Vehicle registration taxes also going up, including a surcharge for electric cars
Drivers in Michigan will pay 7.3 cents more per gallon in gasoline taxes starting Sunday, thanks to a package of transportation-related tax hikes signed into law in 2015 by Gov. Rick Snyder. Truckers will pay an additional 11.3 cents per gallon for diesel fuel tax.
The measures are expected to provide $1.2 billion more for transportation each year when fully phased in in 2021, according to the House Fiscal Agency, with most of the increase slated for road repairs. Of the $1.2 billion, $634 million will be new taxes. The money comes from substantial increases in diesel fuel, regular gas and vehicle registration (license plate) taxes.
Michigan motorists currently pay a gasoline tax of 49.98 cents per gallon, counting state and federal taxes. This is above the national average of 48.08 cents per gallon. Those numbers are as of Nov. 1.
The current state tax on gasoline, which is 19 cents per gallon, will increase to 26.3 cents per gallon on Jan. 1. The diesel tax of 15 cents per gallon is going up by 11.3 cents, making the state tax on gasoline and diesel equal.
Vehicle registration taxes paid to renew license plates are going up 20 percent on most vehicles, payable when current tabs expire on the owner's birthday.
A new surcharge on electric vehicle registrations also begins Sunday. The rate is $30 per year for hybrid vehicles — whose owners support the roads by paying some gas tax — and $100 per year on pure electric cars, whose owners pay no gas tax.