Georgia Lifts Suspension of Motor Fuel Tax

Georgia, which was among the first states to suspend the collection of motor fuel taxes in the wake of last year’s oil pricing spike, has phased them out after 10 months, effective Tuesday.

After first suspending in March, Gov. Brian Kemp continued to extend the suspensions on a month-to-month basis; however, he announced in December that last month’s extension would be the last. At the time, he explained that he will be shifting his focus to introducing legislation to provide property tax and state income relief for Georgians.

As of Tuesday, those fueling up in the state will face slightly higher prices at the pump as wholesalers and distributors resume tax collection on diesel and gasoline. As of Wednesday, the diesel tax, which had been 32.3 cents per gallon, will increase by 3 cents. The cost increase does not necessarily indicate immediate changes at the pump due to the gap between when distributors pay for taxed fuel and when the fuel reaches the pump. This means that prices will rise based on the fill-up point.

The increase in diesel and gas taxes is based on an annually adjusted formula which considers the fuel efficiency of vehicles registered in the state of Georgia, as well as the cost of highway construction.

According to an online report from public station WABE, the motor fuel tax suspension is expected to cost the state around $1.7 billion. In an effort to soften this blow, the governor and lawmakers are planning to use some of the state’s budget surplus to backfill accounts and ensure that projects such as road maintenance continue without interruption.

Source: Freightwaves