Notice Concerning Inflation Adjusted Fuel Tax Rate and Applicable to IFTA Motor Carriers That Will Take Effect on January 1, 2025

Issued: November 27, 2024

Pursuant to MCL 207.1008, the Department of Treasury shall calculate the motor fuel tax rate. Under the law, the Calendar Year (CY) 2025 motor fuel tax rate is calculated by taking the CY 2024 motor fuel tax rate and adjusting by the lesser of the FY 2024 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 2024 calculation is calculated as follows: (1) The average of the 12 monthly values for October 2022 through September 2023; (2) The average of the 12 monthly values for October 2023 through September 2024; (3) The ratio of (2) divided by (1) minus one is calculated to arrive at the percent change.

Based on data released through October 10, 2024, by the United States Department of Labor, the inflation rate for the fiscal year ending September 30, 2024, as measured by the U.S. CPI for all urban consumers, is a 3.1 percent increase.

Therefore, the CY 2025 motor fuel tax rate equals the CY 2024 motor fuel tax rate of 30.0 cents increased by 3.1 percent: 30.0 cents per gallon x 1.031 = 30.93 cents per gallon.

Under MCL 207.1008, the motor fuel tax rate, which is to be round up to the nearest 1/10 of a cent, will be in effect on January 1, 2025, is 31.0 cents per gallon.