Allocation of sales tax paid on diesel to highways.

12LSO-0040.C1

                                                         

FISCAL NOTE

 

 

 

FY 2013

FY 2014

FY 2015

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase (Decrease):

 

 

 

HIGHWAY FUND

GENERAL FUND            

0

0

23,900,000

(23,900,900)

23,900,000

(23,900,000)

 

 

Source of Revenue Increase:

Sales tax revenue currently collected on off-road (dyed) diesel fuel purchases will be diverted from the GENERAL FUND to the HIGHWAY FUND.

 

Assumption:

Off-road diesel fuel purchases are exempt from diesel fuel license tax, but may have sales tax applied to such purchases unless purchases are also exempted from sales tax (railroad and agricultural businesses are exempt from the diesel fuel sales tax per W.S. 39-15-105(a)(iii)(D) and (E).

 

The actual amount of revenue collected and diverted will vary from year to year based on sometimes significant fluctuations in the market price for diesel.  The average supplier ("rack") price for diesel in Wyoming was $3.52 per gallon on November 16, 2011 (price was $3.02 per gallon in June 2011).  The rack price on July 1, 2013 may be significantly different than the recent rack prices shown.

 

Expected revenue equals the rack price per gallon of fuel ($3.52 per gallon) multiplied by the total number of gallons of fuel purchased for non-exempt industries like mining and construction (245,662,507) multiplied by the state level sales tax rate (4%) multiplied by the state's share of such sales tax revenue (69%).

 

($3.52 x 245,662,507 x 0.04 x 0.69 = $23,900,000 in approximate annual revenue)

 

The expected revenue estimate assumes that railroad and agricultural businesses will remain exempt from the diesel fuel sales tax.  The diverted sales taxes will only be used for Wyoming road construction, improvement and maintenance activities and will not cover other programs or costs within the Wyoming Department of Transportation.  Local government shares of the sales tax revenue from off-road diesel fuel purchases will not be diverted from the GENERAL FUND to the HIGHWAY FUND.

 

 

 

 

Prepared by:  Michael Swank, LSO           Phone:  777-7881

(Information provided by Kevin Hibbard, Wyoming Department of Transportation, phone 777-4026; Dan Noble, Wyoming Department of Revenue, phone 777-5220)