OUR THOUGHTS ON:

Welcoming the New Year -- Recap of Federal Gas Tax Proposals, 2018 Pennsylvania Toll Increases and Pennsylvania Gas Tax Reductions

Tax|Tax Reform|Transportation & Logistics

By Jessica Gates

The Commonwealth of Pennsylvania decreased both the wholesale motor fuels tax and the diesel fuels tax on gasoline by .006 cents on January 1, 2018.  Despite the slight reduction in rates, Pennsylvania still wins the first place trophy for the highest gas tax in the United States.  The taxes on motor fuels and diesel fuels decreased to 57.6 cents per gallon and 74.1 cents per gallon, respectively. 

In related news, the tolls for using the Pennsylvania Turnpike have increased for the ninth consecutive year.  A 6% increase in tolls went into effect January 7, 2018, mirroring the 6% increase that was enacted in 2017.  The revenue generated from the toll increase will be invested to pay for a ten-year spending plan that will invest approximately $5.77 billion in infrastructure in the coming years, consisting of ongoing reconstruction and widening projects.

The Pennsylvania Turnpike is expecting to increase toll prices through 2044 based on their latest projections.  So how will Pennsylvania drivers and trucking companies react to these continual toll increases?  The turnpike faces competition from free interstate highways, including I-80, and roads such as I-78 and I-81.  These free roads have attracted a variety of warehouse districts recently, which move freight to mid-Atlantic customers without having to pay turnpike tolls.

There may be a federal gas tax increase on the horizon also. The U.S. Chamber of Commerce has proposed a 25 cent increase to the federal gas tax that has remained at 18.4 cents since 1994. The Chamber proposal is a 5 cent per year increase for 5 years. The funds would be used to help fund much-needed infrastructure projects on roads and bridges. The group also supports a more efficient permitting process and more private partnerships to fund infrastructure projects.

On a positive note, the United States economy is expected to remain strong for 2018, meaning higher gas taxes and toll prices may not necessarily inhibit driver and trucker behavior.  Only time will tell…

For more information, contact Schneider Downs or visit the Our Thoughts On blog.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

comments