USA Businesses Enjoying Some of the World’s Lowest Fuel Costs, According to UHY Study: 12% Tax on Diesel Among the Lowest Rates of Any Country

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The USA enjoys some of the lowest gasoline pump prices among the major world economies, according to a new study by UHY, the international accountancy network.

The USA enjoys some of the lowest gasoline pump prices among the major world economies, according to a new study by UHY, the international accountancy network.

UHY explains that the USA has an extremely low tax rate on fuel, levying just 13% on gasoline and 12% on diesel, considerably less than many other major developed economies, in particular European countries.

This means that the cost of filling the tank * of a Ford Transit van with diesel in the US is $83.48 USD, less than half the cost in the UK, where the price of diesel is highest.

The cost of filling the tank of a Ford Transit van with gasoline in the US amounts to $75.16 USD, less than half the cost of filling up in Denmark, where gasoline prices are highest.

UHY says that as diesel is used in the majority of commercial vehicles, this comparatively light tax burden is good news for businesses. **

In comparison, the UK, France and Germany all levy taxes of at least 60% on gasoline, and between 40-60% for diesel.

UHY says that while environmentalists argue that fuel taxes are important in cutting greenhouse gas emissions, the transport lobby and small and medium businesses say that keeping the costs down is vital for all businesses.

UHY adds that this study is a reminder of the importance of maintaining tight control on the levels of business taxation, especially as the recovery from recession starts to gather pace.

Scott Miller, Partner and National Petroleum Practice Leader of UHY LLP, says: “Taxes on fuel are an area in which the burden on US businesses is far lighter than in many other countries, which is likely to be a significant boon in helping to stimulate growth and speed up our recovery from the recession.”

“The United States is already quite a distance ahead of the UK, France and Germany in its economic recovery, and its lower levels of taxation in areas like fuel may well be helping to stimulate growth.”

“Keeping taxes on diesel low is particularly beneficial for fast-growing small and medium businesses that run fleets of commercial vehicles, especially in sectors like distribution and retail. These businesses can be key drivers of economic recovery.”

However, UHY points out that the federal fuel tax, unchanged for 20 years, is under pressure. The United States currently levies a federal fuel tax of 18.4 and 24.4 cents per gallon on gasoline and diesel, which alongside state taxes on fuel consumption contribute to an average US fuel tax of 13% on gasoline and 12% on diesel.

In late 2013, a proposal was introduced in Congress to increase that fuel tax to 33.4 cents per gallon on gasoline and 42.8 cents per gallon on diesel.

Scott Miller explains: “Increasing the federal fuel tax is a political challenge that few US politicians would be enthusiastic about. While some argue that a fuel tax increase is needed to fund transportation infrastructure, others maintain any tax increase would be a drag on the economy. At the state level, with decreasing gas consumption and increasing infrastructure costs, many states are considering gas tax increases or other tax changes to make up for the lost gas tax revenue.”

Filling the tank of a Ford Transit with diesel – proportion of cost made up of fuel cost and tax (US $)

(See chart 1)

Filling the tank of a Ford Transit with gasoline – proportion of cost made up of fuel cost and tax (US $)

(See chart 2)

Filling the tank of a Ford Transit with autogas – proportion of cost made up of fuel cost and tax (US $)

(See chart 3)

  • Tank size: 80 litres for petrol and diesel, 72 litres for LPG.

** Tax rates include VAT, some or all of which may be reclaimed by businesses in some countries, including EU member states.

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About UHY LLP
UHY LLP, a licensed CPA firm, provides audit and other attest services to public and private companies. UHY Advisors provides tax and consulting services to a variety of sectors. UHY Advisors FLVS provides forensic, valuation, intellectual property, electronic discovery and international arbitration services to law firms and their clients. Many of these services grew from client business needs and their requests for assistance in a variety of areas of expertise.

UHY LLP, operating in an alternative practice structure with UHY Advisors, forms one of the largest professional services firms in the US. While that scale might provide confidence for some clients, others tell us our greatest value is the way we bring these resources to bear to help address today’s evolving business challenges. It’s a philosophy we call “The Next Level of Service”. To learn more visit http://www.uhy-us.com.

All of the above entities are members of UHY International, a global network of independent professional services firms that provide audit, tax and consulting services around the world. UHY International member firms comprise one of the top international accounting networks in the world. As a member firm, we provide our clients with resources in business centers strategically located around the globe. We are an active member in this organization with significant participation that brings the power of an international network to bear for our clients.

UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.

Additional Information for Editors:

UHY press contact:
Dominique Maeremans
+44 20 7767 2621
d.maeremans(at)uhy(dot)com

About UHY
Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 275 major business centers in 87 countries.

Our staff members, over 7,626 strong, are proud to be part of the 25th largest international accounting and consultancy network/association. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to http://www.uhy.com.

UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit http://www.forumoffirms.org.

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Shannon Gnesda
UHY LLP
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