Gas prices drop, but some states still offer gas tax holidays
Thursday, September 15, 2022
Inflation is still a concern, for consumers and politicians, but it is easing a bit (at least for some consumers). One reason for the change is falling gas prices.
GasBuddy reported on Sept. 12 that for the thirteenth consecutive week, the nation’s average per-gallon gas price dropped. It went to $3.67 per gallon, down 7.6 cents from a week ago.
AAA's daily tracker shows a Sept. 15 national per gallon average of $3.698.
But those are averages. Your pump prices may vary.
Patrick De Haan, head of petroleum analysis at GasBuddy, noted in the latest analysis that there are "drastically different price behaviors" nationwide, with some areas seeing noticeable increases while others are seeing decreases.
"For now, I believe the drop in prices will overpower the increases, leading to potentially another decline this week," said De Haan, "but we’re in a very fragile time and certainly could see a broader move higher in the weeks ahead."
A few state gas tax holidays in effect: Those regional fluctuations, and associated political considerations, are why a handful of states still have gas tax holidays. Here's a look at those locales where gas tax collection is, or will be, on hold.
Connecticut lawmakers in March temporarily suspended the state's 25-cents-per-gallon excise tax on gasoline. As the end of that gas tax holiday neared, Nutmeg State legislators and the governor agreed to not collect the gas tax through Nov. 30.
Florida's Motor Fuel Tax Relief Act of 2022 will take effect on Oct. 1. It will cut the tax rate on motor fuel by 25.3 cents per gallon through Oct. 31. The tax rate reduction applies to all gasoline products, any product blended with gasoline and any fuel placed in the storage supply tank of a gasoline-powered motor vehicle.
Georgia established its first gas tax holiday of 2022 in March. Since then, Republican Gov. Brian Kemp has issued follow-up executive orders that continues the Peach State's no-gas-tax status. The latest order on Sept. 1, the fourth issued by Kemp, extends the gas-tax suspension through Oct. 12.
New York's state budget, enacted in April, suspends collection of the Empire State's 8-cents-per-gallon excise tax through Dec. 31. It also mandates that the state sales tax on gas is collected only on the first $2 per gallon of sales. Note, however, that local sales and use taxes are not suspended.
No holidays, but gas tax relief: Four states, while not offering official gas tax holidays, also took action this year to limit the effects of state gas taxes.
Three suspended scheduled gas tax increases that otherwise would have taken effect on July 1. They are —
- Colorado's 2-cents-per-gallon tax increase won't show up on pumps in the Centennial State until April 1, 2023.
- Illinois officials delayed a 2.4-cents-per-gallon increase until Jan. 1, 2023.
- Kentucky lawmakers will take another look a planned 2-cents-per-gallon gas tax hike when they reconvene in January 2023.
In addition, an Indiana tax relief law enacted last month caps the state's sales/use tax on gasoline at 29.5 cents per gallon through June 2023.
Normally, the Hoosier State's tax amount is tied to the wholesale price of gasoline, and adjusted each month. If the sales tax rate falls below 29.5 cents during the freeze period, the lesser tax rate would apply.
You also might find these items of interest:
- Europe tacks on larger fuel taxes than the United States
- Senate Finance chair exploring excess profits tax on oil companies
- EV buyers prefer rebates to tax credit; switch could save Uncle Sam money, too
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