Consumers may wait for gas tax relief

We want to applaud Hearst Connecticut Media’s editorial board for its recent editorial regarding the proposed gas tax holiday and shining the light on some issues related to the idea.

We have another issue we’d like to bring to the table. It’s an important one. When and if the gas tax holiday goes into effect, consumers may not see relief right away. Here’s why.

We have been working diligently with the state to ensure that a gas tax holiday has an immediate benefit to consumers, but it’s unclear if that will happen. Since gas stations pay state consumer gasoline taxes up front for the fuel that is already in their tanks, the only way for the tax holiday to actually result in reduced prices immediately is if the state refunds those consumer taxes that gasoline retailers have already paid in full.

Just to put this in perspective, an average gas station typically has two tanks: 10,000 gallons each, or 20,000 gallons total. One tank is for unleaded gasoline and one tank for premium gasoline. If the state excise tax of 25 cents per gallon is suspended and those tanks are full, the gas station owners would lose $5,000 in tax money — if not more — already paid in full to the state of Connecticut. We are simply asking for that tax money to be refunded so that it can be passed along immediately to the consumer.

If not, customers will have to wait days until that pre-paid taxable fuel is sold off. This means, it would be two to three days or more before customers see any relief at the pump. We have the same goal in mind to provide relief at the pump, but if it is not executed properly, consumers will have to wait longer before they receive the benefit of the tax suspension.

We have told the administration and Connecticut lawmakers that this is the case. They are well aware of the issue at hand. We don’t want customers to be upset if they do not see immediate relief in the prices they pay to fill up. We think asking for a refund for taxes that were already paid is a fair and effective solution. The state has no problem asking us for more money when taxes go up on other products that we sell. It is only right to give us back the money we paid in state taxes when taxes are reduced.

To be clear, we want to be able to offer immediate relief to consumers struggling to fill up their tanks. However, our gasoline retailers only make pennies per gallon when the prices spike the way they have recently. We could not and should not be asked by the State of Connecticut to eat millions of dollars in state taxes.

We really hope that we can fix this issue at hand before the tax holiday goes into effect. We want to help the legislature do the right thing by our customers and hope to reach some type of agreement with the state before consumers become confused about promised tax relief that may take days to actually occur. We want the people of Connecticut to understand that no business should be on the hook for state taxes that are collected, and that we will pass on those saving to them as soon as our taxable fuel, already in the tanks, is sold.