Local Government
3:34 pm
Wed February 12, 2014

Bill to Change Utah Gas Tax Advances

A proposal to tie Utah’s gas tax to the price of fuel is heading to the state Senate for consideration. Members of the Senate Revenue and Taxation Committee voted unanimously Wednesday in support of a bill which would impose a percentage tax per gallon of gas.

Utahns currently pay 24.5 cents to the state for every gallon of gas, a tax rate set back in 1997. Senator John Valentine believes that the tax should more closely align with the price of gas – since that’s how the state pays for road construction and maintenance.

“The cost of petroleum is a major component of building the roads. So that is the reason why I feel like we need to have a closer contact between the cost of the product and the cost of the roads we build with that product,” Valentine told the Senate Revenue and Taxation Committee.

Senate Bill 60 would adjust the gas tax rate annually based on the previous year’s statewide average price of a gallon of regular unleaded fuel. If the price of gas rises over a year, then the tax would increase accordingly the next year. The bill also sets a base rate, so it would never drop lower than it is now.  Valentine estimates that if this policy had been in place since 1997, then the state would have generated about 280 million dollars for roads over that time. Brent Gardner of the Utah Association of Counties spoke in favor of the bill.

“The entities that I represent, the counties, are putting nearly 60 percent of their highway budgets in from property taxes. That means people that own property in 29 counties are paying the majority of the cost for maintaining county roads. Our organization believes that it’s a better policy to shift as much of that onto the user of the roads,” Gardner said.   

No one in the committee meeting spoke against the bill. It now heads to the full Senate for consideration.