South Dakota Is Latest State to Raise Fuel Tax

Beginning today, drivers will pay six cents more, as part of larger package to fund transportation in the state.

April 01, 2015

PIERRE, S.D. – Starting today, the state gas tax in South Dakota will increase by six cents, to 28 cents. The increase is part of the recently approved SB 1, which addresses a number of transportation-related issues in the state.

The increase in fuel tax is expected to generate an estimated $40.5 million a year in additional funding, with most of the amount going to state work, with some placed into a local bridge fund by the state Transportation Commission.  SB 1 also includes a 1% increase to the excise tax on vehicles, which is expected to generate about $27 million to go toward the same fund. The bill would also allow counties and townships to impose additional property taxes to be used for construction and maintenance of roads and bridges.

The measure, SB 1, was the first bill introduced in the 2015 legislative session. State Senator Mike Vehle, chairman of the Senate Transportation Committee, had previously led a study of highway needs and highway financing, which eventually led to the extensive SB 1 measure, which also includes an increase of license plate fees and speed limit increases from 75 to 80 on interstates.

South Dakota most recently raised the state tax on gasoline and diesel for highway use in 1999, but governors since then have opposed highway-tax increases until now.

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