Saturday, April 19, 2008

No Gas Tax Holiday for YOU, Tennessee

HT : Danny Newton

The TN General Assembly and TDOT would like you to know that if John McCain gets his gas tax holiday passed, you won't be joining the party after July 1. They have decreed that any reduction in the federal gas tax will trigger an equal hike in the TN gas tax. So you will have to drive to another State to get your holiday...unless the Department of Revenue sets up roadblocks at the State line. Here is TCA 67-3-206:

67-3-206. Maintenance of funding under highway trust fund. — [Effectiveness suspended until July 1, 2008. See subsection (b).]

(a) Notwithstanding any provision of law to the contrary, if the federal government reduces or eliminates any or all taxes imposed by title 26 of the United States Code and allocated by chapter 98 of that title of the federal highway trust fund, the existing state tax imposed on the sale and/or use of such products shall be adjusted so as to maintain the amount of funding for the Tennessee department of transportation generated by the federal tax. The adjustment in the state tax shall become effective simultaneously with the reduction in the federal tax. The department of revenue is directed to collect such taxes and allocate such taxes in their entirety, less the appropriate cost of administration, to the state highway trust fund for use by the department of transportation. If the federal goverment elects to increase any or all taxes imposed by title 26 of the United States Code and allocated by chapter 98 of that title to the federal highway trust fund after it has reduced or eliminated such taxes, the state tax on the sale and/or use of such products is reduced equal to the amount of the increase by the federal government. No amounts of revenue received pursuant to the provisions of this section shall be pledged specifically to the payment of debt service on any state bond or note.

(b) The provisions of this section shall cease to be effective until July 1, 2008, at which time this section shall have full effect of law.