The state’s Board of Equalization announced a July 1 drop in the excise tax on gas, but that does not guarantee gasoline prices will be lowered.
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Now that summer is underway and California drivers are on the road en masse, the state’s Board of Equalization announced a July 1, drop in the excise tax on gas. Although Californians will be paying less in state excise tax at the pump, that does not guarantee gasoline prices will be lowered.
“This is good news for Californians traveling this summer,” said George Runner, a Board of Equalization Member. “But, unfortunately, California will still have the second highest gas tax in the nation.”
After the Board unanimously voted at its February 2014 meeting to lower the rate for the 2014-15 fiscal year, which ends June 30, 2015, they decided upon a new rate of $0.36 – down from $0.395.
In 2010, laws known as the “fuel tax swap” were enacted, influencing the adjustment of the excise tax on gasoline.
The swap results in revenue neutrality, which means that motorists will pay no more or less state tax on gasoline purchases than they would have before the swap.
The sales tax on gasoline to 2.25 percent and raised the excise tax by an amount projected to equal the sales tax that otherwise would have been collected under the old tax structure.
March 1 of each year for the coming fiscal year is when the excise tax rate is set, based on estimates of projected price and gallons to be purchased provided by the Department of Finance and IHS Global Insight, which is an internationally-recognized firm that provides economic and financial data.
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Source: Santa Clarita News