If you are a Californian commercial fuel provider, it’s likely you’ve been paying close attention to new fuel tax regulations coming out of Sacramento. That’s because as of November 1, 2017, Californians started paying higher excise taxes on the sale of gasoline and diesel fuel. Of course, this doesn’t just apply to commercial fuel users.

Although businesses that use commercial fuel may definitely feel the pinch from a rise in diesel prices, everyday consumers — which we all are — will also see some pain at the pump. Let’s dig a little deeper into the details to get a good look at what to expect.

From personal to commercial fuel: It’s all taxed.

Achieved through Senate Bill 1, California’s new excise tax adds 12 cents-per-gallon to current fuel prices. The tax increase itself is part of a greater effort to fund badly-needed infrastructure, road, and maintenance improvements across the state.

Senate Bill 1 was originally approved by Governor Jerry Brown on April 28 and it also covers vehicle licensing fees, which will also see an increase. The bill also lays out who will benefit the most from these regulatory funding measures.

The state’s gasoline excise tax prior to November 1 was 29.7 cents-per-gallon, which was factored into an excise tax increase passed in 2010. As of November 1, however, the new tax jumped to 47.3 cents per gallon.

For commercial fuel users relying on diesel products, the base excise tax will increase from 16 cents-per-gallon to 36 cents-per-gallon. It is important to note that fuel taxes of all types are also subject to local and state taxes, so the real number could be far higher.

What commercial businesses can expect.

Businesses operating equipment that utilizes commercial fuel will find that commercial trucks are not exempt from retrofitting requirements. This is based on specific emissions requirements laid out in the final bill.

Large commercial trucks will not be required to retrofit their emissions systems under the following two scenarios:

– Thirteen years from the model year the engine and emission control system are first authorized for use, or;
– The earlier of the vehicle traveling 800,000 miles or reaching 18 years from the model year the engine and emission control system are first authorized for use.

Although fleets operating trucks utilizing diesel commercial fuel will see some reprieve from retrofitting requirements in this bill, as outlined above, that reprieve will start to disappear in 2020, when commercial fuel-using vehicles will find themselves subject to more strict controls regulating whether or not such vehicles can even be registered in the first place.

Registration guidelines are also outlined in the bill. The California Department of Motor Vehicles will be under a mandate to refuse registration, transfer of registration, or registration renewal for trucks using diesel-powered commercial vehicles that weigh between 14,001 and 26,000 pounds.

There are several conditions outlined in this requirement:

– On Jan. 1, 2020, any vehicle model year 2004 or older;
– On Jan. 1, 2021, any vehicle model year 2007 or older, and/or;
– On Jan. 1, 2023, any vehicle model year 2010 or older.

Rules regulating vehicles that are 26,000 pounds are heavier fall under the following registration restrictions:

– On Jan. 1, 2020, model years 2000 and older;
– On Jan. 1, 2021, model years 2005 and older;
– On Jan. 1, 2022, model years 2007 and older, and/or;
– On Jan. 1, 2023, model years 2010 and older.

As with any other controversial bill passed in California, an opposition ballot measure is already circulating in an attempt to kill the tax. Will it pass? Only time will tell.

One thing we can assure you is that we will be right here reporting on it for you. Whether you drive a passenger car or run a large business that utilizes commercial fuel, our job is not just to provide you with service you can rely on, but to keep you up-to-date on industry-related happenings within our community.

If you or your business is looking for commercial fuel in Bakersfield, Fresno, San Luis Obispo, Santa Clarita and Ventura areas, look no further than your friends at Greg’s Petroleum Service. We look forward to hearing from you!