Utah lawmakers reached a compromise on March 12 to increase the state’s gas tax by 5 cents-per-gallon, add a 12 percent tax on the wholesale price of gasoline, and permit counties to seek voter approval for a 1/4-cent sales and use tax increase for local transportation projects. The legislation, passed just before midnight, now goes to the desk of Governor Gary Herbert (R) for review.
If approved by the Governor, the 5 cents-per-gallon increase in the state gas tax would go into effect Jan. 1, 2016. The 12 percent tax on the wholesale price of gasoline would not be enacted until the wholesale price reaches $2.45 per gallon, a point which lawmakers do not expect to occur for another 6-10 years. Once enacted, limitations on the tax will prevent it from falling below $2.45 per gallon or increasing more than 40 cents-per-gallon.
The Senate voted 20-8 to approve the legislation, and the House passed the bill 44-29. The bill now awaits Gov. Herbert’s signature, who has indicated he would support the compromise. If approved, this would be Utah’s first state gas tax increase in 18 years.