March 11, 2014 > Gasoline excise tax adjusted downward
Gasoline excise tax adjusted downward
Submitted By Jaime Garza
The California State Board of Equalization (BOE) voted unanimously to adjust the Fiscal Year 2014-15 excise tax rate on gasoline downward by $0.035 during its monthly Board Meeting in Culver City.
State law mandates that the Board set the excise tax rates for gasoline before March 1 of each year. This newly adopted excise tax rate of $0.36 will take effect on July 1 and remain at that rate until June 30, 2015. Motorists currently pay $0.395 in excise tax for each gallon of gasoline they purchase.
Laws enacted in 2010 known as the Òfuel tax swapÓ require revenue neutrality, meaning motorists pay no more or less state tax on gasoline purchases than they would have prior to the swap. The new laws lowered the sales tax on gasoline to 2.25 percent and raised the excise tax by an amount projected to equal the sales tax that otherwise would have been collected under the old tax structure.
Every year, the BOE sets the rate based on the projected price and number of gallons drivers will purchase in the upcoming fiscal year. The upcoming annual rate also accounts for the difference in the actual and estimated sales tax revenue in the prior fiscal year that would have been collected under the prior system.
Price and purchase forecasts are based on projections from the Department of Finance and IHS Global Insight, an internationally recognized firm that provides comprehensive economic and financial data to nations and states.
For more information on other taxes and fees in California, visit www.taxes.ca.gov.