Fuel tax receipts increase

DES MOINES - March fuel tax collections increased by 24 percent. But state officials say the 10-cent per gallon increase in the state's gas tax that took effect March 1 shouldn't get the credit for the $8.2 million boost in revenue to Iowa's road-use tax fund.

A 12-month revenue report issued Wednesday by the Legislative Services Agency indicated that fuel tax receipts for Iowa rose to $42.4 million last month – a 24 percent increase over the $34.2 million in monthly state tax collected one year ago.

According to the report, the fuel tax revenue increase in March 'likely was the result of deposit timing issues that will reverse in April.”

Stuart Anderson of the state Department of Transportation's planning, programming and modal division said he doubted the March fuel tax receipts reflected the higher rate due to reporting and tax collection lags. Also, the higher tax rate that took effect March did not apply to existing inventories at Iowa pumps, he said.

State taxes collected at Iowa terminals in March have to be deposited with the Iowa Department of Revenue by the end of April, Anderson said, so the increased money brought in by the higher tax rates would not be reflected in the latest LSA report and may not be fully known until next month's report.Anderson said last month's increased fuel tax revenue could reflect a boost in traffic volumes on Iowa roadways, noting that 'according to our Automated Traffic Counters, we are seeing more traffic in Iowa in 2015, year-to-date, than we had in 2014 so that's part of the reason as well.”

State lawmakers passed and on Feb. 25 Gov. Terry Branstad signed a 10-cent gas tax increase whereby the state fuel tax increased to 31 cents a gallon for regular gasoline, 29 cents on each gallon of ethanol-blended gasoline and 32.5 cents per gallon for diesel fuel effective March 1. Backers projected the higher user fees would generate more than $200 million annually to help address a yearly shortfall in transportation funding.

Overall, the LSA report indicated that state tax collections rose by four-tenths of 1 percent, or $29.7 million, over the last 12 months – totaling nearly $7.583 billion compared to the $7.553 billion collected for the 12-month period that ended March 30, 2014. State tax collections for the month of March were up 2 percent compared to March 2014.

However, LSA senior tax analyst Jeff Robinson said he expected to see a positive rebound in state tax collections once revenue for April and May is tabulated. April 30 is the deadline for state income tax returns to be filed and May traditionally is the largest month for state tax receipts.Federal tax changes skewed Iowa figures a year ago in part due to a state law that allows Iowans to deduct their federal tax liability on their state returns. Robinson said the 'see-saw impact is going in the other direction” in the current fiscal year compared to a year ago.

'The 12-month revenue increase slipped a bit but remained positive at 0.4 percent,” Robinson said in the 12-month report. 'The processing of tax year 2014 individual income tax returns should provide a significant revenue boost during the months of April and May.”