Connecticut lawmakers approve cash discounts for fuel, delay tax hike

| 6/12/2008

The Connecticut General Assembly endorsed legislation Thursday, June 12, to offer consumers a break from high fuel prices.

Wrapping up a one-day special session, the state’s House voted during the wee hours of Thursday morning to stop a scheduled fuel tax hike. The vote cleared the way for the bill – SB1000 – to advance to Gov. M. Jodi Rell for her signature.

Also included in the bill is a provision that would allow more fuel stations to offer cash discounts. The cash discount would override franchise agreements between oil companies and fuel stations, thus allowing retailers to offer discounts to customers who pay cash to fill up.

About 85 percent of the state’s approximately 1,000 fuel stations are affected by such agreements, The Hartford Courant reported.

Advocates for the change say the discounts could save consumers between 10 cents and 20 cents per gallon in a state where a gallon of diesel is averaging $4.90.

Connecticut Attorney General Richard Blumenthal gave the all-clear earlier in the week for lawmakers to adopt the change. At the request of the governor, he released a legal opinion on the topic, and there’s no federal law that would prevent the state from approving the cash discounts.

Discontent from consumers led lawmakers to scrap the scheduled July 1 increase in the state’s tax on wholesale earnings from fuel sales. The tax was slated to increase from 7 percent to 7.5 percent.

The tax increase was expected to raise $25 million in revenue for transportation projects in the state while adding 7.7 cents per gallon to the price of diesel at the pump. Gas would have increased by 3 to 4 cents.

The state’s per-gallon taxes would not have been affected.

The next scheduled increase in the gross earnings tax is July 1, 2013. The tax rate is set to be raised to 8.1 percent.

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

– By Keith Goble, state legislative editor