Fuel Tax Changes Take Effect in January in Key Grain-Producing States

Of the dozen or so States in which fuel tax changes took effect Jan. 1, Michigan and Nebraska implemented the most significant changes for grain transportation.

Michigan’s fuel taxes are linked to inflation and the consumer price index, allowing tax collections to increase with inflation.

Additional adjustments will occur each January.

The first adjustment is estimated to raise fuel rates by about 1 cent/gallon.

Also starting Jan. 1, Nebraska’s current 27.7-cents/gallon gas and diesel tax decreased by 2.9 cents to 24.8 cents/gallon.

Nebraska’s change is due to a law linking the state’s fuel tax rates to the price of fuel.

Another recalculation for Nebraska is scheduled for July 1, 2022.

On July 1, 2021, scheduled automatic fuel-tax changes for Illinois (a 46.7-cents/gallon increase) and Indiana (a 53- cents/gallon increase) took effect and remain in place until June 30, 2022.