STATE GAS TAX ADJUSTMENT

STATE GAS TAX ADJUSTMENT

Californians might not be paying as much in excise taxes at the gas pump starting this summer, but don’t expect to spend less overall. The California State Board of Equalization voted Tuesday to reduce the excise tax rate by 3 ½ cents, or 10 percent, effective July 1. California motorists currently pay nearly 71 cents in federal and state taxes per gallon of gasoline, of which 39.5 cents are state excise taxes. The national average for all taxes on a gallon of gas is about 50 cents, according to the American Petroleum Institute. But a possible reduction in excise tax won’t necessarily mean drivers will be paying less at the pump. Due to a complicated “fuel tax swap” formula that raises the sales tax as the excise tax is lowered, and vice versa, consumers will pay about the same amount in taxes to the state. BOE member George Runner said in a statement, “Our vote … is good news for California taxpayers. This much-needed tax relief will arrive as Californians are on the road for summer vacations.”

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