More States Shift Road Repair Costs to Increased Trucking Taxation

January 20, 2015

Increased Trucking Taxation

Tennessee, ranked second only to Texas by CNBC in state road quality nationwide, is currently faced with the conundrum of growing road needs but declining fuel tax revenues. In an attempt to deal with the situation, the state is wrestling with a number of solutions for handling funding needs according to the Times Free Press. Among them: proposed taxes and fees trucking industry, about 60 percent of which utilizes Tennessee's north-south and east-west corridors, I-75 and I-40.

Increasing technology decreases fuel revenues

Tennessee isn't alone. Improved gas mileage, electric cars, and natural gas vehicles are resulting in dwindling state funds from fuel purchases nationwide.

Fueled-up surcharges

Out of state trucking firms utilizing Tennessee roadways could see a weight-distance fee and fuel surcharge, expected to collectively add $140 million a year to Tennessee's $1.8 billion transportation budget if legislation is passed. Tennessee-based firms would be able to deduct those fees from business taxes, as do firms in neighboring states.

Many states fund road repairs through trucking taxation

Surrounding states commonly collect these levies, including KY, NM, NY, and OR. The aim of Tennessee legislators is to continue providing superior highway infrastructure without overburdening state residents with taxes.

Gas and diesel fuel tax increases may also be on the horizon

Senator Ron Ramsey indicates multiple changes are necessary for a more comprehensive, long-term solution to generating transportation revenue. Gas and diesel taxes, not increased in 25 years in Tennessee, are being considered alongside trucking taxation. Fees on electric and natural gas powered vehicles, which utilize roads but are not contributing equally to funds, are being considered as well.

Will state lawmakers agree?

The future impact on the trucking industry is still unknown. The state legislative session begins January 13th, however it's unclear whether lawmakers will come to an agreement. A variety of other issues may push the decision into 2016.

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