Notice Concerning Inflation Adjusted Fuel Tax Act and Applicable to IFTA Motor Carriers That Will Take Effect on January 1, 2024

Issued: December 1, 2023

Pursuant to MCL 207.1008, the Department of Treasury shall calculate the motor fuel tax rate. Under the law, the Calendar Year (CY) 2024 motor fuel tax rate is calculated by taking the CY 2023 motor fuel tax rate and adjusting by the lesser of the FY 2023 U.S. inflation rate or five percent.

Using the definition of inflation rate in MCL 207.1003(3)(l), the inflation rate for the CY 2023 calculation is calculated as follows: (1) The average of the 12 monthly values for October 2021 through September 2022; (2) The average of the 12 monthly values for October 2022 through September 2023; (3) The ratio of (2) divided by (1) minus one is calculated to arrive at the percent change.

Based on data released through October 12, 2023, by the United States Department of Labor, the inflation rate for the fiscal year ending September 30, 2023, as measured by the U.S. CPI for all urban consumers, is a 5.1 percent increase.

Therefore, the CY 2024 motor fuel tax rate equals the CY 2023 motor fuel tax rate of 28.6 cents increased by 5.0 percent: 28.6 cents per gallon x 1.05 = 30.0 cents per gallon.

Under MCL 207.1008, the motor fuel tax rate that will be in effect on January 1, 2024, is 30.0 cents per gallon.