Fuel tax revolt grows as prices explode across the U.S.

Fuel taxes are already draining drivers’ wallets – and this spring, the hit at the pump is getting even more brutal.

Now, with fuel prices climbing fast and the war in the Middle East pushing costs even higher, states are being forced into tough talks about whether to step in and give drivers some relief.

Georgia and Indiana were the first states this year to slash fuel taxes.

Now Kentucky is joining the list. Other states could be next.

Kentucky

Kentucky Gov. Andy Beshear cited the ongoing war in Iran as one reason to step in to ease the pain at the pump for all drivers.

TruckMiles reports the average diesel price in Kentucky has climbed to $5.17.

On Tuesday, May 5, Beshear announced he signed an executive order to cut the state’s fuel taxes and cancel a planned tax hike.

“Rising fuel costs are driving price increases on food, consumer goods and other services that travel over our roads and highways to make it to grocery stores and eventually our kitchen tables,” Beshear said.

Kentucky currently collects 26.4 cents per gallon for gasoline. The diesel rate is 23.4 cents. Those rates rise and fall with fuel prices.

Starting May 11, the tax rate will drop to 10 cents, down to 16.4 cents for gas and 13.4 cents for diesel.

The state also canceled a scheduled fuel tax adjustment that was set to take effect on July 1.

Indiana

On Wednesday, Indiana Gov. Mike Braun renewed his state’s gas tax holiday. This time, he sweetened the deal with another tax break for motorists.

Diesel, however, is once again left out.

Last month, Braun issued an emergency declaration to pause the state’s 7% usage tax.

At the time, the tax was set at 17.2 cents per gallon. Even though it isn’t being collected during the break, the rate should now be 23 cents.

The usage tax is tied directly to gas prices. It’s figured by multiplying the statewide average gas price by the state retail tax.

And that tax stacks on top of Indiana’s 36-cent gas excise tax.

The original break was set to expire on May 8.

This week, Braun announced he is extending the usage tax holiday another 30 days. He’s also suspending the gas excise tax this time around.

“By suspending both parts of Indiana’s gas tax, I’m more than doubling the savings for Hoosiers at the pump,” Braun said.

Indiana law caps fuel tax suspensions at 60 days unless lawmakers approve more time.

Rhode Island

Rhode Island Gov. Dan McKee also wants to roll back some pain at the pump.

The state charges a 40-cent-per-gallon tax on both gas and diesel purchases. That number jumped 2 cents from last year’s 38-cent rate.

McKee is urging lawmakers to repeal the 2-cent fuel tax increase.

Ironically, lawmakers added the tax hike to the governor’s own proposed budget last year. The increase became law without McKee’s signature.

“Last year, I chose not to sign the budget presented to me by the General Assembly due to its unnecessary cost increases on taxpayers, including an increase in the state gasoline tax,” McKee said.