ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

First Regular Session

HB 2436: motor fuel taxes; inflation adjustment

Sponsor: Representative Carroll, LD 22

Committee on Transportation

Overview

Requires the per gallon tax rates on motor vehicle fuel and use fuel to be annually adjusted to reflect the average change in the consumer price index published by the U.S. Department of Labor, Bureau of Labor Statistics.

History

Pursuant to A.R.S. § 28-5606, a tax of 18 cents per gallon is imposed on motor vehicle fuel possessed, used or consumed in Arizona. Additionally, a tax is imposed on use fuel to partially compensate Arizona for the use of its highways, except that there is no use fuel tax on alternative fuels. For use fuel that is used in the propulsion of a light class motor vehicle on a highway in Arizona, the tax imposed is 18 cents per gallon. For use fuel that is used in the propulsion of a use class motor vehicle on a highway in Arizona, the tax imposed is 26 cents per gallon. Through December 31, 2024, a nine cent per gallon tax is imposed on use fuel used in the propulsion of a motor vehicle transporting forest products in compliance with statutory requirements on a highway in Arizona.

A.R.S. § 28-6501 requires monies collected from the motor vehicle and use fuel tax be deposited in the Highway User Revenues Fund (HURF). After initial distributions, the Arizona Department of Transportation (ADOT) is required to allocate, and the State Treasurer is required to distribute monies in HURF as follows: 1) 50.5% to the State Highway Fund; 2) 19% to counties; 3) 27.5% to incorporated cities and towns; and 4) 3% to incorporated cities with a population of 300,000 or more persons (A.R.S. § 28-6538).

Provisions

1. Requires the following tax rates to be adjusted annually to reflect the average change in the consumer price index published by the U.S. Department of Labor, Bureau of Labor Statistics:

a) The 18 cent per gallon tax rate on motor vehicle fuel;

b) The 18 cent per gallon tax rate on use fuel for light class motor vehicles; and

c) The 26 cent per gallon tax rate on use fuel for use class motor vehicles. (Sec. 1)

2. Makes technical changes. (Sec. 1)

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6. HB 2436

7. Initials JT Page 0 Transportation

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