Home New mexico tax Fuel tax relief in place; other States continue their action

Fuel tax relief in place; other States continue their action


The state of Connecticut has joined the restricted list of states to take steps to provide fuel tax exemptions to at least some drivers.

On Thursday, March 22, Governor Ned Lamont signed into law a bill giving motorists a three-month vacation in exchange for paying the 25-cent excise tax on gasoline. The law does not affect the 41.1 cent excise tax on diesel.

The gasoline tax exemption begins April 1 and continues until the end of the fiscal year, June 30.

The gas tax suspension for three months will cost the state $90 million.

The language included in the bill is intended to ensure that cost savings are passed on to customers. If retailers did not reduce the price of gasoline by 25 cents per gallon during the suspension period, it would be considered an “unfair or deceptive trade practice.”

Some lawmakers, including Rep. Tom Delnicki, R-South Windsor, have called for the tax suspension to include diesel. The diesel tax provision did not receive sufficient support.

The Democratic governor praised both sides for quickly reaching an agreement.

“With this bipartisan action, we are taking steps to provide relief to consumers in the face of rising prices due to a number of international dynamics and market instability that go far beyond our state, Lamont said. in a press release.

Other states took action last week

Connecticut’s approval of a gasoline tax holiday follows similar moves in recent days in Georgia and Maryland.

On March 18, Maryland Governor Larry Hogan became the first governor to take action on a fuel tax holiday.

State law allows fuel prices to be adjusted each July based on the Consumer Price Index. Effective July 1, 2021, the gasoline tax is set at 36.1 cents and the diesel rate at 36.85 cents.

The Republican governor has signed legislation to suspend collection of state fuel rates for 30 days. The tax exemption took effect immediately and will continue until April 16.

Suspending fuel tax collection would cost the state $100 million.

Proponents say the revenue loss would be covered by tapping into the state’s $7.5 billion budget surplus.

Hogan has since said it may be necessary to extend the tax holiday beyond the initial 30-day period.


Georgia Governor Brian Kemp has also signed into law a tax exemption for his state.

Georgia collects a gasoline tax of 29.1 cents and a diesel tax of 32.6 cents.

The enacted legislation immediately suspends the collection of state fuel taxes through May 31.

The Republican governor said the state is well positioned to provide tax relief due to a $3.7 billion budget surplus through fiscal year 2021.

Other states pursue tax breaks

In California, Assembly Democrats want to help residents fight high gas prices.

A group of 21 Assembly members want to dip into the state’s budget surplus to send refund checks to all California taxpayers. The proposed amount for each taxpayer is $400.

“We believe a refund is a better approach than suspending the gas tax – which would have a big impact on funding major transport projects and offers no guarantee that oil companies will pass on the savings. on consumers,” their letter to legislative leaders reads.

Rebate checks would be sent to all California taxpayers, whether they own or drive a vehicle.

The proposal is estimated to cost the state $9 billion. The state budget surplus would be tapped to cover this amount.

Meanwhile, Republicans in the State House continue to push for a gas tax exemption.

Democratic Gov. Gavin Newsom said he supported some relief from high fuel prices.

Newsom supports a discount plan. He also wants to suspend part of the diesel sales tax rate and suspend the inflationary adjustment on excise duty on gasoline and diesel scheduled for July 1.

Newsom wants to send debit cards to drivers of gas-powered vehicles and electric vehicles.

His proposal has a price tag of over $10 billion.

In addition to the $9 billion in tax refunds, up to $600 million would be needed to suspend part of the diesel sales tax rate for one year. Another $523 million would be used to suspend the inflationary adjustment of gasoline and diesel excise tax rates.

His office is expected to meet with the Legislative Assembly in the coming days to negotiate the details.


In Massachusetts, the State Senate on Thursday, March 24, rejected a proposal to suspend the fuel tax.

A Republican-led initiative has called for the collection of fuel taxes to be suspended until Labor Day.

Majority Democrats said they opposed the plan and expressed concern that the terms of the state bond agreements were violated.

Governor Charlie Baker has not approved a break in fuel taxes. The Republican governor expressed concern about how tax breaks in neighboring states could “disadvantage” Massachusetts drivers.


Two Pennsylvania Republicans have introduced bills to provide fuel tax relief to consumers.

Sen. Jake Corman of Bellefonte and Rep. Tony DeLuca of Allegheny are sponsoring bills to suspend fuel tax collection.

DeLuca’s bill would suspend the 58-cent gasoline tax and the 74-cent diesel tax for six months. The state would be responsible for identifying how to mitigate the loss of revenue.

“The pain at the pump from rising gas prices is hitting the wallets of Pennsylvanians and our way of life — from more expensive trips to paying more to distribute goods,” DeLuca said.

DeLuca said if neighboring states, including Maryland, can take steps to relieve drivers of rising fuel prices, Pennsylvania should do the same.

“If Maryland can help consumers lower their gas prices by 46 cents a gallon, imagine the relief we can bring to Pennsylvanians by suspending our gasoline tax of 58 cents and the diesel tax of 74 cents a gallon. cents.”

Corman’s plan is to cut fuel taxes by a third by the end of the year.

The state would tap into a combination of federal funds and a bond issue to cover lost revenue.

The invoices are SB10 and HB2453.

IFTA effect

Statehouse lawsuits over fuel tax exemptions that would include diesel have caught the attention of the trucking industry.

Professional drivers want to know what tax relief would mean for paying their fuel tax under the International Fuel Tax Agreement.

IFTA Executive Director Carmen Martorana recently told Land Line Media that drivers would not have to pay state fuel tax if they buy and burn fuel in a state that does not collect fuel. not the tax.

Martorana pointed out that drivers who buy fuel in a state with a fuel tax exemption and drive in a state without an exemption, drivers should pay that tax out of pocket.

She added that if a driver pays fuel taxes in one state, but then drives in a state that has a tax holiday, they can be reimbursed.

Governors call for federal action

Six Democratic governors have called on Congress to act to suspend federal gas tax collection through the end of this year.

The governors of Colorado, Michigan, Minnesota, New Mexico, Pennsylvania and Wisconsin said money from the general fund could be used to cover lost gasoline tax revenue.

“At a time when people are being directly affected by the rising prices of everyday consumer goods, a federal gasoline tax exemption is a tool in the toolbox to reduce costs for Americans, and we urge full attention to this bill,” the governors wrote. to the leaders of Congress. LL

Land Line Media reporter Ashley Blackford contributed to this report.

More fuel tax coverage

Keith Goble, state legislative editor for Land Line Media, follows efforts in state homes across the country to alleviate higher fuel costs. Here are some recent articles by him.