States tackle high gas prices with tax holidays, rebates for
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Experts say a break from those taxes won’t necessarily result in big savings.
“It does take money out of state coffers that could be used for something else,” such as paying for state unemployment benefits, said Scott Roberti, who leads Ernst & Young’s state policy services practice.
Several states have already put gas tax holidays in place.
Connecticut
Connecticut Gov. Ned Lamont, a Democrat, signed emergency legislation on March 24 to suspend the state’s gas tax from April 1 through June 30. The state’s tax on gasoline is 25 cents per gallon.
In addition, the legislation also suspends fares on public buses statewide during that same period.
Georgia
Georgia Republican Gov. Brian Kemp signed legislation on March 18 that will temporarily remove the state’s tax on gas through May 31.
The state typically applies levies of 29.1 cents per gallon on gas.
Maryland
Maryland Republican Gov. Larry Hogan signed legislation on March 18 that suspends the state’s gas tax of 36.1 cents per gallon for 30 days.
“I think it makes a huge difference to the average consumer and I can tell you that the average price across the country is something like $4.25 — we’re down around $3.75 so we’re 50 cents a gallon cheaper than most,” Hogan said during an interview with CNBC’s “Squawk Box.”
Other states could follow
Other states may follow the precedent set by Connecticut, Georgia and Maryland with their own gas tax holidays, and in some cases, direct rebate payments to residents.
Here’s a roundup of activity that has taken place in recent weeks.
Alabama
A proposal has been raised by certain state representatives to suspend the state’s gas tax from May 1 through Sept. 1, or until the average monthly prices per gallon are at or below what the monthly price was in January.
Alaska
California
A driver fuels a vehicle a gas station in Richmond, California, on March 24, 2022.
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Democratic Gov. Gavin Newsom has unveiled a proposal to send drivers $400 debit card rebates. The payments would be determined by vehicle registration, not tax records. Individuals could receive up to two payments, which would start in July if approved by the state legislature.
Separately, a bill introduced in January would suspend the tax on motor vehicle fuels for six months.
Colorado
Colorado Democratic Gov. Jared Polis has sought to delay a new 2 cents per gallon fee on gas. In addition, he sent a letter with five other governors urging Washington lawmakers to suspend the federal gas tax of 18.4 cents per gallon.
Delaware
Lawmakers are seeking to send $300 checks to all state residents who filed 2020 tax returns. However, the legislation still needs to be formally proposed and passed.
Florida
Lawmakers have agreed to suspend the state’s gas tax for one month in October. Florida’s gas tax is about 27 cents per gallon.
Illinois
Maine
Efforts to temporarily suspend the state’s gas tax of 30 cents per gallon through the rest of the year have stalled….
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