Dear
Highway User,
It's very hard to believe, but this year, Nevada will be writing
checks to other states in the amount of $12.5 million from
our already beleaguered Highway Fund.
Why? Because
Nevada is one of the 48 contiguous states and ten Canadian
provinces that are members of the International Fuel Tax Agreement,
known as IFTA. The IFTA compact was designed to address the
problems of tax reporting in different jurisdictions and simplify
fuel use tax reporting for those carriers that traveled states
and provinces.
The procedures
in the compact allow interstate motor carriers to purchase
fuel in Nevada, paying Nevada's taxes on the diesel fuel purchased,
and then report those miles traveled in Nevada, for which
Nevada receives a share of the taxes based on the miles traveled
in the Silver State.
For example,
an interstate motor carrier traveling 435 miles from the California
border to the Utah border might choose to stop in Nevada and
purchase 400 gallons of diesel fuel, paying $108 in diesel
fuel taxes. The taxable miles of 435 are divided by the average
MPG of 5.5 resulting in 79 gallons used on the trip across
our state. Nevada receives 27¢ per gallon or $21.33,
for this fully loaded truck to cross our state. The balance
paid in taxes of $86.67 is used has a credit based on terms
of the IFTA compact for travel in other jurisdictions.
However,
our neighbors to the west in California passed legislation
in 1998 that allows the tax on diesel fuel to be automatically
increased in January of each year. This change has had an
enormous impact on Nevada's highway fund, since the taxes
collected on interstate motor carriers are paid to our highway
fund. California's diesel tax now exceeds 36¢ per gallon,
which means more tax dollars are paid to California's highway
fund for large interstate trucks for the use of their highways
than Nevada receives for the use of our highways.
Following
that same example, that same interstate motor carrier who
purchased the 400 gallons in Nevada now travels the same 435
miles on California's highways. These miles will be reported
to California and the amount paid to California's highway
fund for the use of their roads for the same 79 gallons will
be $28.91, an increase of 36 % over what Nevada charges for
the same usage.
California's
foresight in raising their diesel fuel taxes each year has
resulted in an annual windfall to their highway fund of over
$80 million per year!
However,
because Nevada has not raised their diesel fuel tax for more
than 16 years, other states similar to California with higher
diesel fuel taxes will cause Nevada's highway trust fund to
remit approximately $12.5 million to other states in 2008.
This means either our highway fund is shorted another $12.5
million or we have to pay additional taxes or user fees to
make up the difference.
It is
time to ask our legislators to take another look at this disparity
in 2009.
Sincerely,
Nevada Highway Users Coalition
|
