By Staff Reports
(Victor Valley)– With the Fourth of July holiday on its way and summertime road trips on the minds of many California drivers, the California State Board of Equalization (BOE) announced today that starting July 1, 2014, the excise tax rate on gasoline will go down to $0.36 per gallon.
“This is good news for Californians traveling this summer,” said Board of Equalization Member George Runner. “But unfortunately California will still have the second highest gas tax in the nation.”
The new rate of $0.36 – down from $0.395 – was reached after the Board voted unanimously at its February 2014 meeting to lower the rate for the 2014-2015 fiscal year, which ends June 30, 2015.
While Californians will be paying less in state excise tax at the pump starting July 1, that doesn’t necessarily mean it will translate into lower gasoline prices. Other factors, such as world crude oil prices, also affect California’s gasoline prices.
The adjustment of the excise tax on gasoline stems from laws enacted in 2010 known as the “fuel tax swap” (AB x8 6 and SB 70). The swap requires revenue neutrality, meaning motorists pay no more or less state tax on gasoline purchases than they would have paid 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 (see graphic at right for example and watch this video www.boe.ca.gov/taxprograms/excise_gas_tax.htm).
The excise tax rate – set by March 1 of each year for the coming fiscal year – is based on estimates of projected price and gallons to be purchased provided by the Department of Finance and IHS Global Insight, an internationally-recognized firm that provides economic and financial data.
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Elected in November 2010, George Runner represents the State Board of Equalization’s Second 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 $56 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.