Georgia governor suspends diesel tax

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Gov. Sonny Perdue has announced that Georgia consumers would be exempt from the state motor fuel tax through September. The move temporarily halts state collection of all motor fuel taxes.

“My purpose in temporarily suspending fuel tax collection is to relieve some of the financial burden placed on Georgians by disruptions of our fuel supply resulting from the effects of Hurricane Katrina,” Perdue said. “This moratorium will have no negative effect on the state budget.”

As gas and fuel prices increase, the amount of sales tax collected also increases.

Typically, a prepaid 7.5-cent excise tax is collected by the Georgia Department of Revenue on each gallon of fuel, both diesel and gasoline, sold at the distributor level. Consumers pay an additional 4-cent sales tax on each dollar’s worth of diesel and gasoline sold at the retail pump.

Both the excise and the sales tax on fuel have been lifted for the month of September, said Heather Hedrick, the governor’s press secretary.

The tax relief applies only to fuel bought after the moratorium was initiated. A gas station still using gas bought before the relief would pass the tax on to the consumer, Hedrick said. When such a station begins to use tax-relieved fuel, it then will be able to sell the fuel at the cheaper nontaxed price, she said.

Under state law, the governor’s decision must be ratified by the General Assembly, which began meeting in special session Tuesday, Sept. 6. The governor is a Republican, and Republicans likewise control both the state House and Senate, so ratification is expected.

The state moratorium will mean that consumers who were paying $3 per gallon at the pump will temporarily save more than 15 cents per gallon in taxes.