Diesel Fuel Prices and Gas Prices Continue to Rise but Governor Wants Tax Increase on Fleet Fueling

As we are all worried about diesel fuel prices and gas prices going higher Maryland Gov. Martin O’Malley (D) has sent the legislature his proposal for imposing the state’s 6% sales tax on all motor fuel purchases — a plan that based on today’s prices could add nearly $40 in taxes every time a trucker fills up.

It always seems the easiest way to get more money is hit the trucking world with higher diesel fuel taxes.

The sales tax would be phased in at 2% over each of the coming three years, and would be applied to the total purchase price minus the cost of state and federal fuel taxes.

However, the sales tax would not be based on diesel’s pump price. Rather, for tax purposes, the state would calculate an average fuel price every six months based on the previous six months’ average price for regular unleaded gasoline.

Using one fuel on which to calculate the average price “simplifies” the tax plan, O’Malley said in his proposal.

I am not saying that the state of Maryland or the country doesn’t need to raise taxes on diesel fuel and gas but pick your spots.

First all fleet fuels should not have a sales tax on them. It is not a win/win. When diesel fuel prices go higher, so does your tax when it’s on a percentage sales tax basis. The opposite occurs when diesel fuel or gas prices go down. Fleet fuel should be on a cents per gallon basis at least now. We might need to change that in the future as we have more hybrid vehicles on the road and electric vehicles. Hey, after all those vehicles put as much wear and tear on the roads as a car that is not as efficient so they are actually getting more use of the roads then others.

We will hold of on hold the fuel management and tax management should be on those vehicles for another time. For now, if you want to keep things simple a couple of things have to happen. The first is pass legislation on an increase in fuel tax. The key is that the tax can’t start until fleet fueling prices are under a certain level. Don’t kick people when some are saying gas prices can go to $5.00 a gallon.

Have something like when gas prices are under $3.25 a gallon the tax starts the beginning of the next month. You raise diesel fuel taxes and gas taxes 5 cents per gallon. I know it hurts but so do our roads and bridges. If spent properly it will lead to more jobs and better roads. Then each year on January 1^st these taxes increase by 1 or 2 cents per gallon. That is easy to calculate, everyone knows its coming and it helps provide the money needed to improve our American infrastructure.

Yes, for all of us that means we pay more or do we? Think about the way your suspension, tires and loads on your truck take every time you hit a pot hole. What if they take that money and roads are widen, so traffic no longer becomes an issue for your deliveries. Would those extra couple of cents really be costing your company more money or would it be helping your company improve its bottom line.

Let’s not go crazy, this needs to happen in stages but it needs to happen or we will all be driving on gravel soon.