HOUSE CONCURRENT RESOLUTION 104

(By Delegate Howell)

(Originating in the Select Committee on Tourism and Economic Diversification)

[Introduced March 10, 2022]

Requesting the Joint Committee on Government and Finance study the fiscal feasibility of eliminating the motor fuel excise tax and replacing any income from the tax with an equivalent increase in the general state sales tax revenue generated by increased sales.

Whereas, to attract more people to West Virginia, through tourism, job creation, recreation, or otherwise, drivers who pay less in gasoline, diesel, and fuel prices as a whole will be more inclined to visit the state because of these reduced fuel prices; and

Whereas, by reducing the state gasoline tax and state diesel tax to zero, more individuals will want to come to West Virginia to purchase fuel; and

Whereas, this elimination of the motor fuel excise tax can be done in a revenue neutral fashion with an equivalent increase in the general state sales tax revenue generated by increased sales by the percentage reduction of the current motor fuel excise tax rate; and

Whereas, when gas prices are higher, motorists generally drive less and a reduction of the motor fuel excise tax will get drivers back on the road in West Virginia ; and

Whereas, rising inflation also presents an opportunity to collect revenue more easily, and, sales taxes generally keep up with inflation better than do excise taxes, such as the motor fuel excise tax currently in place; and

Whereas, this reduction in the motor vehicle excise tax rate will help working class families in West Virginia to pay less for fuel and would mean more money in their pockets; and

Whereas, this elimination of the motor fuel excise tax will allow those who drive exclusively electric cars to pay their fair share in taxes through the subsequent increase in the sales tax revenue; and

Whereas, the elimination of the motor fuel excise tax will not affect airline fuel taxation otherwise collected; and

Whereas, there is presently levied on all motor fuel an excise tax composed of a flat rate equal to 20.50 cents per invoiced gallon of regular gasoline and diesel fuel, and on alternative fuel, on each gallon equivalent, plus a variable component comprised of five percent of the average wholesale price of the motor fuel: Provided, That the tax per gallon may not be less than 15.20 cents per gallon of motor fuel; and on alternative fuel, either the tax imposed by §11-15-18b of this code or the tax imposed under §11-15A-13a of this code, as applicable; and

Whereas, the variable component of the tax on alternative fuel is equal to five percent of the average wholesale price of the alternative fuel; therefore, be it

Resolved by the Legislature of West Virginia:

That the Committee on Government and Finance is hereby requested to study the fiscal feasibility of eliminating the motor fuel excise tax and replacing any income from the tax with an equivalent increase in the state sales tax revenue generated by increased sales; and, be it

 Further Resolved, That the Committee on Government and Finance is hereby requested to research the feasibility of revisions to state law that could help facilitate eliminating the motor fuel excise tax and replacing any income from the tax with an equivalent increase in the state sales tax revenue generated by increased sales; and, be it

Further Resolved, That not later than sixty days prior to the beginning of the 2023 regular session of the Legislature, the Joint Committee on Government and Finance report on its findings, conclusions, and recommendations, together with drafts of any legislation necessary to effectuate its recommendations; and, be it

Further Resolved, That the expenses necessary to conduct a study, prepare reports, and draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.