Legislative Watch 
LEGISLATIVE
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9/18/06-A legislative interim committee is throwing around the idea of pushing a proposal to create a “border tax zone” where the state’s per gallon tax on gasoline and diesel would be reduced to make prices more competitive with those of neighboring states. The savings could be as much as 7 cents for gasoline and 12 cents for diesel.
A similar effort was sought during the 2006 session. It was eventually deferred to the Legislature’s Joint Tax Committee for review.
The panel recently heard testimony on the effort to create a buffer zone within 3,000 feet of the state line or inside the city limits of border cities, The Associated Press reported. In those areas, the Kansas’ per gallon tax on diesel and gasoline would be reduced to just 1 cent above the price charged in the neighboring state.
Kansas now charges 25 cents per gallon for gasoline and 27 cents for diesel. Reducing the price along the state’s borders would more closely resemble the per gallon taxes of Colorado, Missouri, Nebraska and Oklahoma.
In Colorado, the per-gallon tax on gasoline is 22 cents and 20.5 cents for diesel. Missouri’s per gallon taxes on gasoline and diesel are 17 cents while Nebraska charges 27 cents for both. In Oklahoma, the per-gallon tax on gasoline is 17 cents and 14 cents for diesel.
The only state that charges a rate higher than Kansas is Nebraska.
The buffer zone idea is in response to Kansas retailers located near the state line who say they are at a competitive disadvantage because their customers drive into other states to avoid paying higher fuel taxes.
Opponents say the proposal would cost the state $18.8 million in gasoline and diesel tax revenue. If approved, the state’s highway construction fund would have to go without $12.5 million.
The committee is expected to forward recommendations for consideration during the session that begins in January.
