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Georgia: Perdue halts gas sales tax increase
Gov. Sonny Perdue on Monday halted a scheduled 2.9 cents per gallon jump in the state gasoline tax, saying Georgia should not be taking advantage of a tax windfall driven by spiking prices at the pump. Diesel taxes would have gone up 4.2 cents per gallon.
“Frankly, I don’t think we can justify raising taxes on gasoline in a time of economic stress for many families,” Gov. Perdue said at a state Capitol news conference announcing his executive order.
But one North Georgia fuel dealer said the state’s gasoline and diesel tax problem remains.
“This action to halt an increase in gasoline and diesel tax doesn’t help much,” said Jewell Cochran, owner of Cochran’s Travel Center in Catoosa County. “It keeps the tax from going higher, but there is no reduction in state tax.”
He said Georgia needs a per-gallon excise tax system similar to Tennessee’s, where no sales tax is charged.
In Georgia, the excise tax is 7.5 cents per gallon, but the sales tax is charged on top of that, Mr. Cochran said, so the tax bill varies per gallon as the price changes and by county depending on how many of the three local option sales taxes are in place.
To simplify, every six months Georgia sets an average gasoline price to determine a sales tax level per gallon.
“So here in Georgia the road tax is 7.5 cents per gallon and the cost of the 4 percent state sales tax is 11 cents per gallon,” Mr. Cochran said. “But then you have to add local sales tax, too.”
For all the counties in Northwest Georgia, that is another 3 percent — 1 percent each for local option taxes for schools, special purposes and to hold down property taxes.
“If gas is $4 a gallon, that’s 12 cents per gallon added in local sales tax alone,” Mr. Cochran said.
The state was scheduled to post the higher tax rate Monday that would have taken effect on July 1, the start of the state’s fiscal year, but also when many families are hitting the road for summer vacation.
Bypassing the adjustment will keep Georgia’s tax impact at 18.5 cents a gallon, plus the local sales tax of 8.25 cents in Northwest Georgia, or 27 cents a gallon.
The Tennessee state tax is 19 cents a gallon.
Halting the increase will mean a loss of $70 million to $80 million in state revenue, Gov. Perdue said.
Last month, he suspended all state taxes for off-road diesel used by farmers, miners, construction workers and timber companies.
And in 2005 after Hurricane Katrina, he suspended the state sales tax on gasoline for a month as prices soared.
Currently gas in Georgia is averaging $3.95 a gallon, according to AAA Daily Fuel Gauge Report. That’s slightly below the national average of $3.98 per gallon.
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