Fuel tax relief for trucking industry or 'almost no help'

Last week, a truck driver shared on Facebook a photo of the Carroll Fuel station near the Port of Baltimore, where the billboard showed diesel prices at $4.43 and $4.25 per gallon. Two other drivers responded that they had seen stations charging $4.39.

"They cut the tax," a fourth user commented.

This month, Maryland became the first U.S. state to implement a 30-day fuel tax suspension. On the same day, Georgia also implemented a longer suspension of nearly three months. Republicans in Californiafailed to force a voteto suspend that state's fuel tax, but other states are still weighing similar measures amid consumer dissatisfaction over soaring oil prices and overall inflation.

Some gas stations have lowered prices, but prices are influenced by multiple factors, and the government cannot force stations to cut prices. Even if oil prices fall, it may not significantly reduce fuel costs for cross-state truck drivers, because the International Fuel Tax Agreement (IFTA)—the tax drivers pay for using each state's roads—remains in effect.

"I don't think these measures will help the trucking industry at all," said Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association, referring to the states' tax suspension measures.

"No matter where they buy fuel," Pugh said, "they still have to pay taxes to each state for the miles they travel."

"We urge states to reconsider these proposals"

The American Trucking Associations (ATA) has been lobbying against fuel tax suspensions at the federal level, citing concerns about jeopardizing funding for critical maintenance projects. The organization also opposes similar efforts at the state level.

"These suspensions do little to ease the burden on consumers—including trucking companies—while also undermining states' ability to raise the revenue needed for vital infrastructure investments," said Darrin Roth, ATA's vice president of highway policy, in an email.

Roth noted that fuel excise taxes are collected at the wholesale level by gas stations, not directly from drivers at the pump.

"Whether the savings from these tax suspensions will actually be passed on to consumers is doubtful," he wrote. "We urge states to reconsider these proposals and not play politics with these important user fees."

The Georgia Department of Revenue is considering a regulation that would treat miles traveled within Georgia as tax-exempt during the suspension period, thereby relieving truck drivers of their IFTA obligations, said Ed Crowell, president and CEO of the Georgia Trucking Association, in an interview.

"Once these regulations are in place, which I expect within the next week or so, you'll see the entire trucking industry benefit," Crowell said Tuesday.

This is the second time the state has suspended fuel taxes in the past year, the last time being after the Colonial Pipeline shutdown last May, The Atlanta Journal-Constitutionreported. Crowell does not expect the current suspension to be extended "unless something extremely bad happens," he said.

"This is not a silver bullet that solves long-term problems," he said. "It's just some relief and help in the short term."

Louis Campion, president and CEO of the Maryland Motor Truck Association, said the industry generally welcomes any fuel cost reduction that can "help us alleviate the sharp rise in oil prices we've been experiencing."

"However, given that fuel taxes do support transportation infrastructure, the state needs to ensure that the Transportation Trust Fund is still replenished so we don't see shortfalls or reductions in Maryland-funded projects," Campion said.

State lawmakerstold The Baltimore Sunthat they will use about $7 million in surplus to fill the $98 million gap in Maryland's Transportation Trust Fund caused by the fuel tax suspension, which funds highways, transit, and other projects.

"I'm trying to figure out how to make money"

High fuel costs weigh heavily on truck drivers' decisions, affecting not only where they refuel but even whether they accept a load, said Corey Pointer Sr., an owner-operator at T&C Trucking.

For example, Route 68 through the mountains of western Maryland is a "roller coaster" of grades that reduces truck fuel efficiency, which drivers call "leaving oil on the ground," Pointer said.

"Going up and down that mountain burns a lot of oil," said the 43-year-old Baltimore truck driver.

Pointer said the lower fuel prices in Maryland and Georgia may attract drivers to refuel in those states, and he predicts other states will follow suit with fuel tax suspensions.

"It makes drivers highly focused on filling up in Maryland," he said, "and not going too far so they don't have to refuel in another state."

But he also worries that IFTA taxes in other states will offset fuel cost savings. He said that at the end of a quarter, his truck traveled in Pennsylvania without buying fuel there, so he owed that state $500.

"I'm trying to figure out how to make money at this point," he said. "You're burning through freight revenue quickly. And, if you have drivers, you still have to pay driver wages, and the money just isn't enough."

A 'short-sighted' political 'gimmick'?

Politicians in Maryland and Georgia have each touted their fuel tax suspension bills.

Republican Georgia Governor Brian Kempwrote on Twitter: "We can't fix everything Washington broke, but we're doing our part to ease the impact on your wallet."

On Friday, I signed HB304, temporarily suspending the state fuel tax to provide relief at the pump for hardworking Georgians. While we can't fix everything Washington broke, we're doing our part to ease the impact on your wallet.https://t.co/9Mr56CP6Dg

— Brian Kemp (@BrianKempGA) March 22, 2022

Maryland Comptroller Peter Franchot, a Democratic gubernatorial candidate whose agency oversees gas stations, had called for a 90-day suspension. Hein an Instagram campaign postcalled the 30-day measure "Peter Franchot's fuel tax holiday."

Michael Sakata, president and CEO of the Maryland Transportation Construction and Materials Association, was the only one to testify in opposition.

Sakata called the effort "short-sighted" at a joint hearing of the state's House and Senate committees in Annapolis on March 15.

"It fails to consider other relief options that could have a greater impact on more Marylanders—namely, reducing the state sales tax over a similar period," he testified. "Low-income residents in our urban areas who rely on public transit—those who need relief the most—would get nothing from this bill."

In an interview, Sakata noted that the savings for the average driver are expected to be minimal: filling a 12-gallon tank would save only about $4. He advised other states considering such actions not to threaten funding for transportation projects for what he called a "gimmick" fuel tax suspension.

"Yes, people feel the pressure at the pump, but they feel it everywhere, right?" he said. "They feel it when buying a gallon of milk. They feel it when buying diapers. They feel it on everything."