Gas tax will lead to 5 cent price hike

The Covington News - - Front page - By Gabriel Khouli gkhouli@cov­

The much dis­cussed gas tax hike in Ge­or­gia will raise prices at New­ton County’s pumps by 5 cents when it takes ef­fect Sun­day.

Most goods in Ge­or­gia are sub­ject to sales tax, in­clud­ing gaso­line, but the con­fu­sion comes in the fact that gas is not taxed at the sim­ple 7 per­cent rate as is ev­ery­thing else in New­ton and other coun­ties.

First, the state charges an “ex­cise sales” tax, which is per­ma­nently set at 7.5 cents per gal­lon. Then it charges its reg­u­lar sales tax, which works out to be close to 7 per­cent but changes at least twice a year based on a gas price in­dex, said Beth Brown, com­mu­ni­ca­tions di­rec­tor for As­so­ci­a­tion County Com­mis­sion­ers of Ge­or­gia.

The prob­lem for con­sumers is that when the gas price rises sig­nif­i­cantly — more than 25 per­cent — the gas sales tax also rises au­to­mat­i­cally un­der state law.

The cur­rent state gas tax is 10.1 cents per gal­lon and the lo­cal rate is 7.6 cen­ters per gal­lon. Be­gin­ning May 1, the state rate is go­ing to in­crease by 2.8 cents and the lo­cal rate is go­ing to jump by 2.1 cents. Diesel is ex­pe­ri­enc­ing sim­i­lar hikes.

The price of gas in Ge­or­gia is av­er­ag­ing $3.76 a

gal­lon, ac­cord­ing to the AAA Daily Fuel Gauge Re­port, a sig­nif­i­cant in­crease from the $2.77 per-gal­lon price av­er­age a year ago.

The in­crease is pro­por­tion­ally greater for the state, which nor­mally col­lects 4 per­cent of all sales tax, while New­ton and other coun­ties can only col­lect a max­i­mum of 3 per­cent for lo­cal sales tax and gov­ern­ment and ed­u­ca­tion SPLOSTs. The two SPLOSTs must be used for ded­i­cated lo­cal projects ap- proved by vot­ers, so the gas tax rev­enue is not nec­es­sar­ily ded­i­cated to trans­porta­tion, or any other spe­cific, projects.

The rea­son that the gas tax in­creases when the price of gas in­creases, is be­cause when a nor­mal good in­creases in price, the per­cent­age sales tax ac­counts for that. An item that costs $10 more would bring 70 ad­di­tional cents to the gov­ern­ment.

How­ever, a set per-gal­lon rate would not col­lect any ad­di­tional money for the state. If 100 gal­lons were sold, the state and lo­cal sales tax would be $17 re­gard­less if the prices per gal­lon were $3.50 or $4. That’s why the rate is set to change bian­nu­ally or when a large price in­crease oc­curs.

The fed­eral gas taxes stand at 18.4 cents a gal­lon, and the ma­jor­ity of this money is used for trans­porta­tion projects.

Ac­cord­ing to the Associated Press, the gas tax is­sue has long frus­trated Ge­or­gia mo­torists, and lawmakers this year con­sid­ered mak­ing changes to the gas tax rules but ad­journed with­out tak­ing ac­tion. Gov. Nathan Deal has also said he is un­likely to put a freeze on the tax hike be­cause it’s not re­lated to a state of emer­gency.

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