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Todd Dills

Fuel-tax dustup in MI (Can you spell I – F – T – A?)

| January 22, 2013

When a reader wrote in to the Port Huron (Michigan) Times-Herald newspaper recently with an idea to “charge all these truckers and people coming in from out of state to pay their share of the road taxes,” the paper set him straight, but only partly. Editors failed to mention that today, truckers running in Michigan do “pay their share of the road taxes” via IFTA’s distribution system, based on the number of miles run in the state’s borders.

The state’s governor’s road- and bridge-cost woes have been in the news recently, with Gov. Rick Snyder calling for elimination of the gas and diesel taxes paid at the pump in favor of taxing fuel at the rack — taking a percentage of the wholesale value, which would of course be paid by fuel marketers and passed along to the consumer in the pump prices. The resulting wholesale tax at today’s prices could be as much as two times what the tax is today, 15 cents, resulting in a per-gallon premium of an equal amount on fuel bought in the state.

The Times-Herald’s editors made note of the Constitution’s commerce clause, which “makes targeting out-of-state trucks illegal,” they said. “And because our taxes are already higher than most other states, they buy fuel elsewhere. I’m thinking Snyder’s plan won’t cost them a nickel.”

And yes, fewer might buy there under Snyder’s wholesale plan, I’d guess. If you did it would cost you indeed, though, and perhaps irrespective of how many miles you actually ran there, given that the retail tax would be removed and IFTA may no longer apply there.

My question of the day? Well, would that constitute targeting truckers unfairly — and be a violation of the commerce clause?

If Snyder and his allies in the state Congress are successful, time will tell.

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