Provides relative to the imposition of state sales tax on certain motor fuels (Items #9 and 36) (EG INCREASE SD RV See Note)
Impact
The implementation of HB 121 would significantly alter the landscape of state sales tax regulations concerning gasoline. By eliminating the current exemption, the bill aims to create a mechanism for adjusting tax burdens based on fluctuating oil prices. This change is intended to ensure steady funding for transportation within the state, though it raises concerns about how such taxes would be passed on to consumers. The stipulation that tax revenues will support the Transportation Trust Fund indicates the bill’s goal of enhancing infrastructure development, an essential aspect for state funding amidst fluctuating oil economies.
Summary
House Bill 121 focuses on the imposition of state sales tax on gasoline sales, repealing the current exemption that gasoline has under state law. The bill proposes a tiered approach to the sales tax based on the price of oil per barrel, maintaining current exclusions for butane and propane, while subjecting gasoline sales to varying tax rates. Under the proposed law, when oil is priced below $40 per barrel, full state sales taxes would apply. For oil prices between $40 and $60, only a portion of the state tax would be applicable, and above $60 per barrel, gasoline sales would be exempt from state sales taxes entirely. The revenues generated from this tax would be directed into the Transportation Trust Fund to support state infrastructure projects.
Sentiment
The sentiment surrounding HB 121 appears to be mixed, with some legislators supporting it as a means of stabilizing and improving state revenues for transportation, while others view it as a potential financial burden on consumers, especially during periods of high oil prices. Proponents argue that the bill is a necessary step towards ensuring adequate funding for public infrastructure, while opponents express concern over the economic impact on individual citizens who may face increased fuel costs. The debate illustrates a broader discussion on balancing revenue generation with consumer protections.
Contention
Notably, HB 121 has sparked discussions regarding taxation fairness and the implications for low-income communities that may be disproportionately affected by increased gasoline prices. Critics assert that imposing a sales tax on gasoline during times of economic hardship could exacerbate the financial strain on families. Furthermore, the decision to link tax rates to oil prices introduces complexity that could lead to public backlash depending on market fluctuations. Overall, the bill illustrates the tension between ensuring state revenue growth and protecting consumer interests, making it a contentious topic within legislative discussions.
Provides for the extent of applicability of various exclusions and exemptions from state sales and use tax (Item #36) (EG +$789,900,000 GF RV See Note)
(Constitutional Amendment) Removes the prohibition against levying a state sales and use tax on the sale of gasoline (Item #36) (EG +$90,800,000 GF RV See Note)
(Constitutional Amendment) Provides with respect to limitations on sales and use tax including exclusions and exemptions (Item #36) (OR +$90,800,000 SG RV See Note)