Adjusts the motor fuel tax for inflation every two (2) years based on the inflation that has occurred in the previous two (2) years.
Summary
S0047 amends Rhode Island’s motor fuel tax statute to change how the gasoline tax inflation adjustment is calculated. Under current law, the tax is adjusted every two years based on inflation from the prior year; this bill would instead base each biennial adjustment on the cumulative Consumer Price Index for Urban Consumers (CPI-U) change over the previous two years. The adjustment would still be rounded to the nearest cent and could not reduce the tax below the existing statutory floor.
The bill also retains the existing monthly reporting and payment requirements for fuel distributors and the current per-gallon tax rate structure, while updating the timing and measurement method for inflation indexing. It includes a federal-compliance provision directing the state controller to create a restricted receipt account if federal law requires a portion of gasoline tax revenue to be dedicated to highway improvements. The act would take effect immediately upon passage.
Impact
This bill would amend Rhode Island General Laws § 31-36-7 in the chapter governing motor fuel taxes. Its main legal effect is to revise the inflation-indexing formula for the gasoline tax, changing the benchmark from a one-year inflation measure to a two-year CPI-U comparison. Fuel distributors would continue to report monthly gallons purchased, sold, or used and remit tax accordingly, but the tax administrator would apply the updated adjustment method beginning July 1, 2025 and every other year thereafter. The bill could affect gasoline prices, fuel distributors, motorists, and state highway-related revenue streams.
Sentiment
The available materials show no recorded committee testimony or votes, so there is no documented public debate in the provided record. Based on the bill text and explanation, the measure appears to be a technical revenue adjustment aimed at aligning the motor fuel tax with inflation over a longer measurement period. The overall tone of the proposal is administrative and fiscal rather than controversial on its face.
Contention
No specific points of contention are documented in the provided transcripts or voting history. Potential areas of disagreement, however, would likely center on the policy choice to index the gasoline tax to inflation, which can raise fuel costs over time, and on whether the state should use a two-year inflation lookback rather than the current one-year method. Stakeholders most likely to scrutinize the bill would include motorists, fuel distributors, transportation advocates, and taxpayers concerned about automatic tax increases.