HARTFORD, Conn. — Connecticut’s diesel tax will increase by 9 cents per gallon on July 1 after a scheduled rate adjustment released Wednesday by the state’s tax office.
The tax, which is currently 40.1 cents per gallon, will increase to 49.2 cents per gallon, according to a letter from Revenue Services Commissioner Mark Boughton to top Democrats and Republicans on the General Assembly’s tax-writing committee and to his budget director. State law requires that it be updated annually, based on a complex formula calculated by the Department of Revenue Services that considers daily fuel prices at two terminals over the prior 365 days.
The state’s fixed price diesel tax was created more than a decade ago to provide predictability for businesses. But this year, it was unclear what the new rate might be, considering the sharply rising prices. Some had predicted the new rate could increase by as much as 15 to 20 cents per gallon, including Democratic Gov. Ned Lamont’s Republican challenger in the 2022 gubernatorial race, Bob Stefanowski.
The rate will remain in effect until June 30, 2023.
Legislative Republicans recently called for a special legislative session to cut taxes beyond the roughly $500 million in revenue changes included in the newly adjusted state budget that was approved by mostly Democrats. Both GOP lawmakers and Stefanowski have called for suspending the state’s diesel tax, arguing it’s increasing the price of goods of services at a time of high inflation.
“Higher costs for goods mean higher inflation, and an even more expensive state,” Stefanowski said in a written statement issued Wednesday. “I urge Governor Lamont to suspend all state taxes on gas and diesel to help residents get through the current crisis that he and President Biden have created.”
Max Reiss, spokesperson for Lamont, said last week that a special session “is not on the table” for now. Rather, he said, the administration is focusing on implementing the various tax reductions that are set to take effect in the new fiscal year.
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