Utah's New Years Day Surprise: Nickel Gas and Diesel Tax Increase

In his current piece, Davidson describes in more detail the state's gas tax increase history and details how the wholesale fuel sales tax works. Carlos Braceras, executive director of the Utah Department of Transportation (UDOT) indicates where state revenue goes.

Not the only transportation tax to take effect on January 1

Davidson reminds readers that In the ten counties that passed Prop 1, a quarter cent transportation sales tax measure takes effect on Friday as well.

In Davis, Weber and Tooele counties, 60 percent of the new tax money goes to cities and counties — but 40 percent goes to the Utah Transit Authority. In rural areas without a transit district, 40 percent will go to cities and 60 percent to counties.

Prop 1 passed in Carbon, Davis, Duchesne, Rich, San Juan, Sanpete, Sevier, Grand, Tooele and Weber counties. It failed in Salt Lake, Beaver, Box Elder, Juab, Morgan, Uintah and Utah counties.

The last state gas tax increase to take effect was in Washington on August 1 (seven cents of the 11.9-cent tax), the ninth state to pass a fuel tax increase in 2015. Eight are listed in that post—the ninth is listed in 'comments'.]

Interestingly, Utah was one of the three states described in a January post, "Three States Hope to Take Advantage of Low Gas Prices to Boost Gas Taxes." Iowa passed a 10-cent increase in February and Michigan was the tenth and final state to boost its gas tax this year: a 7.3-cent increase in November that takes effect in 2017. 

With gas prices projected to remain low through 2016, perhaps other states will muster the political will to take advantage of these historic low prices to pass gas taxes next year. While the additional tax may or may not show-up at the pump, as described above, there will be no uncertainty about the additional revenue for state and local transportation budgets.