SB 115: Alaska motor fuel tax would double in July

By
Suzanne Downing
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27
348

SB 115, sponsored by Sen. Click Bishop of Fairbanks, would raise the motor fuel tax from 8 cents to 16 cents beginning in July (and from 5 cents to 10 cents for marine fuel), a plan that would raise about $35 million for the state treasury.

The Senate Finance Committee will hear details of the plan on Monday during its scheduled meeting at 9 am. Public testimony will be heard. Introduced last year, it has no other committees of referral, and may be fast-tracked for approval this session.

Currently, the 8-cent tax is levied on diesel and gasoline purchased for highway use. Diesel and gas for marine use is taxed at 5 cents per gallon, aviation fuel is 4.7 cents per gallon, and jet fuel is 3.2 cents per gallon.

Under the proposal, the tax rate would double for highway and marine fuels, but not increase for aviation or jet fuels.

The state fuel tax is levied in addition to any local sales taxes. The State has a refined fuel surcharge of .95 cents per gallon, appling to refined fuel when it is first sold, transferred, or used in Alaska.

Alaska’s fuel tax rate was enacted in 1970 and has remained unchanged, which means it has lost 82 percent of its purchasing power, Bishop notes. With the proposed increase, Alaska would still have the lowest marine fuel tax in the nation, but instead of the lowest gas tax, it would be the third lowest.

According to a recent report by the American Petroleum Institute, the national average for state motor fuel tax is 25.01 cents for gasoline and 25.86 cents for diesel.

The additional revenue for the State would be placed into the General Fund, but directed to a specific account. AS 43.40.010 directs taxes levied on fuel for a) watercraft, b) road vehicles, and c) off-road vehicles be deposited into three separate accounts that are designated for water and harbor facilities, maintenance of highways and construction of highway projects, and trails and shelter construction and maintenance.

EXEMPTIONS

Exempt from the tax is fuel sold to heat private homes or commercial buildings; for use by federal, state and local government agencies, and charitable institutions; for sale or transfer between qualified dealers; for use in foreign flights (jet fuel), and exports; and for fuel sold as bunker fuel (residual fuel oil or #6 fuel oil).

Motor fuel for off-road use (other than fuel used for aviation or watercraft) is eligible for a partial refund of 6 cents per gallon. Refund claims must be submitted within one year of the date of purchase.

27 COMMENTS

  1. All the various layers of our government make more money off of oil and oil products than the oil companies. How many times is a gallon of gas taxed before it ends up being used for the purpose it was designed for?

  2. Every legislator seems to love to find ways to indcrease or add taxes…..I want to hear about new ways go control spending and reduce the need for additional taxes..

  4. Again another legislator out of touch with his constituents. Alaska has the highest cost of living in the USA. Again no real economic plan for Democrats and rinos. Just tax them is their strategy to raise revenue. I guess they arent paying attention to all the folks leaving Alaska.

  5. Taxes are willing gifts of free men, meaning the payer of said tax has a choice whether to pay the tax or not, unlike an income tax.
    User fees, like the tax described here, are not always a bad thing, if they are applied properly. Infrastructure helps encourage industry.

    • Not when it comes to a fuel tax. Like it or not, the vast majority of voting-age people have to buy fuel. So this tax is not a willing gift.

    • “…if they are applied properly.” That’s the funniest thing I’ve read today. There is not now, nor will there ever be, an “applied properly” tax when politicians are involved.
      .
      Not all taxes are “willing gifts”. People who buy tampons are not enjoying that “free men” gift while paying sales tax. Should they just choose to bleed out to avoid that sales tax? Same with user fees. Why should people who still rely on hunting and fishing for survival pay user fees? Those hunting/fishing licenses certainly can’t be seen as “willing gifts of free men” when they have to choose between feeding their family or starving.
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      If you want to pay sales tax, tax your income, and/or have a lower PFD, then by all means, please send a giant check to the state. Not everyone has the income (or health or even willingness) to continue to pay into the giant black hole known as Alaska’s Government. I think all taxation should be voluntary, not foisted upon us by politicians who don’t have a good track history of properly using funds.

    • OTA,
      Try not paying your property tax, income tax, fuel tax, sales tax, etc.. See where that takes you. Taxes are not gifts of free men. Taxes are mostly a burden for productive citizens to bear. Not everyone is subjected to the full gamut of taxation. Some are “exempt”, for whatever reason. Others don’t pay taxes because the nanny state system takes from productive citizens and gives to those others too lazy to work and/or are manipulative of the system. There is much double, even triple (or more) taxation. When a worker makes a dollar, there is immediately about 30-35% taken from their check. Then comes sales tax, gas tax, property tax and myriad other “taxes” from what’s left. If the worker makes the money back, they’re taxed again and again and again. All those assorted taxes add up to more than the worker is allowed to keep. Liberals seem intent on destroying the standard of living in Alaska for anyone not a “public” employee. I’ve been in Alaska all but four years of my life. I never intended to leave. I still don’t but may have to, if the cost of living here keeps escalating. Fixed income and all. Sooner or later the liberal politicians will break all of us, given their thirst for other peoples’ money. Voting could fix that. If it’s not fixed, woe be unto us all in Alaska.

  6. Before long we will be paying (becoming) California, with $5 /gallon gas prices. This is sure to hurt the commuters, those on fixed incomes, and prime summer travel time for RVers. Seriously, I say let’s just tax the politicians.

  7. Click must have friends with planes. Why are they not included in this unnecessary tax? Cut the waste and live with the billions you already get. Clean up the welfare mess and spend like your life depends on it not like a drunken sailor.

  8. Doubling the motor-fuel tax, seizing PFD’s, imposing sales, income, and education-industry taxes on productive Alaskans makes sense.
    .
    If our news media is to be believed, most of Alaska’s lobbyist-legislator team act like Democrats in what they say and do.
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    So, it seems reasonable to expect Democrats, open and closeted, can’t allow economic recovery, much less prosperity, to happen under GOP governorship, especially a Dunleavy governorship, especially if they want to retain control over committees and money.
    .
    If Democrats don’t want to follow their national counterparts into gibbering irrelevancy, they have to maintain their hold over productive Alaskans by bombarding them with baloney about how badly off the state is financially… how every aspect of life will get worse if government doesn’t get more money.
    .
    Think about this absurdity, “…a plan that would raise about $35 million for the state treasury.”
    .
    …then ask how long our lobbyist-legislator team will need to burn through $35 million; who in his right mind believes $35 million will, forever and always, go only where Peoples Imperial State Senator Bishop dictates it will go.
    .
    But productive Alaskans are grateful because Peoples Imperial State Senator Bishop understands the motor-fuel tax is among the lowest nationwide and in His wisdom, decided the tax will not (for now) be raised to parity with the highest nationwide, plus all important groups are exempted.

  9. Darwin Peterson, an aide to Bishop, told the Senate Finance Committee on Monday that a committee substitute version of the bill would also increase fees to register electric vehicles and hybrids.
    Around 28,000 Alaska vehicles are estimated to be electric and their owners currently pay no motor fuels tax. The number of electric cars in Alaska is also estimated to rise to 10% of the state’s total number of vehicles by 2025.
    The concern is that as electric vehicle use increases motor fuels tax revenue would decline. At the same time, wear and tear on the state’s roads would stay the same.
    Most Alaskans currently pay $100 per year to have their vehicles registered.
    The committee substitute version of SB 115 would see electric vehicle owners pay an additional $50 per year in registration costs. Hybrid vehicle owners would pay an additional $25 per year. Pay attention: if people stop drinking and smoking they will still want that sin tax money.

  10. Where does the estimate of 28,000 electric vehicles in Alaska come from? Seems to be an astronomically high estimate.

  11. Thank you all for commenting on my comment! My point is this unlike an Internal Tax a tax upon any item gives the consumer or tax payer a choice.
    For example, don’t want to pay a fuel tax? Ride your bike or buy an electric car. I was amused by the sales tax tampon comment. It made me wonder what exactly did women use prior to such inventions?
    BTY fuel tax collected by the State helps build Roads, Bridges and Docks. The people using this infrastructure pay for their use. Are you unwilling to pay for your paved roads? Just wondering…

    • Just don’t want to pay for all the fluff and union wages and management and waste and study’s and well you get the point maybe or do we need to have a study ?

    • Yes. Unwilling to pay whatever Alaska’s lobbyist-legislator-contractor racket demands.
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      Why? Productive Alaskans seem forced into subsidizing roads which cost whatever contractors and lobbyists say they cost.
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      Nothing resembling transparency appears in Alaska’s road construction or maintenance pricing.
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      Productive Alaskans have no government watchdog to assure road construction contracts, practices, materials, or costs are conducted properly and economically.
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      But why should the road-construction industry be singled out for accountability? No other state government-lobbyist-industry enterprise seems accountable to productive Alaskans for anything.
      .
      For now, we’re stuck with what looks like yet another racket; another industry that’ll get what it wants, because they bought legislators to make it happen, their union partners want it, road-building costs, union pay raises get “negotiated” so nobody important will be out of pocket come tax time, so what’s not to like?
      .
      We have a lobbyist-legislator team intent on doing what its buyers paid it to do, which is leaning on customers for more money, not even offering decent lies to cover up what they’re going to do with the take!
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      We have enormous parasites like the Alaska Municipal League who support the Bishoptax because Alaska Municipal League exists to get more money for government.
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      That’s the Alaska Municipal League with $634,388,352.27 of taxpayers’ money stashed out of taxpayers’ reach in its “Investment Pool”.
      .
      Then there’s The Choice… remember when Anchorage taxpayers were generously allowed to choose between law enforcement and snow removal?
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      Yes, “unwilling” is good… for starters.

  12. Morrigan
    I agree with your comments in part.
    However it is important to remember what a Government is to provide. Roads are certainly part of that equation. Fuel taxes help fund infrastructure.

    Please remember that Infrastructure Projects are bid by Companies in a very competitive manner. Some companies hire Union workers others do not. Also since the Federal Government owns so much of Alaska it pays up to 90% of Highway projects.
    Money spent on infrastructure is seldom a bad investment.

  13. If I recall correctly Anchorage tax payers were once asked to decide between flowers and law enforcement, they chose flowers.

  15. To reply to Mark further up. As a matter of fact, Click’s cousin, Dianna Merry has a plane, and was involved back in the day with a flying academy. They fly to their village often. So-yes, there are relatives in his midst that will stand to benefit. Dianna doesn’t fly as much -but their friends and other relatives do. Keep repeating, Clickety Clack We don’t want you back. Click has to gooooooo, yesterday even. And let’s get real, how much are we gonna make in revenue? Not enough to piss is a broken coffee cup. Cutting spending, is the only way – but Von Ripoff, Poison Ivy, and others are so convoluted into the “we are on boards of many special interests, so lets just use the PFD savings account” to fund them. I would like to hear more about the conflict of interest that an earlier person posted about Click. Maybe a new “must read”?????

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