Fuel tax suspension advances in South Carolina

| 5/16/2006

The South Carolina House has approved an effort sought by Gov. Mark Sanford that would cut prices at the pump for three months. Though several states are considering fuel tax breaks, this measure is the first to propose a three-month break.

The effort now heads to a House-Senate conference committee.

House lawmakers voted Wednesday, May 10, to add a provision to the House version of the state budget that would suspend the state’s 16.75-cent tax on diesel and gasoline from Oct. 1 through Dec. 31. The Republican governor proposed a moratorium from the tax from Memorial Day through Labor Day.

The Republican-led House changed the time period from summer to late fall, saying it would benefit state residents more than tourists who visit the state’s beaches, The Greenville News reported.

How the tax holiday would affect the status of the International Fuel Tax Agreement requirements for miles driven in South Carolina is unclear.

Some Senate Democrats have tabbed the effort as political pandering in an election year. Others in the chamber, including Republican leaders, raised concerns about losing out on nearly $100 million in taxes mostly used to pay for road work. They also questioned whether fueling stations would drop prices.

Sanford said the lost revenue could be covered by nearly $1 billion in new revenue for the state this year, the newspaper reported.

South Carolina isn’t the only state considering fuel cost relief. Other states pursuing similar actions include:

An Alabama House Democrat has requested that Republican Gov. Bob Riley open a special session so lawmakers can discuss a possible repeal of the state’s fuel tax. Nothing is in writing yet and no word on whether diesel would be included in any tax breaks.

Connecticut Gov. M. Jodi Rell said she would consider a legislative effort to suspend the state’s per-gallon tax for the summer. A special session would need to be called for lawmakers to address it. There is no indication yet if it would include taxes on diesel.

A Republican hopeful for the Nevada governor’s seat is calling for the state’s portion of the gas tax to be repealed. The proposal doesn’t include diesel.

A Minnesota House lawmaker has introduced a bill that would suspend the state’s 20-cent-per-gallon tax on gasoline-based fuels for six months. The same tax on diesel would remain intact.

A Republican gubernatorial hopeful in New Hampshire is calling for a suspension of the state’s per-gallon tax on diesel and gasoline for the summer.

Some Republican lawmakers in New Mexico have plans to push Democratic Gov. Bill Richardson to round up the Legislature for a special session to discuss suspending the state’s tax on fuel. No specific plan has been proposed and it is not known if any tax breaks would include diesel fuel.

North Carolina Gov. Mike Easley, a Democrat, has asked state lawmakers to cap the state’s per gallon tax on diesel and gasoline so that the rate will not increase from the current level. The state’s fuel tax can change every six months because a portion is set on recent average wholesale prices. The next change could take place in July. House Democrats also have plans to keep the fuel tax from increasing this year.

Democrats in the Texas House are calling for a 90-day suspension of the state’s 20-cent-per-gallon tax on motor fuels.

– By Keith Goble, state legislative editor