CT diesel fuel taxes climb for the second year in a row
Truck drivers and other motorists who buy diesel fuel in Connecticut began paying an extra 2.6 cents per gallon this week — their second increase in two summers.
The Department of Revenue Services set the new rate on July 1 at 46.5 cents per gallon, up from 43.9 cents one year ago and from 41.7 cents in 2017.
The new rate is still down more than eight cents from 2013, when the diesel tax peaked at 54.9 cents per gallon.
Connecticut adjusts the diesel rate annually following a complicated formula enacted by the legislature in 2008. The principal factor used to calculate the new rate involves an analysis of wholesale prices for diesel fuel and regular gasoline during the prior 12 months.
The head of the state’s largest trucking association said the tax increase over the past two years is a concern.
“Right now the diesel tax is significantly higher than the (regular) per-gallon gasoline tax,” said Joe Sculley, president of the Motor Transport Association of Connecticut, which represents more than 800 trucking and trucking-related businesses. “Members have noticed that.”
Connecticut imposes a flat, 25-cents-per-gallon retail tax on gasoline, but consumers of regular gasoline effectively pay two state fuel taxes each time fill their vehicles. And once the second levy is considered, the burden is almost identical to that paid by diesel consumers.
That’s because Connecticut also imposes an 8.1 percent tax on wholesale transactions involving regular gasoline and some other fuels. Another surcharge effectively raises that tax to 8.81 percent. Gasoline station owners then routinely build this cost into the base price they charge motorists at the pump.
According to the Connecticut Energy Marketers Association, which represents hundreds of gasoline distributors and home heating oil dealers, the wholesale levy currently adds another 17 cents to the price of gasoline.
Coupled with the 25-cents-per-gallon retail tax, this means Connecticut currently collects almost 42 cents on each gallon of regular gasoline sold to motorists.
Sculley said his group is not pressing for a new diesel tax methodology right now, though it continues to monitor it closely. “I think the system is still OK because it changes only once per year,” he said.
Connecticut’s diesel tax is well below the U.S. average of about 62 cents per gallon, according to the American Petroleum Institute.
The diesel tax raised $109 million for Connecticut in the 2018 fiscal year — the last full year for which complete tax data is available, according to the Department of Revenue Services.
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