You may be paying more every time you fill your gas tank — but the state isn’t making any more money on gas tax. Renee Mulvee in the Iowa Department of Revenue says somehow the steadily rising price of fuel gives people the notion there’s more gas tax being collected. Iowa charges a flat-rate gas tax of 20-point-7 cents a gallon. Mulvey explains it’s not a percent of the cost of gasoline sales, it’s strictly a per-gallon charge — and there’s no Iowa sales tax charged on gas. Most states are like Iowa, Mulvey adds, charging a flat rate per gallon. A few states also charge sales tax on total sales, and they do see revenue go up when the price goes up. She says the state could use more tax revenue. Motor-vehicle fuel tax goes to the road-use tax fund, to build and repair roads and bridges. Mulvey says not only is the state not taking in more gas tax, it could lose money if people start buying less gasoline…or if its cost forces them to curtail their spending on clothing, entertainment or other things that are subject to sales taxes.
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