Gas tax, vehicle registration fees go up July 1
The tax increases were estimated during the legislative session to provide an extra $250 million per year for the state’s road construction and maintenance program.
Tennessee fuel taxes are generating more revenue than expected, with a rate increase scheduled to take effect Saturday, according to tax collection figures for May released by Finance Commissioner Larry Martin last week.
Overall, the state’s revenue collections for May were $53.1 million above estimates used when the state budget was adopted. Gas and diesel fuel tax collections accounted for $8.9 million of the over-collection, while most of the surplus, about $44 million, came from the state sales tax.
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The state’s current fiscal year ends Friday. Through the May collections — which actually reflect taxes paid by residents in April, then remitted to the state the next month — total over-collections were $677.6 million. Fuel tax over-collections for the fiscal year to date are $44.3 million, according to a Department of Finance and Administration news release.
The state tax on gasoline is 21.4 cents per gallon but will increase by 4 cents per gallon Saturday under a bill pushed by Gov. Bill Haslam and approved by the legislature in April. Another penny-per-gallon increase will come on July 1, 2018, and again on July 1, 2019, for a total increase of 6 cents per gallon.
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