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· State DOT, including the motor carrier services division, Collection costs: Electronic reporting system costs,
finance division, and motor fuel tax section; manual data input costs, transaction costs, collection
· State DOR; allowances, costs associated with debt collectors, and
· Board of Equalization; other indirect costs.
· Comptroller of Public Accounts;
· Department of the Treasury; and Follow-up telephone interviews and data transfers were
· Department of Taxation. used to complete the data-collection process.
Once the responsible agency was identified, individuals 4.2.5 Analysis of Cost Data
with knowledge of motor fuel tax administrative programs
were contacted and follow-on data-collection activities com- As outlined in Section 4.2.1, the primary sources of data
menced through the distribution of a survey. used to estimate the costs of administering motor fuel taxes
are the Form 556 data reported to FHWA by states. Addi-
tional data were collected through surveys from eight sample
4.2.4 Collecting Cost Data from states, which were chosen based on the criteria outlined in
State Agencies Section 4.2.2. This section presents the results of the cost
analysis using the methodology described earlier in this chap-
To collect cost data from state agencies, a questionnaire
ter. Note that in all cases, motor fuel tax collection costs
(see Appendix B) was designed and distributed to the sample
include those associated with both gasoline and special fuels.
states. Once a survey was completed, an additional contact
Results addressed in this section include
was made to discuss the data provided by the respondent. The
questionnaire included the following information:
· Estimated tax collections and costs of motor fuel tax admin-
istration for the entire United States for 2003 through 2007,
· The objectives of the study
· Estimated tax collections and costs of motor fuel tax admin-
Examine, estimate, and compare administrative, collec- istration in 2007 for every state in the United States,
tion, and enforcement costs of motor fuel tax programs · Administrative costs for states grouped together based on
Examine the factors that drive administrative, collec- the criteria outlined in Section 4.2.2 (e.g., point of taxation
tion, and enforcement costs or international border state),
· Topics covered · Detailed cost and system characteristics data for each of the
Background information: Name of respondent, agency eight states included in the sample frame, and
responsible for tax collection and enforcement, and con- · Summary information acquired to date through completed
tact information surveys.
Auditing costs: The types of administrative costs currently
incurred when implementing a motor fuel tax, the num-
4.2.6 Summary Data for 2003 through 2007
ber of auditing staff required for motor fuel taxes, costs
associated with licensing auditors, return on investment As shown in Table 20, total motor fuel tax collections for all
of auditing efforts states have grown from $33.3 billion in 2003 to $39.4 billion
Enforcement costs: Presence and cost of motor-fuel track- in 2007. Data reported in Table 20 represent net collections
ing systems, on-road inspections of motor fuel, licensing with distributor allowances deducted from gross tax collec-
and bonding of motor fuel tax distributors, capital and tions. Average annual collections during that time period were
other indirect enforcement costs $35.7 billion.
Table 20. Net state motor fuel tax collections and collection expenses
(20032007) ($000s).
2003 2004 2005 2006 2007 Average
Net motor fuel tax 33,276,518 34,696,386 35,038,064 36,278,026 39,377,467 35,733,292
collections
Collection expenses 326,377 494,404 309,325 373,615 405,096 381,763
Collection expense as 1.0% 1.4% 0.9% 1.0% 1.0% 1.1%
percentage of tax
collections
Source: FHWA, Highway Statistics, 20032007
