So, when state Rep. Larry Sheets (R-Moulton) offered up House File 83 today, there likely was a few folks who cringed. But, while the bill alters how the state’s fuel taxes are calculated, it doesn’t raise the amount of tax Iowans will pay.
The fuel tax is currently set as a per-gallon excise tax. The tax on gasoline fuels, whether blended with ethanol or not, is 20 cents per gallon. The tax on diesel fuel is 22.5 cents per gallon.
The bill replaces the current per-gallon tax rates with a rate expressed as a percentage of the sales price. The new motor fuel tax rate established in the bill will “be a percentage of the wholesale price of a gallon of motor fuel that represents an amount per gallon that is equivalent to the amount of revenue produced by the current tax rate of 20 cents per gallon, rounded to the nearest one-half of 1 percent.”
The rates for diesel will be similarly calculated for diesel fuel, using the current tax rate of 22.5 cents per gallon, also rounded to the nearest one-half of 1 percent. The rate will be based on the wholesale price reported for the Midwest in the most recent weekly price report issued by the United States Energy Information Administration as of the effective date of the bill, if approved.
While HF 83 doesn’t specifically call for an increase in the tax, it would, however, result in more tax being paid as gas prices go up. Even if the tax rate itself was not raised, it is likely to produce a windfall when the currently rock-bottom prices at the pump begin to climb again.
There have been no lobbyist declarations on the proposed legislation yet.