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MO Proposed Motor Fuel Tax Increase Moves Forward

The Missouri Legislature continues to advance SB 262, which will increase the state motor fuel tax by 12.5 cents a gallon over 5 years. The bill, sponsored by Sen. Schatz,  is sometimes referred to as the “South Carolina Model” due to the provision in the bill that would allow for an individual to apply for a refund on additional fuel taxes paid.

According to Missourians for Transportation Investment, current road conditions cost the average Missouri driver approximately $2,400 per year due to increased maintenance, safety and congestion. Infrastructure is key area companies consider when looking to expand or relocate. Poor road conditions make Missouri less competitive than other states in attracting new businesses and maintaining jobs.

While SB 262 has bipartisan support and provides an opportunity to address the state’s transportation investment shortfall, due to Missouri constitutional language, it is limited to use for roads and bridges. Currently, Missouri has the 2nd lowest fuel tax in the nation and has an annual shortfall of $825 million in unfunded transportation needs. Over the past 10 years, 7 of 8 border states have increased their gas tax to improve roads and bridges .

Once fully phased in, the average Missouri driver is expected to pay between $69.61 and $96.26 per year. The bill includes a provision which would allow a driver to apply for a refund on additional fuel tax paid in excess of the current motor fuel tax. Those who pay the increased state motor fuel tax can claim a refund on those taxes if they don’t wish to invest in roads and bridges, while more than 1 million voters who supported a state motor fuel tax increase in 2018 would have an opportunity to invest in the state’s transportation system.

Additionally, the bill establishes an Electric Vehicle Task Force to study the impact of electric vehicles on transportation funding. The bill will double the registration fee on electric vehicles over a period of 5 years in order to ensure that operators of electric vehicles continue to pay their fare share of road maintenance.


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