Gas tax up, food tax down starting midnight July 1st

(Photo: WKRN)

NASHVILLE, Tenn. (WKRN) – Tennessee Governor Bill Haslam’s “IMPROVE Act” goes into effect at midnight on July 1.

The new law raises fuel taxes across the state, but offsets that increase with cuts to food and some business taxes.

It’s Tennessee’s first gas tax increase in nearly 30 years.

The IMPROVE Act is meant to address nearly $11 billion in road needs across the state.

On July 1, the tax on a gallon of unleaded will go up by four cents.

Unleaded gas will increase by an extra penny per gallon in each of the next two years, for a total increase of six cents.

Diesel will go up by four cents July 1, followed by a three cent increase in 2018 and 2019 before it’s capped.

Those increases are meant to be offset by bringing down food taxes from 5 percent to 4 percent.

The Transportation Coalition of Tennessee, which supported the IMPROVE Act, says average Tennesseans will save more at the store than they pay at the pump.

According to the Coalition, the average cost of family groceries is $163.90 per week. The 20 percent cut to food taxes will result in savings of $1.64 per week, or $85.22 each year.

The gas tax increase and added registration fees will result in an added $41.99 a year per average one-car family, or $62.33 for a two-car family, according to the Coalition.

The Transportation Coalition of Tennessee says that means an average family tax savings of $22.89 to $43.23 per year.

Public opinion on the move is mixed.

Daryl Wooden, who rides his motorcycle to work most days, doesn’t want to pay more for gasoline.

But riding a motorcycle, he knows firsthand just how bad Tennessee roads are.

“I hate to see any more taxes put onto the people,” said Wooden. “But if it helps the road situation and alleviates some of the traffic problems we’re dealing with now, I think we’d be better off to try and get ahead of it now than do something later. I think now is the time.”