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SF1747 (Legislative Session 94 (2025-2026))

Motor fuels tax indexed increases repealer

Related bill: HF304

AI Generated Summary

This bill proposes to repeal the automatic annual increase of Minnesota's motor fuels tax based on the Minnesota Highway Construction Cost Index (MHCCI). It amends Minnesota Statutes 2024, Sections 296A.07 and 296A.08, which currently allow for yearly inflationary adjustments in the fuel tax rate for gasoline, E85, and M85.

Key Provisions:

  1. Fixed Tax Rates:

    • E85: 17.75 cents per gallon
    • M85: 14.25 cents per gallon
    • All other gasoline: 25 cents per gallon

  2. Elimination of Indexed Increases:

    • Currently, the motor fuel tax is adjusted annually, based on the MHCCI, to account for inflation.
    • This bill removes that provision, preventing future automatic increases.

  3. Ending the 3% Cap:

    • Under current law, annual tax increases due to inflation cannot exceed 3%.
    • This bill repeals that mechanism, effectively freezing fuel tax rates at their current levels unless changed by future legislation.

Impact:

By removing indexed increases, this bill would prevent automatic fuel tax hikes tied to rising highway construction costs, potentially reducing future revenue for transportation infrastructure projects. However, it would keep fuel costs stable for consumers and businesses.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 19, 2025SenateFloorActionIntroduction and first reading
February 19, 2025SenateFloorActionReferred toTransportation

Citations

 
[
  {
    "analysis": {
      "added": [
        "Introduces maximum percentage change for tax rates based on the Minnesota Highway Construction Cost Index."
      ],
      "removed": [
        "Eliminates indexed increases to the motor fuels tax."
      ],
      "summary": "This bill modifies the gasoline excise tax rates as outlined in section 296A.07.",
      "modified": [
        "Adjusts the method for annual tax rate determination for different types of gasoline."
      ]
    },
    "citation": "296A.07"
  }
]

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