School Buses Receive Free Ride On Gas Tax

Legislation passed by the General Assembly this year grants an exception from the motor fuel tax for school buses, effective July 1, 2016.

School buses transporting students in Maryland will soon be exempt from the State’s motor fuel tax.

The legislation was originally drafted to only apply to Washington County school buses, but was later amended to be statewide. As enrolled, the bill exempts school system vehicles used to transport students, or school contractor vehicles used to transport students from paying the State’s motor fuel tax when they are purchasing fuel.

According to the Department of Legislative Services, as a result of the new law, Transportation Trust Fund revenues will decline by $5.6 million in fiscal year 2017. The amount of lost revenues will continue to grow in future years, reaching $6.7 million in 2021.

County and municipal governments use Transportation Trust Funds distributed to them by the State to fund local transportation projects. As a result of this legislation, the State will distribute $331,400 less in local highway user revenues to local governments in fiscal 2017, and potentially $355,800 less in fiscal 2021, according to the Department of Legislative Services.

The Maryland Association of Boards of Education celebrates the cost-savings acquired through this new law,

MABE greatly appreciates the leadership and initiative of the Washington County Board of Education in adopting this legislative priority and successfully advocating for this legislation. As amended to be a statewide bill, all local boards will benefit from these cost savings.

For more information, see the bill summary page and the Maryland Association of Boards of Education’s 2016 Legislative Session Summary.