Alaska House passes bill to suspend motor fuels taxes

Slushy and watery roads near a gas station.
The full service Capital Service gas station in downtown Juneau in January. (Rashah McChesney/KTOO)

The Alaska House passed legislation Wednesday to suspend a tax on motor fuels until mid-2023.

The bill, which passed 36-2, next goes to the Senate, with two weeks left in the legislative session. Gov. Mike Dunleavy in March urged lawmakers to suspend the collection of taxes on motor fuels, including fuels used for cars and trucks, watercraft and aviation.

There currently is an 8 cents per-gallon tax on gas purchased for highway use. That tax hasn’t been changed in decades, and the bill, as originally proposed, would have doubled it. The original bill, among other things, also would have raised the tax on gas for marine use.

The original bill also called for increasing the surcharge on refined fuels to go toward an account used to address and prevent certain hazardous substance spills.

The bill was gutted in a House committee to just deal with the surcharge increase as gas prices this spring rose. It was further amended on the House floor to suspend motor fuels taxes until June 30, 2023.

The state for years faced deficits amid low to middling oil prices but recent high oil prices have led to rosier revenue projections.

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