Georgia House approves fuel tax increase

By Keith Goble, Land Line state legislative editor | 3/17/2015

A $1 billion funding bill halfway through the Georgia statehouse would make sure the state does not get left behind in the push among states around the country to address concerns about transportation revenue.

House lawmakers voted 123-46 to send a bill to the Senate that includes a fuel tax increase and changes to IFTA fee collection.

Rep. Jay Roberts, R-Ocilla, says the funding plan will help the state cover a transportation funding shortfall in excess of $1 billion per year.

“We’ve got to put more money to transportation in this state if we want to move forward,” he said. “The need is real.”

Georgia’s fuel tax is a two-part tax. A percentage portion of the tax is calculated twice annually and is based on the average price per gallon of fuel in the state at the time. The excise portion of the tax adds 7.5 cents per gallon – a rate that has remained unchanged since 1971.

Roberts’ bill, HB170, would end the collection of the 4 percent sales tax at the pump. In exchange, the excise tax rate would rise to 29.2 cents. The rate would also be adjusted to inflation.

He said the indexing component of the plan would provide a reliable, predictable source of transportation funding.

A protection included in the bill would ensure that fuel tax revenue is applied solely for transportation purposes.

“We are making a fundamental shift in this state. We’re saying as we go forward any and all money collected off motor fuel will be spent on transportation,” Roberts said during House floor discussion.

He has also touted converting the sales tax on fuel to an excise tax because of the advantages the switch would have for the state’s participation in the International Fuel Tax Agreement. It is estimated the change would bring another $60 million to the state.

Another provision in the bill calls for overhauling the collection of local taxes on fuel purchases. In exchange, counties and cities could increase the local sales tax rate on other purchases from 1 percent to 1.25 percent.

The annual fee on alternative fuel commercial vehicles could also be set at $300 while the fee on alternative fuel personal vehicles could be set at $200, and indexed to inflation.

HB170 awaits further consideration in the Senate Transportation Committee.

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

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