Bill raising Tennessee’s gas tax passed into law

Tennessee Governor Bill Haslam talks about the commitment the state has to Volkswagen Wednesday outside the Tennessee Department of Transportation Management Center in Chattanooga. Tennessee General Assembly House Speaker Gerald McCormick listens, back right. The governor had just come from visiting with workers inside the plant Wednesday afternoon, Oct. 7, 2015. Tennessee Governor Bill Haslam talks about the commitment the state has to Volkswagen Wednesday outside the Tennessee Department of Transportation Management Center in Chattanooga. Tennessee General Assembly House Speaker Gerald McCormick listens, back right. The governor had just come from visiting with workers inside the plant Wednesday afternoon, Oct. 7, 2015.

By Andy Sher April 26, 2017 2 min read

NASHVILLE – That didn’t take long at all.

Gov. Bill Haslam on Wednesday signed his IMPROVE Act into law as soon as the bill reached his desk.

The bill raises gas and diesel taxes by six cents and 10 cents, respectively, over a three-year period, as well as several fees, including a $5 increase on annual car registrations.

It would bring in an estimated $350 million for the state’s dedicated highway fund, as well as local governments’ road and bridge needs.

But the new law also cuts several taxes in the general fund by some $410 million, including a 20 percent reduction in Tennessee’s 5 percent sales tax on groceries.