Sen. Cecil Staton Votes to Cut Gas Tax

Submitted by Senate Press

Tuesday, August 23rd, 2011

During the August special session of the Georgia General Assembly, Sen. Cecil Staton (R-Macon) voted to ratify Governor 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.

“Gas prices are high enough already,” Sen. Staton said. “It simply does not make sense for the state to try to squeeze a few more cents from already cash-strapped residents. Gas prices affect everyone. Even if you never drive, you end up paying gas tax in the cost of good that must be shipped to your local store.”

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.