As President Biden calls on Congress to suspend the state gas tax, here’s what we know about the state gas tax suspension.
President Joe Biden is asking Congress to suspend federal gas and diesel taxes for three months, a move that has drawn doubt and criticism from some lawmakers and industry experts.
House Speaker Nancy Pelosi and other Congressional Democrats have feared that suspending the federal gas tax would allow oil companies to rake in additional profits with no guarantee drivers will see savings at the pump, the Associated Press reports.
“President Biden understands that a gas tax holiday alone will not mitigate the rise in costs that we have seen. But the President believes that at this unique moment, when the war in Ukraine is imposing costs on American families, Congress should do everything possible to give working families breathing space,” the White House said in a statement.
Biden is also urging states to take direct remedial action by suspending their own gas taxes or taking other legislative action.
Before the news, some social media users claims that five US states have already suspended their gas taxes.
Have Five US States Exceeded Their Own Gas Tax Holidays in 2022?
Yes, five US states have passed legislation to suspend gas taxes sometime in 2022.
WHAT WE FOUND
According to the US Energy Information Administration (EIA), the US federal fuel tax is 18.3 cents per gallon and the total state gasoline taxes average about 31 cents. That means the average American pays about 49 cents in total gas taxes, although some people pay more when their state taxes are higher.
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State gas taxes include per-gallon excise taxes collected at the pump, excise taxes imposed on wholesalers and passed on to drivers in the form of higher prices, and sales taxes applied to the purchase of gasoline, the tax foundation explains on its website.
The federal gas tax exemption, if passed by Congress, “could theoretically save Americans about $70 million a day cumulatively, although it could take a few weeks for the effects to be seen,” GasBuddy spokeswoman Nicole Petersen told VERIFY.
“The tax exemption also has the potential to increase demand for gasoline, which could have the opposite effect and put more pressure on prices at the pump,” she added.
As Biden urges lawmakers to pass legislation that would temporarily eliminate the state gas tax, five U.S. states — New York, Florida, Georgia, Connecticut and Maryland — have suspended or will suspend their state taxes in hopes of future relief do for drivers.
Here’s what we know about each state’s tax breaks.
From June 1 to December 31, 2022, New York is suspending certain state taxes, including fuel tax and sales tax, on gasoline and diesel fuel, according to Gov. Kathy Hochul. This equates to a reduction in the state’s gas price per gallon of at least 16 cents, with some counties making additional savings by imposing temporary sales tax caps.
“By suspending certain fuel taxes for the next seven months, New York is making approximately $609 million in direct relief available to New Yorkers — an important lifeline for those who need it most,” Hochul said in a statement.
New York drivers would have paid at least 17.3 cents a gallon in state gasoline taxes as of June 1, 2022 had the taxes not been suspended, data from the state Department of Taxation and Finance shows.
According to AAA, the average price of gas per gallon in New York as of June 22 is about $4.99, slightly above the national average of about $4.96.
A month-long gas tax holiday is scheduled to begin in Florida on October 1, 2022, suspending fuel taxes in the state.
Florida Gov. Ron DeSantis signed House Bill 7071 into law on May 6, 2022, establishing the gas tax holiday along with nine other tax holidays. A summary of the bill shows drivers in the state will save an estimated $200 million in a month’s fuel tax vacation beginning October 1.
According to the DeSantis office, the fuel tax holiday will reduce the state’s gasoline price by 25.3 cents per gallon.
The legislation also suspends taxes on items such as school supplies, items and admissions related to recreational activities, and Energy Star devices.
AAA data shows that the average price of gas per gallon in Florida as of June 22 is currently about $4.77, almost 20 cents below the national average.
Georgia has already suspended collecting its fuel tax from March 18, 2022 through May 31, 2022, according to the State Department of Revenue (DOR). Gov. Brian Kemp later issued an executive order on May 26 extending the suspension of excise duty collection until July 14.
The state gas tax in Georgia is regularly 29.1 cents per gallon, DOR data shows.
As of June 22, the average gas price per gallon in Georgia was about $4.45, about 50 cents below the national average, according to the AAA.
On March 24, Gov. Ned Lamot signed emergency legislation suspending Connecticut’s 25 cents per gallon excise tax on gasoline from April 1 through June 30, 2022.
“The legislation includes language alleging that failure by retailers to reduce the price of gasoline per gallon by that amount during the suspension period is considered an ‘unfair or deceptive trading practice,'” the governor’s office said in a statement.
More than a month later, on May 9, Lamot announced that new legislation had further suspended Connecticut’s excise tax on gas until November 30, 2022.
According to the AAA, the average price of gas per gallon in Connecticut on June 22 is close to the national average at about $4.92.
Maryland instituted a 30-day gas tax holiday from March 18 to April 16, 2022, but that has now expired, according to the state audit office. The Maryland state gas tax is currently 36.1 cents a gallon and is expected to rise 18% to 42.7 cents a gallon on July 1.
State Comptroller Peter Franchot sent a letter to Gov. Larry Hogan and other lawmakers in late May, urging them to pass emergency legislation that would waive the 18% hike in the state’s gas tax.
“This equates to a new, highly regressive $200 million tax on Maryland families and small businesses,” Franchot said of the increase in his letter.
Franchot also urged lawmakers to pass another state gas tax holiday by Sept. 30, similar to the month-long furlough that was passed in March.
Maryland’s average gas price per gallon is currently hovering near the national average at about $4.93 as of June 22, AAA data shows.
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