During the lame duck session debate regarding road funding, several other measures were passed on the condition of passage of Proposal 1 on May 5th. A few of those pieces of legislation affect the trucking industry.
Throughout the road funding debate over the past several years, there was significant public pressure on the legislature to do something about heavy trucks. Public perception is that heavy trucks are the cause for our poor road conditions in Michigan, despite the constant education process on the benefits of the per-axle weighting in Michigan.
Many different proposals were debated in the legislature during the final weeks before passage, and some were more onerous than others on heavy trucks. Votes were taken to lower allowable weights to 80,000 pounds, a decrease from 164,000 pounds; doubling fees and fines for heavy weight permits or for per-axle over weight issues; and some registration increases on commercial trucks, but with the influence of MITA, these efforts were defeated.
What eventually passed the legislature to go into effect on October 1, 2015 (on the condition that Proposal 1 passes) are some changes to truck registration fees. Attached is a schedule on how those fees would be increased over a three-year phase-in process for each weight classification. There were also registration fee changes to passenger vehicles, including increases to electric and hybrid vehicles that typically pay very little in gas taxes.
As mentioned in previous bulletins, diesel fuel will increase, as well as gasoline, to raise additional revenues for Michigan’s transportation fund. The diesel fuel tax would adjust from the 15-cents/gallon to a 14.9% wholesale gas tax or the equivalent of 46-cents/gallon. However, sales tax will no longer be charged on diesel fuel purchases if this ballot initiative is approved. This measure would also go into effect on October 1, 2015, but again, is dependent upon the passage of Proposal 1.
As MITA staff travels across the state educating members on Proposal 1 and its positive impact for road funding for decades to come, several questions have been asked regarding how off road dyed diesel fuel would be treated. The simple answer is that it will be treated the same as it is currently. Dyed diesel fuel for off road purposes would be exempt from the excise tax that is placed on motor fuel, or in other words, the 15-cents/gallon diesel tax in current law or the potential 14.9% wholesale tax after October 1, 2015, but it will be subject to sales tax just as it is today.
With these changes occurring, MITA fought very hard to make sure that proposals that had even larger negative impacts on the trucking industry did not pass through the legislature. MITA will continue to look for opportunities to reduce the regulatory burdens placed on trucks.
If you have any questions or concerns, please contact Mike Nystrom, Executive Vice President, at mikenystrom@mi-ita.com or Lance Binoniemi, Vice President of Government Affairs, at lancebinoniemi@mi-ita.com.
