Georgia governor freezes fuel tax rates until at least January ’09

| 6/4/2008

Gov. Sonny Perdue this week signed an executive order to suspend a scheduled increase in Georgia’s tax collected on fuel purchases that was due to take effect July 1. The action will result in a loss of as much as $80 million in state revenue for roads during the next year.

Georgia law requires the state’s Department of Revenue to recalculate the state excise tax and sales tax on motor fuels every six months to adjust for changes in prices. The excise tax is 7.5 cents per gallon with the sales tax charged on top of that.

With fuel prices hovering around $4 per gallon across the state, fuel tax rates were set to increase next month. The diesel tax was slated to move up 4.2 cents per gallon to 16.5 cents – up from the 12.3-cent-per-gallon tax now applied.

The gas tax was expected to be bumped up by 2.9 cents per gallon to 13.9 cents – up from 11 cents per gallon.

Perdue said suspending the tax hike not only will benefit drivers, “suspending these tax increases will benefit some of our most important industries,” he said in a written statement.

This marks the second time in three years the state’s taxes on fuel have been frozen. Perdue first suspended collection of the state’s fuel taxes for one month in the fall of 2005 following Hurricane Katrina when pump prices topped $3 per gallon.

The governor’s latest order will remain in place until the next regular session convenes in January 2009.

To view other legislative activities of interest for Georgia in 2008, click here.

– By Keith Goble, state legislative editor