Posted by: Kim_Hamilton on 02/24/2015 08:12 PM
Updated by: Kim_Hamilton on 02/24/2015 08:17 PM
Expires: 01/01/2020 12:00 AM
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BOE Lowers Gasoline Excise Tax Rate 6 Cents
Culver City, CA... Members of the California State Board of Equalization (BOE) today voted to lower the excise tax rate for gasoline by $0.06 for Fiscal Year (FY) 2015-16 during their meeting today in Culver City. “This gas tax cut, although less than originally proposed, is still good news for overtaxed Californians, who currently pay both higher gas prices and higher taxes than residents of other states. But even after this tax cut takes effect July 1, Californians will continue to pay more gas ...
.taxes and fees than residents in nearly every other state. In fact, the Board's cut won't even fully offset the cost of a new ‘hidden gas tax’ that took effect January 1 to help fund high speed rail and other so-called anti-global warming efforts,” said Vice Chair George Runner.
Since 2010, the “fuel tax swap” law has required the Board to adjust this tax rate by March 1st of each year. With today’s action, the excise tax rate on gasoline will be $0.30 per gallon from July 1, 2015 through June 30, 2016. The current excise tax rate of $0.36 is in effect through June 30, 2015.
Drivers pay two types of state taxes on gasoline -- sales tax and a per gallon excise tax. Before the “fuel tax swap” took effect, drivers paid the full sales tax rate (then 8.25 percent), and an excise tax of $0.18 per gallon.
The excise tax on gasoline pays for public road improvements and mass transit. In FY 2013-14, the BOE collected nearly $5.8 billion for the Motor Vehicle Fuel Account, Transportation Tax Fund. The sales tax on gasoline primarily funds local government programs.
The “fuel tax swap” lowers the sales tax rate to 2.25 percent on gasoline and requires the BOE to set the per gallon excise tax rate, so drivers pay the same amount of state taxes on gasoline as they would have paid under the prior tax structure.
In addition to projecting sales tax revenue that would have been generated under the old tax structure, the law also requires the BOE to review the actual excise tax revenue generated in the prior fiscal year and subtract that from projected revenue for the coming fiscal year. This calculation determines the coming fiscal year’s excise tax rate.
Elected in November 2010, Vice Chair George Runner represents the State Board of Equalization's First District. He is a leading advocate for California taxpayers. Runner has worked to improve California’s tax policies and practices and to create and retain more private sector jobs in our state. Prior to his election to the Board, Runner served twelve years in the State Legislature, authoring the well-known California Amber Alert and California's Blue Alert. As a thoughtful conservative, his legislative priorities included improving the economy, business growth, education excellence, and public safety for all Californians. As a member of the Senate Revenue and Taxation Committee, Runner consistently led the fight against tax increases and supported tax relief for families and businesses.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects more than $60 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov.
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