Maryland’s fuel taxes to jump July 1

Updated May 24, 2013

Maryland Gov. Martin O’Malley has signed a bill that will implement a series of fuel taxes to fund transportation projects.

On May 16, the Democrat governor signed the Transportation Infrastructure Investment Act, which will invests an annual $800 million in highway and transit projects. On July 1, a sales tax rate on motor fuels will start at 1 percent. In 2015, it will increase to 2 percent that January and 3 percent that July, according to the Maryland Motor Truck Association.

If Congress passes legislation permitting states to collect sales tax from Internet purchases, the sales tax will remain at 3 percent. However, if Congress does not approve this measure, motor fuel tax will increase during 2016 to 4 percent in January and 5 percent in July.

The tax hike is based on the average retail price of the lowest grade of gas after subtracting state and federal taxes. If the average retail price of low grade gasoline is $3.72 gallon, the figure used would be $3.30 after a 42 cent decrease for taxes.

A 3 percent sales tax rate then would yield a net increase of 9.9 cents per gallon that would be added to gas and diesel prices, the association stated.