon; and
other 7% of gross receipts.
Indiana: Taxpayer’s Good Faith No Defense to IFTA Taxes Abatement - Feb. 23, 2021
In a letter ruling, the Indiana Department of Revenue (department) determined that it could not abate either International Fuel Tax Agreement (IFTA) taxes or International Registration Plan (IRP) fees based on the good faith intention of a taxpayer. In this matter, the taxpayer was a multi-state motor carrier. The department assessed IFTA excise taxes, IRP fees, interest, and penalty upon finding the taxpayer’s records inadequate.
The taxpayer asserted that it relied on the Rand McNally software program to maintain its records. Although the department recognized the taxpayer’s apparent good faith intention to properly maintain the records on an ongoing basis, it had no authority to abate taxes or fees based on those reasons. The department was required to adjust assessments only if the affected taxpayer could show that the assessment is "wrong," which the taxpayer failed to do.
Accordingly, the taxpayer’s protest was denied.