Connecticut’s tax on diesel fuel will increase by 9 cents on July 1, the state revenue services commissioner told lawmakers in a letter on Wednesday, the statutory deadline for the agency to announce the impact of an annual adjustment.
The change, determined since 2007 by a formula based on the wholesale cost of diesel, will bring the diesel tax to 49.2 cents a gallon. The change represents a 23% increase over the current tax. Barring legislative action, it will remain at that rate until it is adjusted again on July 1, 2023.
The average price of diesel fuel in Connecticut sat Wednesday at $6.17 per gallon, according to AAA.
The Revenue Services Department waited until the June 15 deadline to make the announcement, which came Wednesday in a letter to the leaders of the legislature’s Finance Revenue and Bonding Committee.
“Pursuant to Conn. Gen. Stat. § 12-458h, the Commissioner of Revenue Services is required, on or before June 15, 2022, to calculate the applicable tax rate per gallon of diesel fuel for the fiscal year beginning July 1, 2022. In accordance with this statutory obligation, I am hereby notifying you that, effective July 1, 2022, the tax rate on diesel fuel will be 49.2 cents per gallon,” Commissioner Mark Boughton wrote.
State policymakers declined to include the diesel tax in an ongoing suspension of the excise tax on gasoline, adopted this year in response to record-breaking fuel prices and inflation. In recent weeks, Republicans have sought to pressure lawmakers into a special session to suspend the increase.
Democratic lawmakers and Gov. Ned Lamont have said the diesel tax impacts out-of-state truckers.
“You know the diesel tax, let’s say half that is paid for by out-of-state tractor trailer trucks, many of which don’t stop in the state they just keep rumbling through,” Lamont said last week. “I like to do tax cuts that really focus on middle class folks here in our state.”
Republican lawmakers said the governor doesn’t understand the impact the tax hike will have on small businesses and consumer services.
“I don’t know how they can argue that this is paid by a majority of people that are outside the state,” Sen. Craig Miner, R-Litchfield, said.
He said Democrats can talk about out-of-state truckers all they want, “this is not about out-of-state truckers. This is about the cost of doing business in Connecticut.”
At a press conference last week, Joe Sculley, president of the Motor Transport Association of Connecticut, argued that increasing the cost of diesel would increase the cost of all goods transported by truckers.
“Their customers are grocery stores and gas stations and clothing stores so your food is going to cost more, your gas is going to cost more and your clothing is going to cost more,” Sculley said.
Meanwhile, Rep. Sean Scanlon, a Guilford Democrat who co-chairs the legislature’s tax-writing committee, said Wednesday that lawmakers had already taken steps to reduce the impact of inflation on Connecticut families through the recently-passed state budget. The bill included more than $600 million in temporary and permanent tax reductions.
“Whether it’s inflation or now the cost of gas, these are national problems, what we did last session was find a Connecticut solution, giving people in our state some relief from a national problem. We passed that already and that relief is coming to families in a more targeted way than simply cutting broad taxes,” Scanlon said. “We’re always open to conversations about further ways we can continue giving relief but less than a month ago, we passed the biggest tax-cutting budget in the history of Connecticut and that relief is on the way to families to deal with national costs.”
Earlier this year the legislature cut the excise tax on gasoline by 25 cents per gallon. The tax holiday lasts until Dec. 1.
In a statement Wednesday, Republican gubernatorial candidate Bob Stefanowski reacted the increase by accusing Lamont and President Joe Biden of creating the rise in inflation being felt around the globe.
“Higher costs for goods means higher inflation, and an even more expensive state. I urge Governor Lamont to suspend all state taxes on gas and diesel to help residents get through the current crisis that he and President Biden have created,” Stefanowski said.