Gas pumps ring up extra nickels as federal tax begins

Federal tax signs on local filling stations across America rose from 4 cents to 9 cents today (April 1). But whether customers wind up paying the full increase depends on whether the proprietors pass it all on or absorb part.

The new tax will bring $5.5 billion in annual revenues to fund reconstruction of the federal Interstate Highway System and rehabilitation of the nation's infrastructure.

Stepped-up projects will provide 170,000 extra jobs in construction and related industries. After numerous delays Congress passed the act, and the President signed it last January.

The tax affects gas, diesel fuel, and motorboat fuel. It runs through September 1988, but Congress may modify it by then. It exempts state and local governments, private buses, and farm vehicles. It continues the 4-cent-a-gallon exemption for taxis through September 1984.

Its provisions are far reaching. Bigger and heavier trucks will be allowed on the road, helping truckers to offset the cost of the tax increase by carrying larger loads. States must allow trucks weighing up to 80,000 pounds on Interstate highways, up from 73,280 pounds.

Trucks may be longer, too. Vehicle lengths are set at 48 feet for a single-truck trailer, or 28 feet for each trailer in a double combination. States may not bar twin-trailer trucks. These limits apply to Interstate and so-called ''primary'' routes.

The new law was a bipartisan effort to repair deteriorated highways, finish the Interstate Highway System, and provide jobs. Mr. Reagan has insisted the measure isn't a jobs bill; Transportation Secretary Drew Lewis called it a vitally needed move to halt deterioration of crumbling US highways. Various lobbies clashed.

The truck industry opposed the bill, even though it allows for longer and heavier trucks, because it also imposes a heavier tax burden on these vehicles. Many truckers say the battle has just started; the American Trucking Association will seek relief from the next Congress, it says.

Whether the ordinary gasoline buyer finds the price of his fuel hiked 5 cents will depend on how much the suppliers absorb.

Some of the new provisions are far ranging. For example, one authorizes $20 million annually for fiscal 1984 and 1985 for enforcing the 55-mile-an-hour speed limit.

The new law requires that each state receive highway funds equal to at least 85 percent of the highway taxes its motorists pay.

In addition, it:

* Authorizes $1.6 billion in fiscal 1983 for bridge repairs and replacement costs.

* Exempts from the 5-cent-a-gallon tax gasohol - a mixture of gasoline and alcohol introduced in some areas as fuel. It is manufactured from sugar cane and other plants.

* Repeals taxes on lubricating oil, truck parts, and tread rubber.

* Sets higher, graduated taxes for tires over 40 pounds, exempting most passenger car tires.

Even business conventions held on US cruise ships get exemptions, so long as they stop at US ports or US possessions.

Passage of the complex measure brought bitter controversy in Congress with a clash of interest groups. The House adopted the conference report, 180 to 87, on Dec. 21; the Senate, 54 to 33, on Dec. 23.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK