State Hikes Diesel Fuel Tax 23%

Connecticut’s diesel fuel tax will jump nine cents to 49.2 cents per gallon July 1.

The 23% tax hike follows 12 months of rapidly escalating fuel prices, with the retail cost of diesel almost doubling since last June.

A 2007 state law requires the Department of Revenue Services to annually adjust the diesel fuels tax based on the average wholesale diesel price over the previous year and the wholesale gasoline tax rate.

The average retail price of diesel in Connecticut is $6.17 per gallon. It was $3.26 a year ago.

Highway Use Tax

DRS commissioner Mark Boughton notified legislative leaders of the tax increase in a June 15 letter.

Connecticut’s high costs of living and doing business will take another hit Jan. 1., when the new highway use tax takes effect.

Connecticut's diesel fuel #tax jumps 23% to to 49.2 cents a gallon July 1. Economists fear that hike, plus the scheduled January 1 introduction of a new highway use tax, will further drive up the state's high cost of living. #smallbiz #affordability
https://t.co/NOufiFnBzb

— CBIA (@CBIANews) June 15, 2022

Lawmakers approved that per-mile tax on trucks, which increases based on a vehicle’s gross weight, during the 2021 legislative session.

The tax, which is expected to generate $90 million annually, ranges from 2.5 cents per mile for trucks weighing 26,000-28,000 pounds to 17.5 cents for vehicles over 80,000 pounds.

Tax Cut Proposals

Republican lawmakers last week proposed $746 million in tax cuts, including suspending the diesel tax hike and repealing the highway use tax.

Republican gubernatorial candidate Bob Stefanowski also called for the legislature to use one-third of the state’s current record budget surplus for tax relief.

The 0.75% rate hike is the largest increase since 1994 as the Fed moves aggressively to control #inflation while squeezing economic growth. Inflation hit a three-decade high 8.6% in May, with officials signaling similar rate hikes for later this year. https://t.co/9QeNoNlpBU

— CBIA (@CBIANews) June 15, 2022

The Lamont administration and majority Democrats said there are no plans for a special legislative session to consider the tax relief proposals.

Inflation hit 8.6% in the 12 months ending in May, climbing at the quickest pace in four decades amid an unprecedented surge in gas prices.