Othni J. Lathram Director, Legislative Services Agency
AND WE'RE OFF!
The Gasoline Tax
March 5th marked the first day of the 2019 Regular Session of the Alabama Legislature, the start of real business for this new quadrennium. Over the next few months, we will be getting a front-row seat to how the personality of this new legislature develops and how they will tackle some of the most pressing issues facing our state. This column is being written as we are closing presession budget hearings and all indications are that this is a group who will step up and do their best over the next four years.
Normally this is the time when the legislature is most likely to attempt to tackle some of the more difficult work of the cycle and this year is no exception. Governor Ivey and legislative leadership have been making it clear for sometime that the first priority for this group would be to address the current problems facing our infrastructure in the state and the need to invest more in it.
The key funding component for our state's construction and maintenance of roads and bridges is the gasoline and motor fuel taxes. For purposes of space this article will focus on the gasoline side of that equation. The rate at which these taxes are levied was last increased in 1992. Like most taxes levied in the state, the gasoline tax is collected and distributed pursuant to a collection of constitutional and statutory provisions. In past columns I have tried to explain some of the resources our office prepares for the benefit of public officials and citizens to understand our fiscal policies and thought this subject would be a good time to publish an excerpt from one of them: A Legislator's Guide to Alabama's Taxes. This is the portion of that publication that is devoted to the gasoline tax, but the publication brings the same information to bear on all state tax streams.
I hope this information is useful not only to your understanding of this important issue as it is being discussed, but also to alerting you to the kind of information that is available on this front. The complete version of this publication is available on the Legislative Services Agency website.
Gasoline Tax (and Gasoline Portion of the Motor Carrier Fuel Tax)
■ Constitutional Provisions
Amendment No. 93 to the Constitution ofAlabamaof1901, by Amendment No. 354, now appearing as Section 111.06 of the Official Recompilation of the Constitution of Alabama of 1901
Amendment No. 93 (proclaimed ratified November 19, 1952) provided that no monies derived from any fee, excise or license tax, levied by the state, relating to (1) registration, operation or use of vehicles or (2) fuels used for propelling vehicles except pump taxes shall be expended for any purpose other than costs of construction, reconstruction, maintenance and repair of public highways and bridges, costs of highway rights of way, payment of highway obligations, the cost of traffic regulation and the expense of enforcing state traffic and motor vehicle laws. Amendment No. 354 (proclaimed ratified November 10,1976) expanded upon Amendment No. 93 to allow for the distribution of proceeds from charges for personalized license plates or tags in any manner prescribed by the legislature.
Note: The above restriction does not apply to fees and taxes levied by counties and municipalities pursuant to authority granted by the state.
■ Statutory Authority
Sections 40-17-140 through 40-17-155 (Motor Carrier Fuel Tax) and Sections 40-17-320 through 40-17-363 (Gasoline Tax), Code of Alabama 1975
■ Tax Base
Excise tax on the removal, import, sale/transfer in the bulk transfer/terminal system and blending of motor fuel (Gasoline Tax). Excise tax upon motor carriers who operate or cause to be operated any motor vehicles on any highway in Alabama (Motor Carrier Fuel Tax)
■ Tax Rate
The State of Alabama collects three levies, of $.07, $.05 and $.06, for a total of $.18 per gallon. Pursuant to Act 2015-54, effective October 1, 2016, the $.02 gasoline inspection fee was added to the $.04 excise tax, for a total of $.06 (See also Petroleum Commodities Inspection). Excise tax on motor carrier fuel is at the same rate as in effect for gasoline.
Note Regarding Local Rates:
Counties may levy a county gasoline tax if the legislature has passed a local act authorizing the county...