Thanks Erick for my new contributor status!
This is a cross post from my blog at www.steve-davis.org/blog
There are some gas stations in Henry County with $2 gas and below! I actually spoke to Commissioner Graham with the Department of Revenue on Monday and discussed our motor fuel taxes.
We pay gas taxes based on a weighted average sales price of gas minus the states portion of gas taxes. Many Georgians believe we have one of the lowest motor fuel taxes in the country; however the less published portion is that most states do not charge sales tax on gas. Georgia does and in addition to this the local municipalities get their standard portion of upto 3% with any added SPLOST. The states 4% of the tax is divided into two parts with 3% being a second motor fuel tax and 1% going to the General Fund of the state budget(for the bureaucrats to spend as they please).
This tax is applied at the distributor level and is prepaid before the sale to the end users. The calculated weighted average sales price is adjusted every Jan 1 and July 1. Currently the rate that is being used is $2.55 per gallon and remember this is before the states portion of motor fuel tax(17.7 cents) is added to the price and all local sales tax.
The review of the calculated weighted average sales is based from an indexing service and is done every Monday, and this service is a 4 week average! This weeks average is coming in at $2.20 but remember this after the removal of the state and local portion which would mean the average price of gas would be $2.45! The gas prices are dropping so fast that the 4 week average is a little behind the actual current average prices! You can view the daily average at AAA’s Fuel Gauge Report here. This page actually shows the current level at $2.175 which includes all of the taxes!
Over the summer I have been doing research on this type of taxation that is completely misunderstood and somewhat unknown by the public. We need to consider consolidating the typical “motor fuel excise tax