Nevada DMV outlines Highway Fund revenue sources; Clark and Washoe lead fuel-tax indexing

The Nevada Department of Motor Vehicles briefed the Senate Committee on Revenue and Economic Development on March 1 about how vehicle-related revenues flow to the highway fund, counties and schools and how fuel-tax indexing is concentrated in Clark and Washoe counties.

Angela Smith Lam, deputy director of the Department of Motor Vehicles, said DMV processes roughly 8 million transactions a year and that the department collected about $1.8 billion in fiscal 2024. "Revenue collected by DMV is made up of various registration and licensing fees with a little over 36% being distributed to the highway fund," Bethany Musselman, DMV fiscal operations administrator, told the committee. Musselman also said roughly 85% of DMV-collected revenue is from taxes, including governmental services tax, sales tax, and fuel taxes.

DMV officials walked the committee through the revenue streams and statutory allocations they administer. Governmental services tax (GST) and supplemental GST are collected at vehicle registration and are calculated on the vehicle’s depreciated value; a commission (about 6%) is retained by DMV and the remainder is distributed to counties and school funds according to Department of Taxation formulas.

Karen Stull, motor carrier division administrator, gave details on fuel-tax collections. For fiscal 2024, DMV collected about $873 million in fuel-related revenues, of which about $663 million was from motor fuels (gasoline) and about $210 million from special fuels (including diesel). Stull told the committee the state gasoline tax of 23¢ per gallon is composed of multiple components; some portions are distributed to counties based on population and road-mile formulas. Counties may also enact option fuel taxes; DMV reports about $106 million annual collections from county option fuel taxes.

Stull noted that Clark and Washoe Counties have enacted fuel-indexing on motor fuels and special fuels; as of FY2024 indexed-tax collections for those counties totaled about $268.6 million, with Clark County accounting for about 64% of the gasoline index collections and Washoe 36% on gas. For special fuels indexing, Clark represents 54% and Washoe 46% of the indexed collections reported to DMV.

The DMV presentation also explained the Petroleum Cleanup Fund fees that suppliers pay and which the Nevada Division of Environmental Protection (NDEP) administers. DMV staff said they collect about $13.7 million annually for petroleum cleanup fees; NDEP pays claims from that fund. Statutory provisions require any excess amounts above a threshold be remitted to NDOT for road construction and maintenance, distributed by county population tiers.

Committee members asked clarifying questions. Senator Cruz Crawford asked why only Clark and Washoe have fuel tax indexing. Karen Stull explained that the indexing option was authorized by state law and that Clark and Washoe enacted indexing while other counties either voted it down or did not put it forward; a separate 2019 law (Senate Bill 48) enabled smaller counties to enact diesel-option taxes and ten counties have done so for diesel.

Senators also raised the longer-term policy issue of electric vehicles and road funding. Angela Smith Lam said Nevada’s tax structure has not kept pace with vehicle efficiency and EV adoption: "With them not contributing it certainly has an impact," she said, referring to EVs and per-mile funding of roads. DMV officials said the department forecasts modest revenue growth of about 2.89% over the next biennium but warned that a cap on highway fund appropriations to DMV operations is scheduled to revert from the temporary 27% back to 22% in 2026 unless extended.

DMV staff offered to provide additional historical data and to continue refining revenue projections in the department’s "blue book" updates planned for March or April.

The committee did not take any formal votes during the briefing; the DMV presentation concluded and the committee moved to public comment.