Diesel fuel is now exempt from the petroleum products gross earnings tax, a percentage tax on the wholesale price of fuel sold in Connecticut. Most recently, this tax had been 6.3 percent, or about 12 cents a gallon on diesel fuel. The new legislation pushes the regular fuel tax on diesel up from 26 to 37 cents a gallon. The change allows the full tax to be reported on a carrier's IFTA tax return. The refund rate for tax on diesel fuel used off-highway, however, stays at 26 cents a gallon.
The tax on diesel will be readjusted annually, to keep pace with increases in the gross earnings tax. Gasoline remains subject to the gross earnings tax, the rate of which was increased to 7 percent for the remainder of calendar 2007. This amounts to approximately 11 cents a gallon, so that the full rate on tax on gasoline will be about 36 cents.
For more information, contact Mike Riley at the Motor Truck Association of Connecticut at (860) 520-4455 or [email protected]