New Sales Tax on Fuel
Issue Overview: The Idaho Transportation Department and a study group, the Forum on Transportation Investment, have recommended that Idaho make a transition from traditional revenue-generating sources, such as the per-gallon fuel tax, to include other taxing methods that index taxes to growth.
Issue Background: Officials proposed a "Highway Preservation Fuel Tax" that would impose a new 7-percent tax on the base price of all fuel. This tax would occur prior to the assessment of the per-gallon fuel tax now imposed (18.4 cents and 24.4 cents federal tax on gas and diesel respectively, and 25ยข Idaho tax on both gas and diesel). This new tax would raise significant revenue for the State Highway Fund (about $108 million) and would index transportation funding so that tax revenues would increase with the price of fuel.
NFIB Position: Ninety-five percent of NFIB/Idaho members oppose adding a sales tax on fuel, in addition to the per-gallon tax already in place (2008 State Member Ballot), because Idaho already has some of the highest fuel taxes in the country, and this in combination with the high cost of fuel, puts increasing pressure on small businesses which can often not pass these costs on to their customers.
Issue Status: Gained no serious legislative traction in the 2008 session.
