State Senate Passes Bill To Reverse 2023 Gas & Diesel Tax Increase

The state Senate passed a bill (Senate Bill 35) this past week that is intended to roll back the motor fuel tax increase that took effect on January 1, 2023. That increase was the result of the significant rise in the average wholesale price for the previous year as calculated in the oil franchise tax law.

The current oil franchise law was originally designed to provide for a stepped increase of motor fuel taxes over the years to avoid the need for legislative action to increase gas tax revenue.

Senate Bill 35 would remove the automatic increases and establish the average wholesale price at $2.99 for the balance of this year and permanently in the future. The changes would take effect 30 days from the Governor signing the bill.

On a recent monthly call that the PPA participates in with state energy officials, a representative from the Department of Revenue stated that they prefer tax changes that are designated to commence at beginning at years or at least quarters as opposed to legislative language such as the 30-day clause in the bill.

It is unclear the position of incoming Governor Shapiro regarding this proposal. And the continuing stalemate in the state House makes it even more unclear as to when the bill would be taken up by that chamber.

PPA will work within our Motor Fuel & Convenience Store Committee to craft its position on this bill.

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