Tax Relief

Gas tax relief efforts transfer ahead in 4 states Land Line

Pursuit continues at multiple statehouses to provide price breaks on fuel tax collections. A handful of states are on the verge of approving tax breaks.

Connecticut

In Connecticut, Gov. Ned Lamont and legislative leaders are working on suspending collection of the state’s 25-cent gas tax through June. The state’s diesel tax would be unaffected.

The Democratic governor said there is “strong consensus” between the state’s Republican and Democratic parties to provide consumers with relief from soaring gas prices.

Legislative leaders say legislation addressing the issue could be ready by next week. They add it is possible legislation could be approved before the end of March.

The tax holiday is estimated to result in $90 million in lost gas tax revenue.

Georgia

Georgia lawmakers acted this week to send to Gov. Brian Kemp a bill to temporarily suspend collection of the state’s fuel taxes.

The state now collects a 29.1-cent gas tax and a 32.6-cent diesel tax.

Both chambers of the legislature voted by unanimous consent to suspend tax collection through May 31.

gov. Brian Kemp could sign HB304 into law as early as Friday, March 18.

Pausing collection of the state’s fuel taxes is estimated to cost the state about $160 million per month.

The Republican governor has said the state is in a good position to provide a tax break because of a $3.7 billion budget surplus through fiscal year 2021.

I’m looking forward to signing this into law and to putting money back into the pockets of hardworking Georgians!

We appreciate all in the Senate who voted with us on this important measure.https://t.co/BRVuEPi1Tn

— Governor Brian P. Kemp (@GovKemp) March 16, 2022

IFTA effect

Pursuit in Maryland and elsewhere for fuel tax holidays that would include diesel have drawn the attention of the trucking industry.

Professional drivers want to know what a tax break would mean for paying their fuel tax through the International Fuel Tax Agreement.

IFTA Executive Director Carmen Martorana told Land Line Media that drivers wouldn’t have to pay state fuel tax if they are buying and burning the fuel in a state that is not collecting the tax.

Martorana pointed out that drivers who buy fuel in a state with a fuel tax exemption and drive in a state without an exemption, drivers would have to pay that tax out of pocket.

She added that if a driver pays taxes on fuel in one state, but then drives in a state that has a tax holiday, they can get reimbursed.

Maryland

The Maryland General Assembly took final actions Friday to get a bill to Gov. Larry Hogan to enact a 30-day fuel tax holiday.

State law authorizes fuel rates to be adjusted each July based on the consumer price index. Since July 1, 2021, the gas tax has been set at 36.1 cents and the diesel rate at 36.85 cents.

HB1486/SB1010 would suspend collection of the state’s fuel rates for 30 days.

Both pieces of legislation swept through the statehouse with unanimous consent.

Suspending collection of fuel taxes is estimated to cost the state $100 million.

Advocates say the lost revenue would be covered by dipping into the state’s $7.5 billion budget surplus.

The Republican governor was expected to sign the legislation into law before the weekend.

Virginia

Across the state line in Virginia, Gov. Glenn Youngkin this week proposed a three-month suspension from collecting state fuel taxes.

Virginia collects a 26.2-cent-per-gallon tax on gas and a 27-cent rate for diesel.

The governor is calling for the tax holiday to run from May through July, and to phase it back in slowly in August and September.

Youngkin, a Republican, said the state could absorb the lost revenue by tapping into excess transportation funds. The amount needed is estimated to be about $437 million.

“The Commonwealth Transportation Fund has over $1 billion more revenue than anticipated this year and next, from the taxes paid by the people of Virginia,” Youngkin said in a news release. “This bill gives money back to them in the form of a gas tax holiday.”

His plan would also cap the annual adjustment to the fuel taxes at no more than 2% per year “to further protect Virginians from the hidden tax increase of inflation.”

Rising gas prices are hurting Virginians and we need to do something about it. My proposal would use $437 million of the more than $1 billion transportation fund surplus to provide needed relief to struggling Virginians by lowering the price at the pump by 26 cents a gallon! pic.twitter.com/1xqkIrqoWw

— Governor Glenn Youngkin (@GovernorVA) March 17, 2022

The bill will be considered during an upcoming special session of the General Assembly.

The outcome at the statehouse is uncertain.

The Virginia Senate previously blocked a similar pursuit from the governor to suspend a nickel increase in fuel taxes for one year.

Following Youngkin’s announcement to pursue a three-month tax holiday, Senate Majority Leader Dick Saslaw indicated the legislature would need to make sure a tax break could be done while maintaining a “robust and responsible budget.” The Fairfax Democrat added that fuel costs have dropped in recent days.

House Democratic Leader Eileen Filler-Corn has said the governor should focus on issuing an executive order to activate the state’s anti-price gouging rule.

“Gov. Youngkin has the power to act and help Virginians at the pump but so far has failed to do so. Instead, he continues to point fingers and waste precious time.”

A rundown from Land Line Media of actions pursued in other statehouses to provide fuel tax holidays is available.

Governor’s call for federal action

Six Democratic governors are calling on Congress to act to suspend the collection of the federal gas tax through the end of this year.

The governors of Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin say general fund money could be used to cover lost gas tax revenue.

“At a time when people are directly impacted by rising prices on everyday goods, a federal gas tax holiday is a tool in the toolbox to reduce costs for Americans, and we urge you to give every consideration to this proposed legislation,” the governors wrote to congressional leaders. LL

Land Line Media reporter Ashley Blackford contributed to this report.

More state trends

Keith Goble, state legislative editor for Land Line Media, keeps track of many trends among statehouses across the US Here are some recent articles by him.

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