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New Missouri Law Imposes First Motor Fuel Tax Raise in Decades

07.20.2021

For the first time in decades, Missourians can expect a motor fuel tax increase.

Governor Parson recently signed senate bill (SB) 262 into law, increasing the transportation funding for critical state and local infrastructure projects across the state of Missouri. The new law will gradually increase the Missouri motor fuel tax, currently set at 17 cents per gallon, by 2.5 cents per year until it reaches a 12.5-cent maximum increase on July 1, 2025. The first increase is slated to take effect on October 1, 2021.

The gas tax increase could generate more than $500 million annually for state and local roads and bridges; however, this figure could decrease depending on the number of taxpayers who qualify for an exemption and will seek a refund.

SB 262 allows for taxpayers to seek an exemption and refund of the motor fuel tax increase if you meet certain criteria.  Refunds of the additional motor fuel tax will only be available for motor fuel delivered into a motor vehicle with a gross vehicle weight rating of 26,000 pounds or less. Taxpayers may claim a refund upon completing an application and properly documenting their fuel purchases.  For companies with large fleets of qualifying vehicles, this refund opportunity could be particularly advantageous.

Among other provisions of the new law, the Department of Revenue shall establish an Electric Vehicle Task Force. This Task Force will analyze and make recommendations regarding the impact of electric vehicle adoption on transportation funding and be required to deliver a report of their findings to the General Assembly and Governor no later than December 31, 2022.

Brown Smith Wallace can help your organization understand the complexities of the new tax law and take full advantage of any available exemptions. If you have questions or need assistance, please feel free to reach out to Bernie Ottenlips, State and Local Tax Principal, at 314.687.2375 (BOttenlips@bswllc.com) or Amy Jackson, State and Local Tax Principal, at 314.983.1336 (AJackson@bswllc.com).

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