Lawmakers ratify gas tax freeze

 

In other action during the special session, lawmakers voted to ratify Gov. Nathan Deal's Executive Order freezing the state's gas tax, creating a beneficial tax break for Georgia families during the state's hard economic times.

 

During the first half of 2011, gas prices spiked dramatically spurring the governor to issue an executive order in June of 2011 suspending the collection of a portion of state taxes on sales of motor fuels and aviation gasoline. In order for the executive order to be extended it was necessary that members of the House and Senate approve the executive order during the 2011 Special Session. The tax increase would have been due to a biannual adjustment to the state's motor fuel tax.

 

Georgia's gas tax comes with several different parts: a fixed 7.5 cent per gallon excise tax charged on gasoline purchased in our state and a state sales tax of 4 percent calculated and converted to a per gallon cost based on the average retail price for midgrade gasoline during the previous six months. These two taxes, along with an 18 cent per gallon federal excise tax, are collected at the retail distribution level and built in to the cost of the gasoline. Local governments can add a variety of local option sales taxes on to the retail cost of gasoline. The state's 4 percent sales tax on gas is recalculated twice a year unless the price varies (up or down) by 25 percent or more, which triggers an immediate recalculation of the cents per gallon tax rate.

 

For example, in March of this year, fuel prices soared high enough to trigger a recalculation. The state's sales tax portion increased from the 10.1 cents per gallon (as established on January 1, 2011) to a rate of 12.9 cents per gallon which took effect on May 1. Had the governor not issued his executive order to prevent an increase, the sales tax portion of the gas tax would have increased again on July 1 (the normal bi-annual recalculation date) all the way up to 14.5 cents per gallon.   

 

Also during the special session, Gov. Deal and leaders of the Republican majority failed to reach agreement on legislation that would have moved next year's regional referendums on a one-cent sales tax to pay for transportation projects (T-SPLOST) from the primary election day on July 31 to the general election on Nov. 6.

 

Before abandoning the proposal, the Governor said, "This will give us broader participation, and we think broader participation is important." Voters in 12 multicounty regions will decide whether to levy the sales tax in their counties to pay for highways and other transportation projects in their regions over the next 10 years.