Conditions of Use for Fuel Taxes

Constitutional Fuel Tax (5th & 6th Cent*)

Description
The Constitutional Fuel Tax was authorized by the Florida Constitution in 1941 and approved by the voters in 1943.    It is levied at the rate of 2¢ per gallon on motor fuel.  Proceeds are allocated to the County in accordance with a distribution formula consisting of county area, county population, and the number of gallons of motor fuel sold in the county.

The Department of Revenue transfers the tax to the State Board of Administration for distribution to the County.  Funds are first used for any road and bridge related debt service payments.  Of the remaining amount, 20% is returned to the County.  The rest of the proceeds are forwarded to the State of Florida, Department of Transportation.  

Use of Revenue
Proceeds must be used for the acquisition, construction, and maintenance of roads.  Maintenance may include construction and installation of traffic signals, sidewalks, bicycle paths, and landscaping. They may also be used as matching funds for transportation-related grants.

*Use of the term 5th and 6th cent is historical.  Previous to passage of the Constitutional Fuel Tax in 1943, the State Fuel Tax was 4¢ per gallon.  This historical nomenclature also applies to the 7th cent and 9th cent taxes.

County Fuel Tax (7th Cent)

Description
The County Fuel Tax is levied at the rate of 1¢ per gallon on motor fuel.  The legislative intent of this tax is to reduce the County’s reliance on ad valorem taxes.  Proceeds are allocated to the County in accordance with a distribution formula factoring county area, county population, and the number of gallons of motor fuel sold in the county.  The State of Florida, Department of Revenue administers this tax. 

The county’s distribution formula is applied to a statewide estimate of total county fuel tax collections, net of the deductions for the general revenue service charge, administrative costs, motor fuel refunds and dealer collection allowances, to calculate the revenue estimate. 

Use of Revenue
Proceeds must be used for transportation related expenditures.  The expenditures must be for acquisition of rights-of-way; construction, reconstruction, maintenance and repair of transportation facilities, roads, bridges, bicycle paths and pedestrian pathways.  Proceeds may also be used for debt service of transportation related projects.  The County has not pledged any proceeds from this tax as security for debt obligations.

Local Option Fuel Tax

Description
The Local Option Fuel Tax may be levied at the rate of 1¢ to 6¢ per gallon on motor fuel. Citrus County levies the entire 6¢ per gallon on motor fuel.  The tax is levied at the rate of 6¢ per gallon on diesel fuel, whether or not a county has levied any of the tax on motor fuel.  Proceeds are distributed to the County in accordance with an interlocal agreement established between the County and municipalities located within the County’s border.  Any changes in the tax rate must be made prior to July 1 to be effective January 1 of the following year.  The State of Florida, Department of Revenue administers this tax.

The Board of County Commissioners receives 90.95% of the distribution allocated to the County.  The cities of Inverness and Crystal River share in the remaining 9.05%. 

Use of Revenue
Proceeds must be used for transportation expenditures.  The expenditures must be for public transportation operation and maintenance; roadway and right of way maintenance and drainage; street lighting; traffic signs, signals, and pavement markings; and bridge maintenance and operations.  Proceeds may also be used for debt service of transportation related projects. 

Ninth Cent Fuel Tax

Description
The Ninth Cent Fuel Tax may be levied at the rate of 1¢ per gallon on motor fuel. Citrus County began levying this 1¢ per gallon tax on January 1, 2006 and sunsets the levy on December 31, 2034. The 1¢ per gallon tax on diesel fuel is levied in every county, whether or not the county levies the tax on motor fuel. Counties may, but are not required to, share the proceeds of this tax with municipalities located within its borders.  Citrus County has not elected to share these proceeds. The tax must be authorized by an ordinance adopted by an extraordinary vote of the governing body or voter approval in a countywide referendum. It must be levied before July 1 to be effective January 1 of the following year. The State of Florida, Department of Revenue administers this tax.

Use of Revenue
Proceeds must be used for transportation expenditures. The expenditures must be for public transportation operation and maintenance; roadway and right of way maintenance and drainage; street lighting; traffic signs, signals, and pavement markings; and bridge maintenance and operation. Proceeds may also be used for debt service of transportation related projects. 

Second Local Option Fuel Tax

Description
The 2nd Local Option Fuel Tax may be levied at the rate of 1¢ to 5¢ per gallon on motor fuel. Citrus County began levying the entire 5¢ per gallon on January 1, 2006 and sunsets the levy on December 31, 2034.  Proceeds are distributed to the County in accordance with an interlocal agreement established between the County and municipalities located within the County’s border.  Any changes in the tax rate must be made prior to July 1 to be effective January 1 of the following year.  The State of Florida, Department of Revenue administers this tax.

The Board of County Commissioners receives 90.95% of the distribution allocated to the county.  The cities of Inverness and Crystal River share in the remaining 9.05%.

Use of Revenue
Proceeds must be used for transportation expenditures needed to meet the requirements of the capital improvement element (CIE) of the adopted comprehensive plan or to meet transportation problems that are critical for building comprehensive roadway infrastructure.  The expenditures include construction of new roads, resurfacing existing paved roads, and paving existing graded roads to mitigate adverse environmental impacts.  Routine maintenance of roads is not considered an authorized expenditure. Proceeds may also be used for debt service of transportation related projects.  The County has pledged the 2nd Local Option Gas Tax as security for the financing on the County Road 486 and 491 improvement projects.