{"id":19323,"date":"2023-09-14T12:19:07","date_gmt":"2023-09-14T12:19:07","guid":{"rendered":"https:\/\/isafespend.com\/personal-finance\/taxes\/georgia-suspends-gas-tax-after-declaring-state-of-emergency-over-higher-prices\/"},"modified":"2023-09-14T12:19:08","modified_gmt":"2023-09-14T12:19:08","slug":"georgia-suspends-gas-tax-after-declaring-state-of-emergency-over-higher-prices","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=19323","title":{"rendered":"Georgia Suspends Gas Tax After Declaring State Of Emergency Over Higher Prices"},"content":{"rendered":"<div>\n<p>Gasoline in Georgia just got a little cheaper. Governor Brian P. Kemp (R) declared a State of Emergency in the Peach State, citing inflation and unfavorable economic conditions. The declaration allows him to temporarily suspend the state\u2019s excise tax on motor and locomotive fuel.<\/p>\n<p>The executive order went into effect on Sept. 13, 2023, at midnight and will remain in effect until 11:59 p.m. on Oct. 12, 2023. You can read Executive Order 09.12.23.01 here.<\/p>\n<p>According to Kemp\u2019s office, the suspension will save Georgians 31.2 cents per gallon of gasoline and 35 cents per gallon of diesel fuel.<\/p>\n<p>This is Georgia\u2019s second run at a gas tax holiday in as many years. In 2022, the gas tax was suspended from March through December. According to Kemp, Georgians saved about $1.7 billion at the pump.<\/p>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Prior Year Gas Taxes<\/h2>\n<p>Last year, a few states suspended gas taxes in response to rising prices. In March 2022, Gov. Larry Hogan (R) of Maryland signed a bill authorizing a 30-day gas tax holiday (Comptroller Peter Franchot had proposed 90 days).<\/p>\n<p>Like Maryland, Florida also had a 30-day gas tax holiday in 2022. The Florida Motor Fuel Tax Relief Act of 2022 reduced the tax rate on motor fuel by 25.3 cents per gallon. The tax rate reduction began on Oct. 1, 2022, and extended through Oct. 31, 2022.<\/p>\n<p>Connecticut also passed a gas tax holiday in 2022. But rather than reinstate it all at once, the state gradually phased the tax back in the first half of 2023.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">How Gas Taxes Work<\/h2>\n<p>We tend to think of tax holidays\u2014like sales tax holidays\u2014as immediate consumer savings. That\u2019s not the case when it comes to gas taxes. The retail owner pays state gas tax when they buy the gasoline for resale\u2014that\u2019s when the gas goes into the pump. That tax is passed along to the consumer in the state as part of the price per gallon\u2014it\u2019s not a separate tax. In most cases, since the tax is paid at the original sale, a gas tax holiday means that a seller must apply for a refund. The expectation, but not the law, is that the savings are passed to the consumer.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Effects<\/h2>\n<p>A Wharton study suggests that, in the case of gas tax holidays, prices do not always fall by the full amount of the suspended tax. That\u2019s also a result of the nature of the holiday\u2014the tax is at the supplier, not the consumer, level. As noted, suppliers aren\u2019t necessarily required to pass the savings along.<\/p>\n<p>The study took a look at three states that suspended taxes in 2022. They found that in Maryland, there was a decline in gasoline prices that was \u201cstatistically significant\u201d initially\u2014but after the holiday expired, gas prices in Maryland were higher than what they would have been if the holiday had never occurred. The price decline in Georgia was more gradual. And in Connecticut, gas prices declined immediately after the gas tax went into effect (though the fall shrank slowly after that).<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Criticisms<\/h2>\n<p>While gas tax holidays can prove popular with taxpayers, there are some criticisms. One argument is that it disrupts the natural consequences of supply and demand\u2014typically when supply is low, prices increase. But, critics say that a gas tax holiday creates an artificial incentive to increase consumption while low supply boosts demand.<\/p>\n<p>Another criticism is that it reduces the funds available to state coffers for road improvements or general revenues. Typically, that can be problematic for cash-strapped states, but states were feeling flush in 2022 due to federal pandemic relief funds and an influx of sales tax (including bumps in online sales).<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">State Gas Taxes<\/h2>\n<p>Currently, the highest gas tax in the country belongs to California, which charges a whopping 77.9 cents per gallon (sales and excise taxes). That\u2019s the result of 2017 legislation, the Road Repair and Accountability Act, which raised transportation-related taxes, including the state excise tax on fuel, which increases every year to adjust for inflation.<\/p>\n<p>Illinois, Pennsylvania, Indiana, and Washington are next in line. Taxpayers pay the lowest gas tax rates in Alaska, Missouri, Mississippi, Hawaii, and Arizona.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Federal Taxes<\/h2>\n<p>President Biden called for a fuel tax holiday in 2022, but the idea didn\u2019t have Congressional support. In February of 2022, Sens. Mark Kelly (D-AZ) and Maggie Hassan (D-NH) introduced legislation that would have created a federal gas tax holiday through Jan. 1, 2023, but many in the Senate, including Minority Whip John Thune (R-SD) suggested that Republicans would not support it. It did not advance.<\/p>\n<p>The current federal gas tax is 18.4 cents per gallon (24.4 cents per gallon for diesel), a rate that hasn\u2019t changed since 1993.<\/p>\n<h2 class=\"subhead-embed color-accent bg-base font-accent font-size text-align\">Rising Prices<\/h2>\n<p>According to AAA, the average cost of a gallon of regular gas nationwide is $3.848. Numbers have been on the way up due to a boost in the price of oil, the primary ingredient in gasoline. Driving that? Saudi Arabia announced plans to continue its voluntary cut through the end of the year. A limited supply means that oil prices could continue to rise if demand stays high (or goes higher).<\/p>\n<p>It feels like everything is more expensive. Last month, inflation rose again\u2014ironically, largely on the back of increased gas prices. According to the Department of Labor, the index for gasoline was the most significant contributor to the rise in prices, accounting for over half of the boost of the increase.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/kellyphillipserb\/2023\/09\/14\/georgia-suspends-gas-tax-after-declaring-state-of-emergency-over-higher-prices\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gasoline in Georgia just got a little cheaper. Governor Brian P. Kemp (R) declared a State of Emergency in the Peach State, citing inflation and unfavorable economic conditions. The declaration allows him to temporarily suspend the state\u2019s excise tax on motor and locomotive fuel. The executive order went into effect on Sept. 13, 2023, at<\/p>\n","protected":false},"author":1,"featured_media":19324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[],"class_list":{"0":"post-19323","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.12 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Georgia Suspends Gas Tax After Declaring State Of Emergency Over Higher Prices | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Gasoline in Georgia just got a little cheaper. Governor Brian P. 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