North Carolina lawmakers on Oct. 7 approved legislation to suspend state motor fuel taxes through Nov. 30, becoming the seventh state to do so in the lead-up to the Nov. 3 General Election. Gov. Josh Stein (D) is expected to sign the bipartisan bill into law.
The loss of revenue will cost the state $362.3 million, which lawmakers say will be paid back to the transportation fund from a Stabilization and Inflation Reserve. The bill also lifts penalties for use of dyed diesel on highway vehicles, joining ten other states that have lifted restrictions on the tax-exempt diesel fuel typically reserved for off-highway use.
Citing rising costs at the pump, North Carolina joins Ohio and Georgia as states that have suspended motor fuel taxes in recent weeks. Indiana renewed its gas tax suspension several times since initially enacted in April and is expected to extend it again through the election. Two other states – Illinois and Kentucky- suspended scheduled as tax increases, and Utah cut its gas tax by six cents per gallon for the last six months of this year.
Several studies, including a 2022 report by ARTBA-TIAC, caution that while states will lose the entirety of that revenue, consumers would see only partial savings at the pump.