The plan would cut the minimum markup on gasoline down from just over 9 percent to 3 percent. Under current law, certain products, including gasoline, are required to be sold at a percentage above cost. That change would help offset any price changes for consumers made by the sales tax application, Kooyenga said.

Owners of hybrid vehicles would pay an additional registration fee of $30 per year, while owners of electric vehicles would pay $125 per year. Limits would be placed on local governments' ability to enact a wheel tax.

"We believe this is a solid step in the right direction that is neutral to the taxpayer but solves the long-term sustainability problems we’ve been seeing in our transportation funding," said Joint Finance Committee co-chairman Rep. John Nygren, R-Marinette.

Compared to the governor's budget proposal, the proposed changes to transportation funding would increase general fund revenue in the 2017-19 biennium by $124.4 million and increase transportation fund revenue by an estimated $314 million over the same time period, according to the nonpartisan Legislative Fiscal Bureau.

All told, the proposal includes a minimum of $450 million in tax cuts, Kooyenga said. The plan makes sweeping changes to the state's tax code, all of which Kooyenga said align with his party's conservative principles.